Lexence

The UBO register

July 16, 2020 – After some delay, the legislative proposal for the establishment of the UBO register was adopted on 23 June 2020 and this law will take effect on 27 September 2020.By means of this e-mail, we inform you of the consequences that the UBO register will have for you and your organisation.

The ultimate beneficial owners (UBO) of the organisations will be registered in the UBO register in order to establish which natural persons ultimately hold a direct or indirect interest in the organisation. Registering the UBOs is intended to prevent abuse of the financial system for money-laundering and terrorism financing.

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Which obligations arise from the UBO register?

After the UBO register has entered into force on 27 September 2020, existing entities have 18 months to file their UBO data with the Chamber of Commerce (CoC).The CoC will contact the parties that have a registration obligation and request that they register the UBO data. From the time of registration, any UBO changes must also be submitted to the CoC. Failure to comply with the obligations will be deemed an economic offence and is punishable by imprisonment of up to six months (violation) or two years (serious offence), community service or a fine of the fourth category (EUR 21,750).

Registration of the UBO data is a condition for the registration of a new entity with the CoC; therefore, no CoC number will be assigned if the registration obligation has not been met.

There are no costs related to the UBO registration with the CoC. The registration can be done by the persons authorised to sign on behalf of the organisation and can thus be done in the same manner as the other CoC registrations.

To whom does the registration obligation apply?

The following organisations are obliged to register their UBOs:

  • Dutch public limited companies and private limited companies (with the exception of listed companies and 100% (indirect) subsidiaries);
  • foundations, associations (with full legal capacity and without full legal capacity but with a business), mutual insurance associations, co-operatives;
  • partnerships (with the exception of sole proprietorships);
  • European public limited companies, co-operatives and joint ventures; and
  • shipping companies.

Who qualifies as a UBO and what is a pseudo-UBO?

In short, the UBO of an entity is a natural person who (i) has more than 25% of the shares or voting rights, (ii) holds more than 25% of the economic interest or (iii) has effective control. In certain cases there can be a UBO with less than 25%, for example if contractual relationships prescribe the authority of a person to appoint or dismiss the board.

An entity can thus have multiple UBOs, but if it is unable to designate a natural person as UBO, it must designate and register a pseudo-UBO. A pseudo-UBO is often a senior manager; at a legal entity, this is the director under the articles of association and at a limited partnership, this is often the general partner. This means that the data of the pseudo-UBO will be recorded in the UBO register, stating that there is no UBO and that it concerns a pseudo-UBO.

What data is visible and who can access it?

The UBO register is kept by the CoC and is publicly accessible for a fee of EUR 2.50. However, people accessing this data must register themselves, whereby their identity can be established. Only a limited amount of information will then be visible (name, year and month of birth, country of residence, nationality and the nature and extent of the economic interest held by the UBO). However, competent authorities that use the register to investigate suspicious cash flows can access more information than others. UBOs themselves can see how often their information is accessed, but they cannot see who accessed their information.

Can the data be protected?

In exceptional cases, the UBO can submit a request to the CoC for protection of their information, for example because there is a risk of abduction, blackmail and the like, or if the UBO is a minor or legally incompetent. The CoC decides on the request for protection and that decision is open to objection and appeal.

What can Lexence do for you in this context?

Together with you we can establish whether it is necessary for your organisation to register the UBOs and we can provide assistance with the filing of the data with the CoC. As you might have noted, we have been requesting UBO information since the implementation of the Anti-Money Laundering and Anti-Terrorist Financing Act and naturally, we will, as far as possible, process the data already known to us from previous transactions and agreements in these UBO forms. This means that you will only have to check the form for completeness before signing. We can then process this information in the UBO register kept by the CoC.

If you would like a more detailed explanation of the various aspects of the implementation of the UBO register, please let us know and we will send you additional information.