Obligation to register the “ultimate beneficial owners” (UBO register) as from 2020
Mr C. (Caroline) Hoogendijk | 20 May 2019 | Reading time: approximately 2 minutes
From 2020, almost all legal entities and companies incorporated in the Netherlands are required to register their “ultimate beneficial owners”. This registration takes place in the so-called “UBO register”. “UBO” stands for “ultimate beneficial owner”. In short, this is the natural person who has a particular interest (more than 25%) in, or ultimately controls a legal entity or company. That could be more persons. The purpose of the UBO register is to combat financial and economic crime, such as money laundering and the financing of terrorism. The idea is that it will be easier to combat this if it is clear who the ultimate beneficial owners of a company are. The UBO register becomes part of the commercial register and therefore falls under the management of the Chamber of Commerce. Part of the information about the UBOs becomes public, such as the name and economic interest of the UBO.
On 4 April 2019, the legislative proposal “Implementation Act for the registration of ultimate beneficial owners” (in Dutch: “Implementatiewet registratie uiteindelijk belanghebbenden”) was submitted to the Dutch House of Representatives. This legislative proposal implements a European directive in Dutch legislation, namely a part of the European amended fourth anti-money laundering directive (Directive 2018/843). All EU Member States must have an UBO register starting 2020.
When is someone an UBO?
A person is an “ultimate beneficial owner” (UBO) if that person – in short – is the ultimate owner or has the ultimate control over a legal entity or company. In the case of a B.V., for example, UBOs are natural persons with more than 25% of the shares or the voting rights, or persons who have actual control over the company.
Who is subject to the UBO registration requirement?
Almost all legal entities and companies established in the Netherlands are required to register their UBO or UBOs. The obligation to register will in any case apply to:
- private limited companies (in Dutch: “B.V.’s”);
- (unlisted) public limited companies (in Dutch: “N.V.’s”);
- foundations (in Dutch: “stichtingen”);
- associations (in Dutch: “verenigingen”);
- mutual insurance associations (in Dutch: “onderlinge waarborgmaatschappijen”);
- cooperatives (in Dutch: “coöperaties”);
- shipping companies (in Dutch: “rederijen”); and
- partnerships (in Dutch: “personenvennootschappen”) (partnership (in Dutch: “maatschap”), general partnership (in Dutch: “VOF”), limited partnership (in Dutch: “commanditaire vennootschap”)).
Excluded are, among others, listed companies (in Dutch: “beursgenoteerde vennootschappen”), sole proprietorships (in Dutch: “eenmanszaken”), and associations of owners (in Dutch: “verenigingen van eigenaren”). Foreign companies are also not required to register in the Netherlands.
Purpose of the UBO register
The purpose of this UBO register is to combat financial and economic crime, such as money laundering, corruption, tax evasion, fraud and the financing of terrorism. The idea is that it will be easier to combat this if it is clear who the ultimate beneficial owner or owners of a company is or are. In this way, persons and organisations (such as lawyers and civil-law notaries) are better informed about those with whom they enter or wish to enter into a business relationship.
Chamber of Commerce
The UBO register will be part of the commercial register and will therefore be managed by the Chamber of Commerce. Part of the information about the UBOs will be made public. This concerns the first and last name, the month and year of birth, the nationality, the state of residence, and the nature and extent of the UBO’s economic importance.
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