On 4 April, 2019, the “Act on the registration of ultimate beneficial owners of corporate entities and other legal entities” (the UBO-register) was submitted to the Dutch parliament. The UBO-register is a register that contains certain personal details of ultimate beneficial owners (UBO’s) of Dutch corporate entities and other legal entities (entities). The implementation of a UBO-register is one of the measures that are included in the (amended) fourth EU Anti-Money Laundering Directive.
The UBO-register has to be implemented by 10 January 2020. After the Act enters into force, entities have 18 months to submit relevant UBO-information to the Dutch Chamber of Commerce.
Who is subject to registration?
The following entities that are incorporated or established under Dutch law, are required to submit UBO-information to the Chamber of Commerce.
- Private limited companies (BV’s) and public limited companies (NV’s);
- Foundations (stichtingen), associations (verenigingen), mutual insurance associations (onderlinge waarborgmaatschappijen) and cooperatives (coöperaties); and
- Partnerships (maatschappen, vennootschappen onder firma and commanditaire vennootschappen).
Listed companies that are subject to certain disclosure requirements and their 100% subsidiaries are not required to submit UBO-information.
Non-Dutch entities are not required to submit information on their UBO's, even if they have their principal place of business or a branch office in the Netherlands. Mutual funds will not be included in the UBO-register, but will be required to register UBO-information in a UBO-register for trusts and similar legal structures. This UBO-register for trusts will be implemented through a separate legislative proposal and has to be implemented by 10 March 2020. The UBO-register for trusts will not be publicly accessible, but will only be accessible to persons who can demonstrate a ‘legitimate interest’.
Under the Act, Dutch partnerships that are currently not registered with the Chamber of Commerce because their business enterprise is not or no longer located in the Netherlands, have to re-register with the Chamber of Commerce and will consequently be required to submit UBO-information.
Who is UBO?
A separate Decree (the Dutch Anti Money Laundering and Terrorism Financing Decree 2018) defines which individuals must in any event be considered a UBO. It is emphasized that the enumeration is not exhaustive and that legal entities may have more than one UBO.
Below, we will set out which individuals must in any event be considered a UBO under the Decree for BV's and NV's, foundations and limited partnerships:
- In case of BV’s and NV’s: UBO’s are the individuals who directly or indirectly hold more than 25% of the shares, voting rights or the ownership interest in the company, or who through other means ultimately own or control the company. If an individual holds a sufficient ownership interest in a corporate entity through depository receipts issued by a Dutch foundation (stichting administratiekantoor), the individual will still qualify as UBO.
- In case of foundations: UBO’s of a foundation are the individuals who directly or indirectly have an ownership interest of more than 25%, who can exercise more than 25% of the voting rights in respect of changes of the articles of the foundation, or who can exercise effective control over the foundation.
- In case of limited partnerships: UBO’s are the individuals who directly or indirectly have more than 25% ownership interest in the partnership, who directly or indirectly can exercise more than 25% of the voting rights regarding changes of the limited partnership agreement or regarding the execution of that agreement other than through acts of management to the extent that decision making by majority vote is required in that agreement, or who can exercise effective control over the limited partnership.
In the aforementioned cases, an ownership interest exists if an individual is entitled to distributions of profits or reserves of an entity or partnership, or is entitled to the balance in case of liquidation. If there is any doubt as to which individuals are UBO’s of an entity, the individual(s) that hold the position of senior managing official(s) will be considered the UBO(s). In the case of a BV, NV and foundation the statutory board members are the senior managing officials. In the case of a limited partnership, the general partners are the senior managing officials.
What UBO-information will be registered?
Entities are required to submit information on all UBO's. Part of this information will be publicly accessible in the Dutch Trade Register. Another part of the information is only accessible to certain competent authorities and the Financial Intelligence Unit.
Publicly accessible UBO-information
- Surname and last name;
- Month and year of birth;
- Country of residence;
- Nature and size of the beneficial interest held (presented in fixed ranges of 25%-50%, 50%-75% or 75%-100%).
Not publicly accessible UBO-information
- Citizen Service Number (Burgerservicenummer, ‘BSN’) / foreign tax identification number (TIN);
- Date of birth;
- Country and place of birth;
- Copy of passport / ID;
- Documentation supporting (i) the conclusion that the individual qualifies as UBO and (ii) the nature and size of the beneficial interest held.
Can access to UBO-information be restricted?
Upon request, access to UBO-information can be restricted to the public if the UBO is a minor or otherwise legally incapable, or if the publication of UBO-information would expose him to disproportionate risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation.
Requests to restrict access to UBO-information are assessed on a case-by-case basis. At a later stage, regulations will be published that describe how the exposure to the aforementioned risks should be demonstrated. The UBO-information will not be published as long as a decision on the request to restrict access is not irrevocable.
When does the UBO-register enter into force?
The UBO-register has to be implemented before 10 January 2020. After the Act enters into force, entities have 18 months to submit relevant UBO-information to the Chamber of Commerce. The Chamber of Commerce has reserved a period of 2.5 years to process all UBO-information. Newly incorporated entities will need to register their UBO-information simultaneously with their registration with the Chamber of Commerce.