The UBO register
It was made known on 7 July 2020 that the UBO register will go live on 27 September 2020. This register is managed by the Chamber of Commerce and expects to provide an overview of the so-called UBOs (Ultimate Beneficial Owners) of legal entities. In this blog the contents of this Act and the consequences of the entering into effect of this Act for companies and individuals are discussed.
The legislative proposal
After a prolonged initial phase with a lot of debate about the contents of the Act, on 7 July 2020 the Implementation Act and the Implementation Decree were published in the Bulletin of Acts and Decrees. Although the Act will only enter into effect on 27 September 2020, a part of the obligations will enter into effect on 8 July 2020. For instance, for legal entities there is now the obligation to collect information regarding their UBOs and to keep this updated and foundations must keep specific payments updated.
The UBO register
The UBO register contains the data of the ultimate beneficial owners behind legal entities. In this manner it becomes transparent who has the ultimate power in a legal entity registered in the commercial register of the Chamber of Commerce, such as private limited companies, public limited companies, foundations and associations. The origin of the UBO register is situated in the Dutch WWFT (Money Laundering and Terrorist Financing (Prevention) Act) and therefore has the objective of combating financial-economic criminality. All EU member states must set up such a register. A part of the data included in the register will be made public.
Who has access to the UBO register?
With regard to the public part of the register anyone will shortly be able to get access for € 2.50 to the following data of the UBO:
- the name;
- the country of birth and year of birth;
- the nationality;
- the country of residence; and
- the nature and extent of the business interest held by the UBO.
Some competent authorities can thereby use the UBO register to conduct investigation of suspicious flows of funds. Further information can be made available to these authorities.
What does this mean for you?
The Chamber of Commerce will send a request to you to proceed with registration. After 27 September 2020 your legal entity will have 18 months to comply with this request. If you are not registered at that time, the Chamber of Commerce will inform the Economic Enforcement Service (Dutch Bureau Economische Handhaving), which will take measures.
After 27 September 2020 there will be the obligation to register a UBO in the register at the foundation of new entities. Without passing on the data of a UBO it will no longer be possible to complete the registration after that time. The failure to, or incorrect, registration of a UBO can result in administrative sanctions or criminal sanctions.
Obligations for Foundations
On 8 July 2020 Section 290 Book 2 of the Civil Code entered into effect for foundations. This Section determines that a foundation must include all ultimate beneficial owners in a register, who receive a payment of 25% or less of the amounts paid in a specific financial year. This is an important obligation, because this is related to Section 10 Book 2 of the Civil Code, which can have serious consequences for directors in liquidation in the event of non-compliance.
Our corporate lawyers will be pleased to advise you regarding the consequences of this Act for your entity and the enterprise affiliated with your entity. You can also make contact regarding questions about the identification, the registration, or changing of the UBOs, as well as about submitting a request to the Chamber of Commerce for blocking UBO information.