BILL REGARDING UBO-REGISTER SUBMITTED TO THE LOWER HOUSE
On 4 April 2019 a legislative proposal for the "Act on the registration of ultimate beneficial owners of companies and other legal entities" (hereinafter: the "Bill") was submitted to the Lower House of Dutch Parliament. The Bill introduces a public UBO-register in which the ultimate beneficial owners (hereinafter: "UBOs") of companies and other legal entities established in the Netherlands must be registered.
Background and scope of the Bill
The introduction of an UBO-register is part of the implementation of the (amended) fourth European Anti-Money Laundering Directive. Pursuant to the (amended) fourth European Anti-Money Laundering Directive, all EU Member States must have an UBO-register by 10 January 2020.
An ultimate beneficial owner is defined in the Bill as: "the natural person who ultimately owns or controls a company or other legal entity".
The UBO-register must be a tool in the fight against financial and economic crime, such as money laundering, terrorist financing, corruption and fraud.
Pursuant to the Bill, the following entities that are incorporated or established under Dutch law will be required to register their UBOs:
- (unlisted) B.V.’s and N.V.'s;
- partnerships: professional partnerships, general partnerships and limited partnerships;
- foundations, associations, mutual benefit associations and cooperatives;
- European public limited companies;
- European cooperatives;
- European economic interest groupings; and
- shipping companies.
The following entities that are incorporated or established under Dutch law will not be required to submit information on their UBOs pursuant to the Bill:
- (100 percent subsidiaries of) listed companies;
- sole proprietorships;
- legal persons governed by public law;
- associations without full legal capacity that do not run a business;
- associations of owners; and
- some historical legal entities (e.g. guilds).
The Netherlands must also establish an UBO-register for trusts and similar legal structures pursuant to the (amended) fourth European Anti-Money Laundering Directive. Such UBO-register will be implemented through a separate bill and has to be implemented by 10 March 2020.
The UBO-register for companies and other legal entities will be accessible to the public. For a certain fee, anyone can inspect the register.
Only the competent authorities and the Financial Intelligence Unit can search the UBO-register for natural persons. Other institutions and natural persons can only search the name of a company or other legal entity.
Some of the registered UBO-information will become publicly accessible. Pursuant to the current text of the Bill, this concerns the following information:
- first and last name;
- month and year of birth;
- state of residence;
- nationality; and
- the nature and extent of the economic interest held by the UBO (expressed in ranges, such as 25% to 50%).
In exceptional cases, an UBO may request that the public data be protected. This could include situations in which there is a risk of kidnapping, blackmail or violence or if the UBO is under age or legally incompetent. The protection of public data does not apply to the nature and extent of the economic interest held by the UBO. After all, this information cannot be directly traced back to the UBO in question. Financial institutions, civil law notaries, designated competent authorities and the Financial Intelligence Unit will always be able to view the publicly protected UBO data.
Competent authorities and the Financial Intelligence Unit will also have access to additional UBO-information. Pursuant to the Bill, this concerns the following information:
- date, place and country of birth;
- BSN/foreign Tax Identification Number (TIN);
- a copy of the documentation used to verify the identity of the UBO; and
- a copy of the documentation substantiating why a person has the status of an UBO and demonstrating the nature and extent of the economic interest held by the UBO.
The processing of personal data in the UBO-register will take place in accordance with the General Data Protection Regulation.
Chamber of Commerce
The UBO register will be part of the Trade Register of the Dutch Chamber of Commerce. The registration of UBOs in the UBO-register will be free of charge. The entities must provide the necessary information to the Chamber of Commerce themselves. Changes must be notified as soon as possible.
The Bill has yet to be debated by the Lower House and the Upper House. In view of the European implementation period, it is to be expected that UBOs will need to be registered in the UBO-register from January 2020. The UBO-register will be made public via the website of the Chamber of Commerce. From the entry into force of the Bill, the Dutch entities will have 18 months to submit the required UBO-information to the Dutch Chamber of Commerce.