On 4 April 2019, a legislative proposal to implement the Dutch Ultimate Beneficial Owner (''UBO'') register (''UBO register'') was submitted to the Dutch parliament. The obligation to introduce a UBO register derives from the Fourth Anti-Money Laundering Directive as amended by the Fifth Anti-Money Laundering Directive. Approximately 1.5 million Dutch legal entities must register information on their UBOs in this register.
The UBO register will be part of the Trade Register of the Dutch Chamber of Commerce. Certain UBO information will be publicly available. In this short read, we provide answers to several practical questions that our clients may have.
Who is a UBO or a pseudo-UBO?
A UBO is a natural person who ultimately owns or controls the corporate or legal entity. There can be more than one UBO for a single entity. A Governmental Decree (Uitvoeringsbesluit Wwft 2018) defines which individuals must automatically be considered a UBO in various scenarios. In the case of BVs and NVs, for instance, the following applies: UBOs are the natural persons who directly or indirectly hold more than 25% of the shares, voting rights or the ownership interest in the legal entity, or who through other means ultimately own or control the legal entity.
When (i) the UBO cannot be determined under these rules and there are no anti money laundering suspicions, or (ii) there is doubt regarding the identity of the UBO, the senior management will be considered UBOs (this is known as a "pseudo-UBO"). Under Dutch law the natural person(s) who are managing director(s) will be regarded as senior management.
Who is subject to registration?
The following legal entities that are incorporated or established under Dutch law will be required to register their UBOs with the UBO register.
- Private companies with limited liability (BVs) and public companies (NVs), other than those listed on a regulated market or 100% subsidiaries of such entities;
- European public companies (SEs);
- European economic interest groupings (EESVs);
- European cooperative companies (SCEs);
- Cooperatives (coöperaties) and mutual insurance associations (onderlinge waarborgmaatschappijen);
- Associations (verenigingen) with full legal capacity and associations with limited legal capacity operating a business;
- Foundations (stichtingen);
- All types of partnerships (v.o.f., C.V., maatschap); and
- Shipping companies (rederijen).
Mutual funds (fondsen voor gemene rekening) and trusts will also be required to register their UBO information. This will be implemented through a separate legislative proposal.
What information needs to be registered?
The UBO register in the Netherlands will be public. The public will have access to the following information of each UBO:
- month and year of birth;
- country of residence; and
- nature and extent of the beneficial interest held by the UBO (presented in fixed ranges of 25%-50%, 50%-75% or 75%-100%).
Competent authorities and the Financial Intelligence Unit will have access to a larger collection of information:
- date, place and country of birth;
- full address;
- BSN (citizen service number) or a foreign TIN (Tax Identification Number);
- copy of the documentation according to which the identity of the UBO has been verified; and
- copy of documentation that supports why this person is a UBO and what the nature and extent of the beneficial interest held by the UBO.
What happens if the UBO information is not provided?
The 1.5 million registered entities in the Chamber of Commerce are obliged to deliver UBO information to the Chamber of Commerce. The relevant UBO is obliged to cooperate with this request of information. Not complying with these rules may result in an administrative or criminal sanction for either (or both) the corporate or legal entity, and the UBO.
When does the UBO register enter into force?
The UBO register has to be implemented by 10 January 2020. After the Act enters into force, entities will have 18 months to submit relevant UBO information to the Dutch Chamber of Commerce.
What is the status of the central shareholder register?
In addition to the UBO register, the Netherlands has been preparing a central register for shareholders (''CSR'') for some time. The CSR should be distinguished from the UBO register. The CSR will include information on shares and shareholders (and pledgees and usufructuaries (vruchtgebruikers)) of private companies and non-listed public limited companies, as well as European companies and cooperatives with a registered office in the Netherlands. The information will be provided by civil law notaries. It is yet unclear when this regulation on the CSR will enter into force.