The Dutch senate has recently adopted legislation, pursuant to which legal entities (as described below) are obliged to register their so-called UBO (ultimate beneficial owner) in a new UBO register. The purpose of this register is to combat financial and economic crime, such as money laundering. The legislation is expected to enter into force in the third quarter of 2020.
The UBO register is a register that contains certain personal details of ultimate beneficial owners of Dutch legal entities. The UBO is the person who is the ultimate owner or has ultimate control over a legal entity. The UBO registration obligation will apply to:
- B.V.’s and (non-listed) N.V.’s (the listed companies are exempt from registration)
- Foundations, associations, mutual insurance associations (onderlinge waarborgmaatschappijen) and cooperatives
- Partnerships (maatschappen), general partnerships (VOF) and limited partnerships (commanditaire vennootschappen)
- shipping companies (rederijen)
- European public limited companies (SEs)
- European cooperative societies (SCEs)
- European economic partnerships
In the case of a B.V. or N.V., UBOs are considered to be the individuals who directly or indirectly hold more than 25% of the shares, voting rights or ownership interest in the legal entity, or persons who—through other means—ultimately own or control the legal entity. 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 also qualify as a UBO.
The UBO register will be kept by the Trade Registry of the Dutch Chamber of Commerce. Not all information provided to the Trade Registry will be made publicly available. The following information will be publicly available:
- First name and surname
- Birth month and year
- Nature and extent of the UBO’s economic interest
If no UBO can be traced on the basis of shares, voting rights or ownership, a person or persons belonging to the senior management of the relevant legal entity must be listed as UBO(s) (the “Pseudo UBO”). However, the appointment of senior management is an ultimate default option and is only possible after exhausting all possible means to discover the real UBO.
Non-Dutch entities are not required to submit information on their UBOs to the Dutch UBO register, even if they have their principal place of business or a branch office in the Netherlands.
With respect to privacy of the UBOs, the identity of the persons who access the register will be registered by the Chamber of Commerce and it will be visible to UBOs how many times their information has been consulted. Consultations by the competent authorities will be excluded from this information.
In the first 18 months after the registration obligation comes into effect, the Chamber of Commerce will request that all legal entities subject to registration register their UBOs. Failure to comply with the UBO registration can lead to enforcement action such as fines and/or an order subject to a penalty.
This blogpost was contributed by Peter Visser of Ally Law member firm De Metz Advocaten.