The major beneficiaries of a Dutch legal entity shall be registered as Ultimate Beneficiary Owners (UBO’s). How does it work an what is the background of this requirement? Read this article to benefit if you have a business in the Netherlands or if you regularly do business with Dutch businesses.
What is the Dutch UBO Register and how does it function?
The UBO Register was released in the Netherlands On September 27, 2020. As per this date it became immediately required to register beneficiaries at incorporation of most kind of legal entities. The requirement to have a UBO register in place derives from the Anti-Money Laundering Directives of the European Union. Every EU member state has to maintain a register with the names of the private individuals that qualify as UBO’s, which is designed to prevent the financial systems from being exploited for money laundering and terrorist financing. This law imposes the obligation on private and public limited liability companies and other organisations, along with foundations, set up in the Netherlands to centrally register the details of their UBO’s with the Chamber of Commerce in Netherlands.
A Decree of the Government specifies which private individuals shall be qualified as a UBO in various situations. In short, a UBO is a natural person who has more than 25 per cent of the shares or voting rights, owns more than 25 per cent of the economic interest, or has effective control over the body. Relevant to mention is that a body can have more than one UBO.
Are there any exemptions allowing to omit the registration of UBO’s?
Exemptions from the UBO register exist for societies of real estate holders (in Dutch: verenigingen van appartements eigenaren), sole-proprietorships (in Dutch: eenmanszaken), and companies with a listing subject to the disclosure regulations specified in the EU Transparency Directive or similar international regulations, and fully owned subsidiaries of aforesaid listed companies.
What to do if a Dutch entity has no UBO?
In case the UBO cannot be determined under general rules, a pseudo-UBO must be designated. Under current Dutch legislation, senior management of the entity will be considered as pseudo-UBO. Managing director(s) of Dutch legal entity will be regarded as senior management. If so, all managing directors seated in the board shall be registered unless there are any members with specific rights.
Which personal details will be registered in the UBO register?
Certain information on the UBO will be publicly available: the UBO’s first and last name, year and month of birth, citizenship, country of residence, the kind and size of the beneficial interest the UBO owns. On the other hand, the UBO’s residential address, complete date of birth, place and country of birth, fiscal identification number (BSN) and identification document number, and any documents showing the ultimate beneficial ownership, will not be available for the public. Solely qualified authorities (such as the public investigators) may consult this information.
After from September 27, 2020, existing the boards of legal bodies will have 1 ½ year to register the UBO or UBO’s with the UBO register. Nevertheless, new entities set up by a formation agent must register their UBO(s) at the initial registration of their entity with the Chamber of Commerce. Not following up these rules could result in a criminal and administrative sanction for as well the legal body as the UBO.
Support with UBO registration in the Netherlands
Corporate services providers will be pleased to assist you with answering any remaining questions about the UBO Register requirements in the Netherlands or the registration of UBO’s with the Dutch Chamber of Commerce.