The register of ultimate beneficial owners in the Netherlands will be introduced in January 2020. A legislative proposal to this effect was submitted to Dutch Parliament on 4 April 2019. Each corporate or other entity incorporated or founded in the Netherlands must obtain and register information on the persons who ultimately own or control them. In the Netherlands, these persons are commonly referred to as UBOs (ultimate beneficial owners). The beneficial ownership register is based on European rules aiming to prevent money laundering and terrorist financing. The register will be part of the Trade Register of the Chamber of Commerce. Some of the beneficial ownership information will be publicly available. Once the register is in place, businesses will have 18 months to register their UBOs – so until mid-2021.
Which businesses are affected?
The following corporate and other entities will be required to register their UBOs with the UBO register:
- Private companies with limited liability (BV) and public companies (NV), other than those listed on a regulated market or 100% subsidiaries of a listed entity
- Cooperatives (coöperatie) and mutual insurance associations (onderlinge waarborgmaatschappij)
- Foundations (stichting)
- Associations (vereniging) with full legal capacity and associations with limited legal capacity operating a business
- All types of partnerships (v.o.f., C.V., maatschap)
- Shipping companies (rederij)
- European economic interest groupings (EESV)
- European public companies (SE)
- European cooperative companies (SCE)
The registration requirement applies to corporate and other entities that are incorporated or founded in the Netherlands, regardless of where their business is located.
Mutual funds and trusts will also be required to register their UBO information. This will be implemented through a separate legislative proposal.
Who is a UBO?
The UBO is the natural person who ultimately owns or controls a corporate or other entity. There can be more than one UBO. Some examples of who is regarded as a UBO are:
- A person owning more than 25% of the shares in a private company with limited liability, directly or indirectly
- A person holding more than 25% of the ownership interest of a partnership, directly or indirectly
- A person capable of exercising more than 25% of the votes in a decision to amend the articles of association of a foundation, directly or indirectly
- A person effectively controlling a business
If nobody qualifies as a UBO based on the ownership or control requirement, the company must then designate a senior managing official as a UBO.
What UBO information will be accessible?
The following details of a UBO will be publicly available in the UBO register:
- First and last name
- Month and year of birth
- Country of residence
- Nature and extent of the UBO's economic interest
Furthermore, the Dutch Financial Intelligence Unit and the competent authorities will have access to the following additional information:
- Day, place and country of birth
- Residential address
- Citizen service number or foreign tax identification number
- Copy of passport
- Documents that prove the nature and extent of the UBO's economic interest
How is a UBO's privacy safeguarded?
The UBO register meets the requirements imposed by the EU General Data Protection Regulation (GDPR). Most parties that consult the register will only be allowed access to a limited amount of the available information. In exceptional circumstances, a UBO may request that access to the public information be restricted. This is only possible if publication of this information exposes the UBO to a disproportionate risk of, for example, violence, blackmail, extortion or kidnapping.
Who is charged with providing UBO information?
Each corporate or other entity must obtain information on its UBO and register it with the UBO register. This obligation lies with each managing director (or similar official) or the person to whom the business belongs. The company must keep the UBO register up to date and register any changes that take place.
The relevant UBO must provide the required information to the entity of which it is the ultimate beneficial owner.
Organizations bound by statutory KYC obligations
Organizations that are required by law to obtain UBO information for KYC purposes, such as law firms and banks, must notify the UBO register of any inconsistencies found between the UBO information that they received from their client and the information in the register.
What happens if the UBO information is not provided?
Not meeting the requirements of this new law may be sanctioned with an administrative or criminal penalty.
From January 2020, newly incorporated corporate and other entities will have to provide the required information on their UBO upon registering with the Trade Register. Already existing corporate and other entities will have until mid-2021.