As of 27 September 2020, most Dutch entities will be obliged to register their “Ultimate Beneficial Owners” (“UBOs”), i.e. their ultimate stakeholders, with the trade register of the Chamber of Commerce. New entities will have to register their UBOs upon establishment.
Entities established before 27 September 2020 will have 18 months to comply with the obligation to register. This means that existing entities have until 27 March 2022 to register their UBOs with the trade register.
Registration obligation and procedure
Registration in the UBO-register will take place via the website of the Chamber of Commerce. The obligation to register the UBO lies with the person to whom the entity belongs or with each director/person in charge of the daily management. Entities that are established after 27 September 2020 will be obliged to register their UBOs at the same moment the company is being registered at the trade register.
Amendment
In our blog of 19 October 2019 we mentioned that denominations were exempted from the obligation to register. However, in the adopted law, this exception for denominations has been abolished. The UBOs of a denomination are the natural persons who, upon dissolution of the denomination, are appointed as the legal successors in the statute of the denomination.
Short recapitulation of the new legislation
Who is the UBO?
Who the UBO is, can differ per legal form. In the case of private limited-liability companies (besloten vennootschappen) and public limited-liability companies (naamloze vennoorschappen), the UBO is the natural person who is directly or indirectly economically entitled to more than 25% of the company or the person who exercises effective control. For foundations (stichtingen) and associations (verenigingen), the UBO is the natural person who has an ownership interest of more than 25%, can exercise more than 25% of the votes in the event of an amendment to the articles of association or has the ultimate effective control over the legal entity. For private partnerships (maatschappen), limited partnerships (commanditaire vennootschappen), general partnerships (vennootschappen onder firma) and shipping companies (rederijen), the UBO is the natural person who has an ownership interest of more than 25% or can exercise more than 25% of the votes.
Which entities are obliged to register?
Registration in the UBO register will be mandatory for:
- private limited-liability companies (besloten vennootschappen) and public limited-liability companies (naamloze vennoorschappen), with the exception of listed companies and their 100% direct and indirect subsidiaries;
- European companies (SEs);
- European Economic Interest Groupings (EEIGs);
- European Cooperative Societies (SCEs);
- Cooperatives (coöperaties) and mutual insurance associations (onderlinge waarborgmaatschappijen);
- Associations that operate an enterprise with full and limited legal capacity;
- Foundations;
- Private partnerships (maatschappen);
- Limited partnerships (commanditaire vennootschappen);
- General partnerships (vennootschappen onder firma); and
- Shipping companies (rederijen).
The registration in the UBO-register will not be mandatory for:
- Listed companies and their 100% direct and indirect subsidiaries;
- Sole proprietorships;
- Legal entities governed by public law;
- Association of owners;
- Some historical legal entities; and
- Foreign legal entities with a principal or secondary establishment in the Netherlands.
Publication of the UBO register
The UBO-register will be partly public in the Netherlands. Not all information that will be registered in the UBO-register will be available to the public. The part that will be open to the public will consist of the following information:
- First name and surname;
- Month and year of birth;
- Nationality;
- State of residence; and
- Nature and extent of the economic interest of the UBO.
Authorized authorities and the Financial Intelligence Unit will also have access to all other registered information, being:
- Date, country and place of birth;
- Home address;
- BSN (Citizen Service Number) and TIN (Tax Identification Number);
- Copy of a valid identity document; and
- Copy of documents showing the nature and extent of the economic interest of the UBO.
If an established entity in the Netherlands has been deregistered from the UBO-register, the UBO data will remain accessible for a maximum of ten years after deregistration.
Blocking data
The UBO may submit a request to the Chamber of Commerce for blocking his or her data to be published in the register. After the request, the data will be blocked until the Chamber of Commerce has irrevocably rejected the request and will, of course, remain blocked after the request has been granted. Such a request will be honored if there is a disproportionate risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation for the UBO.
Sanctions
The obligation to register as an UBO is subject to a dual system of sanctions. Infringements can be enforced with both administrative and criminal sanctions. The purpose of this is to implement an effective, proportionate and dissuasive measure. Alignment between the two systems will be sought in a consistent and coherent manner.
Meaning for practice
It is important that all UBOs are registered correctly and on time as of 27 September 2020. For this reason, it is important that entities, shareholders and policymakers are aware of the registration obligation. In order to avoid sanctions, it will be necessary to keep a careful record of who the current UBOs are at all times.
