An overview of the most important issues for companies

Entrepreneurs, please pay attention: have you already registered your UBO’s in the Dutch UBO register? If not, you will need to do so before 27 March 2022. If you haven’t got a clue yet about this register, please find below SPEE advocaten & mediation’s summary of the most important aspects.

1. What is an UBO?

A UBO is the Ultimate Beneficial Owner of a legal entity or a partnership. In short: the person who ultimately owns or controls the company. This is always a natural person. There can be several UBOs within one legal entity/partnership. Also, the UBO may vary from year to year.

2. Why do I need to register a UBO?

The UBO register stems from European legislation, the so-called Fourth and Fifth Anti-Money Laundering Directives.

We are already familiar with the Wwft (the Money Laundering and Terrorist Financing (Prevention) Act) and the Wwft Implementation Decree 2018. The most important aspects of the Wwft for Wwft institutions (for example banks, financial service providers, lawyers and civil-law notaries) are the obligation to identify clients and the obligation to report unusual transactions.

The UBO register is in line with this. After all, the aim of the UBO register is also to prevent money laundering and terrorist financing. In order to achieve this goal, transparency is key. Hence, the aim of the UBO register is to make it difficult for criminals to hide behind complicated corporate structures. The idea is that identifying the persons 'behind' the legal entity has a preventive effect. Therefore, the UBOs must be registered in the register.

3. What exactly is the situation with the UBO register?

There are currently several registers: the regular Commercial Register of the Chamber of Commerce and the UBO register, which is also maintained by the Chamber of Commerce. The plan is to integrate both registers, but this is not yet the case.

In addition to the UBO register, a register for trusts will be established. This will be regulated separately, as there is no obligation for trusts to register in the regular Commercial Register either.

4. Is my legal entity required to register an UBO?

The vast majority of legal entities and partnerships in the Netherlands are required to register a UBO in the UBO register. However, the obligation to register does NOT apply to:

• Sole proprietorship
• Listed companies
• 100% subsidiaries of listed companies. But please note: if the shares in a BV are held by more than one listed company, the subsidiary BV must register a UBO!
• BV in formation (i.o.) or NV in formation (i.o.)
• Associations without full legal capacity (i.e. the articles of association have not been laid down in a notarial deed)
• Associations of owners (VvEs)
• Historical legal persons (courtyards, farmers' markets)
• Legal entities under public law. Please note: BVs that have a legal entity under public law (such as a municipality) as sole shareholder are not themselves exempt from the registration obligation.
• Foreign companies, even if they have a business in the Netherlands. These companies must be entered in the register in their own country.

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Please note that denominations are subject to registration.

5. Who is the UBO in a BV or NV?

The UBO in a BV is NV is the natural person, who directly or indirectly:

• holds more than 25% of the shares OR
• has more than 25% control OR
• has more than 25% ownership (this does not mean share ownership, but right to profits/reserves/liquidation balance) OR
• has control or ownership through other means. This is the residual category.

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When determining the UBO of a BV, one must look carefully to see whether there are - for example - shares without voting rights, shares without profit rights or cumulative preference shares. This can be found in the articles of association. The point is to determine in concrete terms who (in a given year) meets the criteria listed above. If profit rights and control are not equal, pay extra attention to this. In the case of entitlement to profit, the point is what the actual distribution was in a given year.

6. Who is the UBO of a foundation?

Foundations fall under the category of "other legal entities" as referred to in the Wwft Implementation Decree 2018. The UBO at a foundation is the natural person who ultimately:

• has more than 25% voting rights in a resolution to amend the articles of association (insofar as amendment of the articles of association is possible) OR
• receives more than 25% of the foundation's assets. Please note that this is not the percentage of the amount that has actually been distributed in a year, but the percentage of the amount that is distributable, and therefore could be distributed (and that can be higher than the amount that has actually been distributed) OR
• has actual control over the foundation.

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7. Help, I have no UBO. What do I do now?

If no UBO can be designated on the basis of the above criteria (points 5 and 6), a pseudo UBO must always be designated and registered. For legal entities, these are the directors under the articles of association. In partnerships, these are all partners, with the exception of the silent partners of a limited partnership (commanditaire vennootschap).

8. What is being recorded?

The UBO is registered:

• BSN
• Tax identification number
• Name
• Month and year of birth
• State of residence
• Nationality
• Nature and size of economic interest, categorised (>25-50% | >50-75% | >75-100%).

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9. Which data are public?

From a privacy point of view, many questions have been asked about the UBO register. It is good to know that not all data are public. However, the following data are available for public inspection: name, month and year of birth, state of residence, nationality and nature and extent of the economic interest.

10. Which data are not public?

Some of the UBO data are not public. Only competent authorities, such as the Public Prosecutor's Office, may view these data. The non-public data are:

• birthplace
• birthday
• home address
• BSN and TIN
• copy of identity document
• documents proving importance and scope of interest

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11. I am a UBO, can I have my data blocked?

These possibilities are limited, from the point of view of transparency. This can only be requested for information concerning minors, or persons receiving police protection, or persons under guardianship or custody. In that case, it is only possible to see the nature and size of the economic interest of the UBO. The shielded data can still be viewed by Wwft institutions with a financial task and by the competent authorities (for instance the Public Prosecution Service and the Tax Authorities).

It is not possible to search the register by 'person'. Everyone who consults the register is registered and verified. A UBO can also query how often data has been requested, but cannot see who consulted the register.

12. Who should take care of the registration?

In the case of legal entities: each director under the articles of association. For partnerships (VOF, partnership, commanditaire vennootschap): all partners (not including the silent partner in a CV).

13. What do I have to provide?

The Chamber of Commerce provides practical information on UBO registration, see: UBO’s inschrijven, wijzigen en uitschrijven – UBO-register

14. By what date should I arrange registration?

Companies that were already incorporated before 27 September 2020 have until 27 March 2022 to complete the registration in the UBO register. Companies established or to be established after 27 September 2020 have to complete this immediately.

15. What if I do not register a UBO?

For new companies, the following applies: without a statement of the UBO, no certificate of registration in the Trade Register will be issued.

If you do not provide or provide incorrect data to the UBO register, criminal or administrative sanctions may be imposed on the legal entity/personal partnership and/or the UBO! In case of administrative enforcement, an order under penalty clause and/or an administrative fine may be imposed. The maximum fine is €21,750.

Do you have any further questions on this subject or on other corporate law matters? The lawyers of SPEE advocaten & mediation are ready to assist you.