Ultimate Beneficial Owners register update

On the 7^th of July 2020, the Dutch government announced that the long awaited UBO register, of which the implementation is mandatory by EU law, will be implemented as per 27 September 2020.

This means that as of that date, all existing companies are obliged to register their ultimate beneficial owners (UBO) in the Dutch UBO register, for which they have eighteen months to do so. Entities incorporated after 27 September 2020 must register their UBO when they first have their registration with the Dutch trade register of the Chamber of Commerce. The main purpose of the UBO register is to combat financial and economic crime, such as money laundering, corruption or tax evasion. The register will be part of the Dutch trade register of the Chamber of Commerce.

What is a UBO?

A UBO is the natural person who ultimately owns or controls a legal entity. For example, in case of a Dutch private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid or B.V.), a UBO is the natural person who (in)directly owns more than 25% of the shares, has more than 25% of the voting rights or de facto controls the company. If there is no such person, a "pseudo-UBO" must be appointed. All managing directors and managing partners will be regarded as pseudo-UBO. The same is fundamentally applicable to other Dutch legal forms, such as foundations, associations or (general or limited) partnerships. For those legal entities a natural person must have an ownership interest of more than 25% or that person must be able to exercise more than 25% of the votes in the event of an amendment to the articles of association or partnership agreement in order to be considered a UBO.

Who is subject to the UBO registration requirement?

In principal, all Dutch legal entities must register their UBOs in the UBO register. The registration requirement also applies to European Societies (SEs), European Cooperative Societies (SCEs) and European economic cooperations. Listed companies, sole proprietorships, legal persons governed by public law and homeowner associations are exempted from this requirement. UBOs of foreign legal entities (also if a foreign entity has its headquarters or a branch in the Netherlands) will not be registered in the Dutch UBO register. Those entities should comply with the regulations applicable in their country of incorporation.

The UBO register and privacy.

The Dutch UBO register is a publically available register. The following details of the UBO will become publically available:

• the name, month and year of birth;
• the country of residence and nationality;
• the percentage of interest in the entity:
  • over 25% up to and including 50%;
  • over 50% up to and including 75%;
  • more than 75%.

There has been a discussion with regard to whether the UBO register would comply with privacy requirements laid down in the General Data Protection Regulation (GDPR), since the personal details of UBOs would be publically available. However, in order to meet the requirements of the GDPR, the Dutch government has made sure that at most a minor part of the personal details of a UBO will be publically available (for a fee). Data such as the day and place of birth, home address and the documents indicating the nature and extent of the economic interest in a company will not be publically available. These data will only be accesible by competent authorities (such as the Dutch tax authorities and the Dutch Public Prosecutor) and the Dutch Financial Intelligence Unit.

In exceptional circumstances, a UBO may request to foreclose access to the public personal details. This is only possible when the UBO is a minor, is under guardianship or administration or has police security.

Should you have any questions in relation to the UBO register and the obligations for your company, please feel free to contact us.

Neville Bhikha, candidate civil-law notary: Neville.Bhikha@fieldfisher.com
Marinus de Waal, partner: Marinus.deWaal@fieldfisher.com