The UBO register will be a mandatory part of the registration of your (company) data with the Commercial Register of the Chamber of Commerce (CoC) as of January 10, 2020. This will also have a major impact on family businesses and DGAs. Research by the RSM-Nyenrode Institute shows that more than 270,000 Dutch owners of family businesses will have to make their data public through the new register because of this law. Of these, almost half are insufficiently familiar with the rules and consequences surrounding this new register. Many other stakeholders will also be affected. As a stakeholder of a legal entity, you may soon be registered in the public register. What is the UBO register and what burdens will you face?
Authors: Gaby Heere & Jan-Berend Möller
The UBO register publishes the ultimate beneficial owners ("UBO") of a company or other legal entity. This refers to the person who effectively "pulls the strings": if you have more than 25% beneficial ownership or ownership interest, or if you have more than 25% control rights over the entity, you must be registered as a UBO in the new register.
If you are a UBO, your name, month and year of birth, nationality, state of residence and the nature and extent of the interest you hold will be recorded in a public register. Additional information from you will also be noted for the purpose of work by authorities such as the Tax Office, DNB and AFM. This information is not public and can only be viewed by these authorities. Additional information may include, for example, your address or your Citizen Service Number.
Virtually all companies or other entities incorporated in the Netherlands must comply with the new registration requirement, such as the BV and unlisted NVs, European companies, cooperatives and mutual associations, as well as associations, foundations and partnerships (think of the limited partnership and the general partnership).
Until now, the establishment of a foundation trust office (a "STAK") has been a construction where the UBO could be anonymized, because a STAK has no shareholder(s) and a UBO therefore did not appear in the Trade Register. Through such a STAK, voting rights on shares and dividend rights can be "unbundled" through "certification of shares. As a certificate holder, you will then not be listed in the Trade Register. Especially for family businesses, this was a valuable construction to ensure anonymity and shield private assets. However, the STAK, like the ANBI, also falls under the registration obligation of the new UBO register, so you can no longer remain anonymous through this construction. Also, the legislator has included the mutual fund under the registration obligation, despite the fact that it is not a legal entity. So for these structures, the UBO register has major implications. The question is whether other structures will continue to exist in which the UBO can remain anonymous for legitimate reasons.
The deadline for registration coincides with the effective date of the bill: By January 10, 2020, if you qualify as a UBO, you must be registered as such with the Chamber of Commerce. If you do not comply with the obligation to register the UBO in the Commercial Register, you and/or your entity may face both a criminal and an administrative law sanction. This means that you can be imposed community service or be fined up to €20,750. You can even be taken into custody for six months. So register your UBOs with the Trade Register as soon as possible to avoid such sanctions.
The legislature has excluded certain natural persons from the disclosure of data in the register in special situations. This exception can be requested if making the UBO's data publicly available exposes the UBO to a disproportionate risk or risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation. In addition, minors and incapacitated UBOs may be exempt from data disclosure. If you qualify, however, your shielded UBO data will always be visible to financial institutions, notaries and competent authorities and financial intelligence. Thus, you will still need to file a UBO registration.
Also, certain Dutch legal entities do not fall under the registration obligation and foreign legal entities with a principal or secondary establishment in the Netherlands do not have to register a UBO. It remains possible to set up certain privacy-oriented structures so that your assets are not disclosed (such as the construction with an STAK or a fund for joint account). However, UBO registration remains mandatory, which means that you as a person do not remain anonymous.
The details of the above exceptions have not yet been fleshed out by the legislature. This makes it all the more difficult for UBOs to assess whether you are eligible to have your UBO data shielded. How this will be applied in practice is therefore still doubtful. What is certain is that, as an interested party, you will be drastically affected by the UBO register.
