On October 4, 2019, the memorandum in response to the report (nota) on the bill 'Implementation Act on the Registration of Ultimate Interested Parties of Companies and Other Legal Entities' (the UBO-register) was presented to the Lower House. This memorandum fleshes out a number of practical aspects of the future Dutch UBO register.
author: Blokland, Gerard
The UBO register is a register in which certain personal data of the ultimate interested parties (UBOs) of Dutch companies and other legal entities (registration holders) are recorded. The introduction of a UBO register is one of the measures included in the (amended) Fourth EU Anti-Money Laundering Directive.
The implementation of the UBO register must be achieved by January 10, 2020 at the latest. After the implementation law takes effect, those obliged to register will have 18 months to report their UBO information to the Chamber of Commerce (CoC).
Among others, the following companies and legal entities incorporated in the Netherlands are required to disclose UBO information with the Chamber of Commerce:
BVs and NVs;
Foundations, associations, mutual societies and cooperatives; and
Partnerships, general partnerships and limited partnerships.
Foreign legal entities are not required to register UBO information in the Netherlands, even if they have a main or branch office in the Netherlands.
The bill reaffirmed that listed public companies subject to certain disclosure requirements and their wholly owned subsidiaries are not subject to registration for the UBO register. Common account funds will not be included in the regular UBO register, but in the UBO register for trusts to be introduced by separate bill. On June 30, 2019, it was announced that the Dutch UBO register for trusts will (also) be publicly accessible. With this, the Netherlands is opting for a more far-reaching public access than required by the EU anti-money laundering directive.
In an implementation decree (Wwft Implementation Decree 2018), the categories of natural persons that are considered UBOs in any case are indicated for each type of registration party. It is explicitly indicated that this is not an exhaustive enumeration and that with respect to one registration holder, multiple UBOs may exist.
The following briefly describes, for the NV, BV, foundation and limited partnership, which natural persons are considered UBOs under the Executive Order in each case:
For NV and BV: UBOs are the natural persons who directly or indirectly hold more than 25% of the shares, voting rights or ownership interest in the company, or who ultimately own or control the company through other means. If a sufficient ownership interest is held through the intervention of a foundation trust office, the natural person continues to qualify as a UBO.
For foundations: UBOs of a foundation are the natural persons who directly or indirectly hold more than 25% of the ownership interest in the foundation, who can directly or indirectly exercise more than 25% of the votes in decision-making regarding amendments to the foundation's bylaws, or who can actually control the foundation.
For limited partnerships: UBOs are the natural persons who directly or indirectly hold more than 25% of the ownership interest in the partnership, who can directly or indirectly exercise more than 25% of the votes in decision-making with respect to amendment of the agreement underlying the partnership or with respect to the performance of that agreement other than by acts of management to the extent that that agreement requires majority voting, or the ability to exercise effective control over the partnership.
An ownership interest exists if a natural person is entitled to the distribution of the profits or reserves of a legal entity or partnership, or is entitled to the surplus after liquidation.
If no UBO can be identified based on the above criteria, then the senior management of the person subject to registration is considered the UBO. For the BV, the NV and the foundation, this is one or more directors under the articles of association. For the limited partnership, this is one or more general partners. The memorandum confirms that in such a situation, the UBO register will state that the natural person in question has only been reported as UBO in his capacity as 'senior executives'.
Registrars are required to provide information on each UBO. Some of this information is publicly accessible through the trade register. Another part of the information to be supplied is only accessible to competent authorities and the Financial Intelligence Unit. The memorandum notes that it is currently being investigated whether (certain) wwft institutions should also have access to the non-publicly accessible UBO information.
Publicly accessible UBO information
First name and last name;
Month and year of birth;
Nationality;
Residential state;
Nature and extent of the UBO's economic interest (in ranges from more than 25% to 50%, from 50% to 75% and from 75% to 100%).
Non-publicly accessible UBO information
BSN/foreign tax identification number (TIN);
Day of birth;
Country and place of birth;
Residential address;
Copy of valid identity document;
Copy of document(s) substantiating why a person has UBO status and showing the nature and extent of the economic interest held by the UBO.
The public can only view publicly accessible UBO information subject to registration and the payment of a fee. The paper notes that privacy protection of UBOs will be enhanced through two additional measures. First, the identity of those consulting the register will be recorded by the Chamber of Commerce. Second, UBOs will be given insight into how often their information is consulted. Consultations by FIU-the Netherlands and competent authorities are excluded.
UBOs may request the shielding of publicly accessible UBO information if the publication of their data exposes the UBO to a disproportionate risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation. This shielding option is interpreted very restrictively in a pending implementation decision dated May 20, 2019; UBOs are, for now, only eligible for shielding if a UBO is a minor or otherwise incapacitated or if the UBO in question is secured by the Openbaar Ministerie or by the National Coordinator for Counterterrorism and Security. In the event of foreclosure, the UBO register will continue to state the nature and extent of the economic interest of the (foreclosed) UBO.
The memo notes that the registration process will be designed so that it will be possible to indicate immediately upon registration whether a foreclosure ground is invoked, specifically mentioning minority. Requests for foreclosure will always immediately result in the UBO's data being blocked. The foreclosure will be lifted only upon a final rejection of the request after completion of the formal objection and appeal procedures.
The implementation of the UBO register must be achieved by January 10, 2020 at the latest. After the implementation act enters into force, those obliged to register have 18 months to report their UBO information to the Chamber of Commerce. The memorandum indicates that in the first 18 months after the entry into force of the registration duty, the Chamber of Commerce will write to all registration duty holders in phases, requesting the registration of UBOs. For newly established registration duty holders, the declaration of UBO information will take place simultaneously with the registration in the trade register and registration of the UBO is a condition for providing a CoC number
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