From January 2020, companies and legal entities will be required to register their (in)direct owners. Then, if the bill is passed, the UBO register will take effect in the Netherlands. The UBO register is going to have a major impact on the privacy of owners of family businesses. Research by the RSM-Nyenrode Institute shows that the data of over 270,000 Dutch owners of family businesses will become public as a result of this law.
This is in stark contrast to the importance many Dutch people place on their privacy. This is also endorsed by the government in the recently introduced AVG legislation. The survey of the RSM-Nyenrode Family Businesses Research Panel shows that almost half (48%) of owners of larger family businesses are insufficiently familiar with the UBO register. Only 35 % of owners are aware of the consequences of the introduction of the UBO register. The aim of the register is to combat financial-economic crime, such as money laundering and terrorist financing, by creating transparency about a company's beneficial owner.
Of the business owners who do know about the UBO register, as many as 70.8% state that the UBO register is a major invasion of their privacy. Also, 41.7% are concerned about the safety of themselves and their families when the UBO register is actually implemented. Consequently, information to and preparation by owners is still in its infancy.
Laura Bles-Temme, Head of Tax at RSM, explains the outcome of the survey: "The responses show that the implementation of the UBO register is not only seen as undesirable and burdensome. It also potentially creates a whole new market for advisors to assist family business owners to somewhat safeguard their privacy and that of their children when the UBO regulations take effect." The survey shows that family business owners primarily (70%) turn to their accountant for possible advice in this regard.
Roberto Flören, RSM Professor of Family Businesses and Business Transfers and also affiliated with Nyenrode Business University, comments: "Probably not many Dutch people have problems with measures to combat financial-economic crime. However, it becomes a problem when many well-intentioned people have to suffer under this measure. The UBO register will therefore include all owners of Dutch family businesses who own at least 25% of the ownership in their PLC. Not that the initiator of the UBO register directly suspects the owners of family businesses of, for example, terrorist financing, but unfortunately this group also falls under the definition of the UBO. The initiator probably did not realize that this is a very large group of Dutch citizens whose privacy will be affected by this."
View the RSM-Nyenrode Institute white paper on the UBO register and privacy of family businesses here
