Same law, different lawyers
14 July 2020

UBO Register bill adopted by Dutch Senate - update

UBO Register bill adopted by Dutch Senate - published on 7 July 2020 and to take effect on three different dates (8 July 2020, 27 September 2020 and a third date yet to be determined)

As the effective date of the Bill (defined below) has now been published, please find below an updated version of the newsletter we sent you on 1 July 2020. 

1.    UBO Register

Pursuant to the Fourth and Fifth Anti-Money Laundering Directive, each EU member state must implement a register in which the details of 'ultimate beneficial owners' ("UBOs") are registered (the "UBO register").

On 23 June 2020 the Dutch senate adopted the bill to implement the UBO register (the "Bill") in the Netherlands. The UBO register will be kept by the Dutch trade register of the Chamber of Commerce (the “Dutch Trade Register”).

On 7 July it was published in the National Gazette (Staatsblad) that the Bill will come into effect in three phases:

a. as of 8 July 2020:

  • i. the entities listed in paragraph 2.1 are under an obligation to collect the UBO information and to keep accurate and up-to-date records of the UBO information. This information does not yet need to be registered with the Dutch Trade Register;
  • ii. foundations are under an additional obligation to keep an internal register with (i) the beneficiaries that have received a distribution of up to 25% of the total distributed amount in a financial year, (ii) the distributed amounts and (iii) the date of the distributions; and
  • iii. non-compliance with i. and ii. above may result in sanctions;

b. as of 27 September 2020 the UBO register will be operational and entities incorporated or established on or after 27 September 2020 are required to register their UBOs simultaneously with their registration with the Dutch Trade Register. Existing entities will need to file the required UBO information with the Dutch Trade Register by 27 March 2022 (within 18 months after 27 September 2020);

c. the provisions of the Bill regarding (i) the identification by the Dutch Trade Register of third parties who have accessed the UBO register and (ii) the UBO's right to know how many times his personal information has been provided to third parties other than the Financial Intelligence Unit (Financiële Inlichtingen Eenheid) and certain other designated authorities, will come into effect on a later date, yet to be determined.

2.    Registration

2.1    Which entities need to register UBOs?

The following entities will need to register their UBOs in the UBO register:

  • a. private companies with limited liability (besloten vennootschappen met beperkte aansprakelijkheid; "BVs") and limited companies (naamloze vennootschappen; "NVs");
  • b. cooperatives (coöperaties) and mutual insurance associations (onderlinge waarborgmaatschappijen);
  • c. associations (verenigingen) with full legal capacity and associations with limited legal capacity operating a business;
  • d. foundations (stichtingen);
  • e. all partnerships (vennootschappen onder firma, maatschappen, commanditaire vennootschappen);
  • f. European limited companies (Societas Europaea; "SEs"), European economic interest groupings (Europese Economische Samenwerkingsverbanden; “EESVs”) and European cooperative companies (Societas Cooperativa Europaea; "SCEs") having their seat in the Netherlands;
  • g. shipping companies (rederijen); and
  • h. churches (kerkgenootschappen).

It is expected that there will be a separate legislative proposal to introduce an UBO register for mutual funds (fondsen voor gemene rekening), trusts and similar constructions.

2.2    Exceptions

Listed entities that are subject to the disclosure requirements laid down in the EU Transparency Directive or equivalent international disclosure requirements and their direct and indirect wholly owned subsidiaries do not have to register their UBOs.

Non-Dutch entities having a branch office in the Netherlands do not have to register their UBO in the Dutch UBO register.

2.3    Which information will be registered?

a.    Public information

The following information of each registered UBO will be publicly available:

  • i. name;
  • ii. month and year of birth;
  • iii. country of residence;
  • iv. nationality; and
  • v. nature and size of the beneficial interest in the relevant entity. The exact size will not be registered, but most likely ranges of 25%-50%, 50%-75% or more than 75% will be recorded.

b.    Non-public information

Certain additional information and documentation regarding UBOs must also be registered, which will only be available to the Financial Intelligence Unit and certain other designated authorities, such as the Dutch Central Bank (DNB), Authority for Financial Markets (AFM), civil law notaries (notarissen), the Public Prosecution Service (OM), the national police and the tax authorities. This information and documentation includes:

  • i. the date, place and country of birth;
  • ii. the residential address;
  • iii. the Dutch citizen service number (burgerservicenummer (BSN)) or the foreign tax identification number;
  • iv. a copy of the documentation further to which the information listed under i., ii. and iii. above and the nationality of the UBO have been verified; and
  • v. a copy of the documentation evidencing the nature and size of the beneficial interest, such as a shareholders register, a depositary receipt holders register, a members register, a notarial deed of transfer or issue of shares or a structure chart.
2.4    Protection of privacy

An UBO can request the Dutch Trade Register to shield certain information from public inspection in case the UBO is a minor or legally incompetent (handelingsonbekwaam) or in case of exceptional circumstances.

The Dutch Trade Register is not in a position to decide whether there are such exceptional circumstances. It will verify whether the UBO is under police protection. If such is the case, the Dutch Trade Register will shield the information of the UBO for a period of five years.

UBOs that expect that the UBO Register will lead to disproportionate risks can inform the police or the Public Prosecution Service, who will assess the circumstances and decide whether the UBO will need police protection.

Information that has been shielded because the UBO is a minor of legally incompetent, will be shielded until the UBO is no longer a minor or no longer legally incompetent.

Shielded information will remain available to the Financial Intelligence Unit and the other designated authorities.

3.    Who are the UBOs?

3.1    UBOs per legal entity

An UBO is generally defined as an individual with ultimate ownership or control over an entity. An entity can have more than one UBO. By decree (the WWFT Implementation Decree) it was determined that in the following individuals qualify as UBOs:

a. BVs, NVs, SEs and SCEs: individuals who ultimately own or control the entity (i) through direct or indirect ownership of more than 25% of the shares, voting rights or ownership interests or (ii) by other means, such as the right to appoint or dismiss the majority of the members of the entity's administrative, management or supervisory body;

b. foundations, associations, cooperatives, mutual insurance associations and EESVs: individuals who ultimately own or control the entity through (i) a direct or indirect ownership interest of more than 25%, (ii) the ability to directly or indirectly exercise more than 25% of the voting rights in relation to an amendment of the entity's articles of association or (iii) the ability to exercise effective control over the entity;

c. partnerships and shipping companies: individuals who ultimately own or control the partnership through (i) a direct or indirect ownership interest of more than 25%, (ii) the ability to directly or indirectly exercise more than 25% of the voting rights in relation to an amendment of the entity's constitutional agreement or (iii) the ability to exercise effective control over the entity.

The above is not an exhaustive list of the criteria used to identify the UBO. An individual can also qualify as an UBO without meeting the abovementioned criteria, e.g. if there is a contractual right to appoint or dismiss managing directors.

3.2    Pseudo UBO

If, after using all possible resources, no UBO can be identified on the basis of the ownership and/or control criteria or if there is any doubt that the identified individuals are in fact the UBOs, the entity must register one or more "pseudo UBOs". In that case the individuals who hold the position of senior managing officials will be deemed to be the UBOs and will be registered as such in the UBO register.

In case of legal entities the pseudo UBOs will be the managing directors and in case of partnerships the pseudo UBOs will be the partners (excluding limited partners).

The obligation to register a pseudo UBO does not apply to the direct and indirect wholly owned subsidiaries of listed entities that are subject to the disclosure requirements laid down in the EU Transparency Directive or equivalent international disclosure requirements (see paragraph 2.2).

4.    Non-compliance

Not complying with the obligations set out above may result in administrative or criminal sanctions for the relevant entity and/or the UBO.

5.    Assistance

If you require help with identifying and registering the UBO's with the Dutch Trade Register or if you would like more information on the Bill, please do not hesitate to contact us: Jan de Snaijer, Leonie Huisman & Chantalle Schoegje.