The Dutch UBO register will be introduced in September 2020
The introduction of the Dutch UBO register has been delayed until a later date in 2020. This will be likely somewhere in late fall 2020. After the entry into force, existing legal entities have eighteen months to register their UBOs. Newly established businesses in the Netherlands must do this within a week.
The relevant legislation to implement the Dutch register for Ultimate Beneficial Owners has been adopted by the Dutch House of Representatives but not yet by the Senate. The Senate of the Netherlands is working on its investigation into the legislation. Part thereof is the advice of the Council of the State, the legislative advisory body of the Dutch government. This advice addresses the relation between the UBO register and privacy on the basis of the GDPR. The legislation that will implement the Dutch UBO register pursuant to the 4th Anti-Money Laundering Directive still needs to be voted on. It is not yet clear when this will happen.
The obligation to introduce a UBO register derives from the Fourth Anti-Money Laundering Directive as amended by the Fifth Anti-Money Laundering Directive. Approximately 1.5 million Dutch legal entities must register information on their UBOs in this register.
After the entry into force, existing legal entities have eighteen months to register their UBOs. Newly established legal entities must do this within a week.
The UBO register will be part of the Trade Register of the Dutch Chamber of Commerce. Certain UBO information will be publicly available. In this short read, we provide answers to several practical questions that our clients may have.
Who is a UBO or a pseudo-UBO?
A UBO is a natural person who ultimately owns or controls the corporate or legal entity. There can be more than one UBO for a single entity. A Governmental Decree (Uitvoeringsbesluit Wwft 2018) defines which individuals must automatically be considered a UBO in various scenarios. In the case of BVs and NVs, for instance, the following applies: UBOs are the natural persons who directly or indirectly hold more than 25% of the shares, voting rights or the ownership interest in the legal entity, or who through other means ultimately own or control the legal entity.
When (i) the UBO cannot be determined under these rules and there are no anti money laundering suspicions, or (ii) there is doubt regarding the identity of the UBO, the senior management will be considered UBOs (this is known as a "pseudo-UBO"). Under Dutch law the natural person(s) who are managing director(s) will be regarded as senior management.
Who is subject to registration?
The following legal entities that are incorporated or established under Dutch law will be required to register their UBOs with the UBO register:
European public companies (SEs);
European economic interest groupings (EESVs);
European cooperative companies (SCEs);
Cooperatives (coöperaties) and mutual insurance associations (onderlinge waarborgmaatschappijen);
Associations (verenigingen) with full legal capacity and associations with limited legal capacity operating a business;
All types of partnerships (v.o.f., C.V., maatschap); and Shipping companies (rederijen).
Mutual funds (fondsen voor gemene rekening) and trusts will also be required to register their UBO information. This will be implemented through a separate legislative proposal.
What information needs to be registered?
The UBO register in the Netherlands will be public. The public will have access to the following information of each UBO:
month and year of birth;
country of residence; and
nature and extent of the beneficial interest held by the UBO (presented in fixed ranges of 25%-50%, 50%-75% or 75%-100%).
Competent authorities and the Financial Intelligence Unit will have access to a larger collection of information:
date, place and country of birth;
BSN (citizen service number) or a foreign TIN (Tax Identification Number);
copy of the documentation according to which the identity of the UBO has been verified; and
copy of documentation that supports why this person is a UBO and what the nature and extent of the
beneficial interest held by the UBO.
Protection of public UBO data
As a UBO, you can submit a request for foreclosure to the Chamber of Commerce as administrator of the UBO register. This is only possible for the first five public data, so not for the nature and extent of the economic interest that you hold as a UBO. There are only two exhaustive grounds for foreclosure
minority (persons up to the age of 18) and legal incapacity (persons who are under administration or are placed under guardianship); and
disproportionate risk, risk of fraud, kidnapping, blackmail and the like. You can only appeal on this second ground if you are on specific police protection lists.
The FIU (Financial Intelligence Unit), the competent authorities and designated gatekeepers, such as credit institutions, financial institutions and civil-law notaries, will retain access to your protected data in case of foreclosure.
You can object to a rejection by the Chamber of Commerce and appeal to the court. Upon receipt of your foreclosure request, the Chamber of Commerce will immediately shield your data and they will remain shielded until there is a final (irrevocable) ruling on your foreclosure request.
Non-public additional information
Additional UBO data of you will also be registered, which are not public. This concerns your day of birth, place of birth, country of birth, home address, BSN or TIN (foreign tax identification number) and a copy of documentation for the verification of your identity as a UBO and the nature and scope of your economic interest.
Only the FIU and the competent authorities have access to this additional information. It is still being investigated whether obliged entities also have access to the additional data in order to properly perform their Wwft tasks. This is not yet the case.
Non-public additional information
The 1.5 million registered entities in the Chamber of Commerce are obliged to deliver UBO information to the Chamber of Commerce. The relevant UBO is obliged to cooperate with this request of information. Not complying with these rules may result in an administrative or criminal sanction for either (or both) the corporate or legal entity, and the UBO.
When does the UBO register enter into force?
After the Act enters into force, entities will have 18 months to submit relevant UBO information to the Dutch Chamber of Commerce.
So far, several of the countries surveyed have already introduced an UBO register: Belgium, Germany, Finland (partly), Gibraltar, Malta, Austria, Portugal, Spain and Sweden. Almost all the countries studied have published a (draft) bill for UBO registration, except Cyprus.
We will make sure to keep you informed about any new developments with regards to the UBO register and related issues.
Please feel free to reach out to Dennis Vermeulen and Yuliya Postma.
YOUR BUSINESS TOOLKIT
FREE ACCESS TO ALL THE THINGS YOU NEED TO KNOW
Our experts have combined their knowledge and strengths to create a tool we call the Business Toolkit.
The Business Toolkit will help you and entrepreneurs from around the globe to truly understand the Dutch market, regulations and laws. And will enable you to take a deep-dive the many business-related topics.
Make sure to check out our handy checklists, explainer video's and extensively written Whitepapers too!