In this short article, Adam Kiolle provides an update on the introduction of a new register listing the identity of the ultimate beneficial owners (UBOs) of businesses and legal entities registered in the Netherlands.
At present the Dutch commercial register (handelsregister) does not list information on who owns or ultimately controls Dutch legal entities (except for in the case of sole traders (eenmanszaken) and companies (BVs and NVs) with a sole shareholder), however this is soon going to change.
Under new European anti-money laundering and financing of terrorism legislation, EEA Member States now need to implement a so-called UBO register identifying the ultimate beneficial owner of corporate and other legal entities incorporated within their territories. This register will list up-to-date information on the “beneficial ownership” of such entities. In the Netherlands, this UBO register will be integrated into the KvK’s commercial register.
At present it is uncertain when the Dutch UBO register will be up and running, although it is definitely a question of “when” rather than “if”. While the European Member States are free to decide precisely how to implement the register, under the European legislation, they do not have a choice about whether or not to implement it.
Once in place, virtually all businesses registered in the Netherlands will need to provide UBO information for the purposes of registration. The only exceptions (for the moment) will be for foreign companies registered in the Netherlands and (for obvious reasons) sole traders. The register will list details each ultimate beneficial owner’s name, month and year of birth, nationality, country of residence as well as the nature and size of the UBO’s economic interest in the entity. In addition to the foregoing information which will be publicly available, other information will be collected and kept on record in a non-public UBO register which will only be available to certain public authorities (most likely the tax authorities, national police and financial regulatory or investigation bodies).
In principle (and subject only to very limited exceptions) entities will be under an obligation to provide and update the relevant UBO information, with failure to do so attracting serious penalties.
Am I an UBO?
Under the draft Dutch legislation, a UBO is defined as the “natural person who has ultimate ownership of or control over a business or legal person”. Beyond this it is not quite clear exactly how the UBO will be defined. For this, we will have to wait for the passing of a statutory instrument setting out the precise definitions for each type of entity. It is, however, likely that anybody who holds (or controls) more than 25% of the shares in a company will fall under the definition. Where no individual shareholder holds (or controls) more than 25 % of the shares, it is not unthinkable that the law might look to the board of directors and identify one or more of the directors as the UBO, as odd as this may sound. What is certain is that all entities will be deemed to have at least one UBO.
Can I avoid being listed as an UBO?
If you are the UBO of a Dutch business or entity, you may, under some limited circumstances, be able to have your personal information suppressed in the public register. However, to do this, you will need to be able to prove that publication of the details would give rise to an actual risk of fraud, kidnapping, blackmail, violence or intimidation. The other exception is where the UBO is a minor or otherwise lacking legal capacity.
Photo credit: Patrik Göthe
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