Mandatory UBO registration in the Netherlands is fast approaching
4 december 2019 | Door: Joost Blom
You may have already read about it in previous newsletters: as of 1 January 2020, all companies and almost all other organisations based in the Netherlands, and that are registered in the trade register of the Chamber of Commerce, must now register their so-called UBOs in this trade register. UBO stands for Ultimate Beneficial Owner. The law has already been announced for a significant period of time - we have previously reported about it - and is mandatory under European legislation. For many companies, this means that they must take action as of 1 January 2020 to register the UBO.
What is a UBO?
In short, the UBO can be described as the person who has at least 25% of the voting or ownership rights of the company. However, it will often arise that there is no such 'owner'. For example, due to there being several shareholders in a private company (BV), none of which has 25% or more of the shares. Or a foundation where none of the directors has more than 25% of the voting rights. Therefore, for these companies, a so-called pseudo-UBO must be registered. This will be the highest-ranking executive(s) of the organisation, for example, a CEO and/or a CFO or in the case of a foundation, the board.
Within what period of time must the UBO be declared?
In principle, a UBO must be registered from the moment that the company or organisation is registered in the trade register. If there is no UBO at that particular time, but will be at a later stage, it must then be registered as soon as possible. As an organisation you are, after all, always obliged to ensure that all information regarding the company or organisation contained in the trade register is up-to-date. If this is not the case, you are committing a so-called economic offence for which you will be fined. This also applies to the declaration of the UBO.
Of course, current registrations in the trade register do not yet contain registered UBOs. That is why there is a transitional period included in the law for companies and organisations that are already registered in the trade register before 1 January 2020. These companies and organisations will have 18 months as of January 1, 2020, to ensure that their (pseudo) UBOs are registered.
Does this registration only apply to private companies (BVs) and public limited companies (NVs)?
The obligation applies not only to BVs and NVs, but also to general partnerships (VOFs), limited partnerships (CVs), commercial partnerships, associations, foundations and the like. An association that does not have legal personality (where the articles of association have not been enacted at a notary) and that does not run a company (such as a card club) does not have to declare a UBO. There are also a few other special organisations not running a company that do not have to declare a UBO in the trade register, such as religious denominations.
Can you prevent publication?
A UBO can request the Chamber of Commerce not to disclose their data. This will only be possible if there is a risk of matters such as fraud, kidnapping, blackmail and the like. Clearly, the existence of such a scenario will not be swiftly accepted. If the Chamber of Commerce does nevertheless decide that the details must be made public, an objection and subsequent court appeal can be lodged. Similarly, prominent individuals do not have to be registered as UBOs (for example government ministers and secretaries of state, etc.). However, this is a very limited group.
Who checks the registration?
In principle, the organisation itself is responsible for registering the UBOs. If there are changes in the UBOs over time, the organisation itself is also responsible for communicating this change.
However, as an accounting firm, we are obliged to check the data that we have from a client/organisation on the basis of registration with the Chamber of Commerce. If in our opinion, something is not right, we have a duty to report this. This means that we must also always be aware of the UBOs within your organisation, which is already the case under current legislation on money laundering and financing of terrorism (the so-called Wwft).
It is important that you are aware that you must take action yourself. The Chamber of Commerce is itself not likely to request the necessary documents/information, although they will send you notice of when registration can take place. Alfa Accountants and Adviseurs will, of course, be glad to assist you in registering your organisation’s UBOs.