Dutch beneficial ownership register to become effective in 2020

The Dutch government has confirmed that a registry of ultimate beneficial owners of companies will enter into force in the Netherlands from 2020.

The register will be introduced as part of the Trade Register of the Chamber of Commerce in January 2020, after which all newly registered companies will have to comply.

However, existing businesses will have a further 18 months to register their UBOs; that is, until mid-2021, four years past the deadline set by the EU Fourth Anti-Money Laundering Directive (4AMLD).

The purpose of the register is to combat financial and economic crime, such as tax evasion, money laundering and terrorist financing, by increasing transparency about who ultimately owns a corporate entity, the Ministry said.

Certain information about company owners held on the register will be accessible by the public. However, the law is said to include privacy safeguards for company owners who feel they may be put at risk of intimidation, violence, and other threats by having their details publicized.

The registration requirement applies to corporate (and other) entities that are incorporated or founded in the Netherlands, regardless of where their business is located. It extends to:

• private companies with limited liability (BV) and public companies (NV), other than those listed on a regulated stock market, or their wholly owned subsidiaries; 
• cooperatives and mutual insurance associations;
• foundations (stichting);
• associations (vereniging) with full legal capacity, and associations with limited legal capacity operating a business; and
• all types of partnerships (VOF, CV, Maatschap);

It also includes shipping companies, European economic interest groupings, European public companies and European cooperative companies.

However, the current legislative proposal does not include trusts or mutual funds. A separate legislative proposal will be introduced to implement their obligation to register ownership under the EU Fifth Anti-Money Laundering Directive (5AMLD).

European Union member states are required to introduce centralized databases of ultimate beneficial owners of companies under European Directive 2015/849 on the prevention of the use of the financial system for money laundering or terrorist financing, otherwise known as the Fourth Anti-Money Laundering Directive.