The Netherlands is gearing up for compliance with its new Ultimate Beneficial Owner (UBO) register from 27 September, following the recent adoption of implementation legislation by the Dutch Senate.
Each corporate or other entity incorporated or founded in the Netherlands must obtain and register information on the persons who ultimately own or control them.
All newly established entities must submit for public registration in the trade register = maintained by the Dutch Chamber of Commerce - information to identify their UBOs. Existing entities are granted some leeway and must register their UBOs within 18 months from the effective date of the new legislation. The registration obligation has no retroactive effect.
A UBO is a person who ultimately owns or controls an entity, for example by owning more than 25% of shares, receiving more than 25% of an entity's profit, exercising more than 25% of the votes or effectively controlling an entity or its business. A UBO is always a natural person — never a legal entity. There can be more than one UBO. In some cases, an entity's directors or partners are deemed its UBOs.
Access to the UBO register will require both registration and the payment of a fee, in order to retrieve the name, month and year of birth for beneficial owners, as well as country of residence, nationality, plus the nature and size of the economic interest held. The remaining private information will only be accessible by certain competent authorities and the Dutch Financial Intelligence Unit.
Non-compliance with the regulations can result in a fine of €21,750, plus criminal sanctions for instances of fraud which may ultimately result in imprisonment.
Earlier this year, Dutch lawmakers presented a draft bill introducing a UBO register for trusts and legal arrangements similar to trusts, such as open and closed funds for joint accounts. This register will also be maintained by the Dutch Chamber of Commerce and form part of the Dutch trade register. This bill is expected to enter into force later this year.