Dutch UBO registration will soon take effect

The date of entry into force of the Registration Implementation Act for stakeholders of companies and other legal entities is foreseen on 27 September 2020 and will be announced by Royal Decree. After the entry into force, existing legal entities have eighteen months to register their UBOs. Newly established legal entities must do so within one week.

A UBO is deemed to exist if a natural person has a direct or indirect ownership or control interest of more than 25 percent in a legal entity. If it is not possible to appoint such a person, the senior management of the entity will be registered as a UBO: the pseudo or quasi-UBO.

With regard to the entry into force of the UBO registration, a letter to the House of Representatives dated 3 July 2020 states: 'In view of the coronary pandemic and careful IT preparation, this register is scheduled to go live on 27 September'.

However, the FIU, the competent authorities and designated gatekeepers such as credit institutions, financial institutions and notaries retain access to your blocked data in the event of blocking.

You can object to a rejection by the Chamber of Commerce and lodge an appeal with the courts. The Chamber of Commerce will immediately block your data upon receipt of your request for blocking and they will remain blocked until there is a final (irrevocable) decision on your request for blocking.

Non-public additional data

Additional UBO data will also be registered, which are not public. These include your date, place, and 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 under investigation whether reporting entities will also have access to the additional data in order to be able to properly perform their Wwft tasks. For the time being, this is not the case.

What does this mean for your company or organisation?

Companies or other legal entities incorporated in the Netherlands must register their UBOs. Think of private companies, (unlisted) public limited companies, foundations, associations with full legal capacity (formal association) and informal associations that run a business, shipping companies, partnerships, vof's, limited partnerships, cooperatives and mutual societies. This obligation to register also applies to charities.

Foreign companies and legal entities operating an enterprise in the Netherlands must register in the trade register, but do not have to register their UBOs in the Netherlands. They may, however, be subject to the obligation to register in other EU/EEA countries. 

This registration must take place at the time of the first registration of the legal entity in the trade register or when an additional statement is required. Existing legal entities will have eighteen months after the introduction of the UBO register to register the UBO data and to deposit the UBO documents. This also applies to legal entities established in the Netherlands that have meanwhile moved abroad. For this purpose, they must re-register in the trade register. After these eighteen months, the normal period of no more than one week will apply, for example for passing on changes to the UBO. 

What does this mean for you as a Know Your Client Entity?

It is not yet clear whether Know Your Client Entities will have access to the additional data as part of their legal duties. This is not the case for the time being and it is still being examined whether privacy regulations allow other possibilities here.

Report back obligation 

As an institution with a duty to report, you have a duty to report back. This means that you must inform the Chamber of Commerce of any discrepancies you discover between the UBO information in your own records and the UBO data in the trade register. This duty to report back starts as soon as the UBO register is operational, but obviously only applies insofar as an entity has already registered UBO data in the trade register.

A separate application will become available for reporting deviations, probably two months after the introduction of the register. 

Possibly temporarily independent UBO-register

The UBO registration will possibly be found in a separate UBO register at the outset. This will be the case if the required technical adjustments to the Trade Register are not yet ready for the intended direct link with the (other part of the) Trade Register when it comes into force. In that case, during a transitional situation, a separate UBO register will be built and filled with UBO data.

The UBO registration in other countries

The European Directive obliges EU and EEA countries to introduce a public UBO registration for companies and other legal entities. The directive prescribes a minimum implementation. Some EU and EEA countries have chosen to introduce a more far-reaching registration. This has prompted PwC, with the help of PwC's European network, to carry out a competition on five specific aspects of registration in 30 EU and EEA countries, in the United Kingdom and Gibraltar. The 2020 PwC publication can be found here.

This PwC publication builds on the December 2019 PwC survey of seventeen EU and EEA countries, which covered more aspects of UBO registration.