On 6 April 2018 the Dutch Minister of Finance sent the draft Implementation Decree regarding the Money Laundering and Terrorist Financing (Prevention) Act (Uitvoeringsbesluit Wwft 2018) (the "Decree") to the Senate and the House of Representatives. In the Decree, amongst other things, the definition of ultimate beneficial owner ("UBO") has been clarified.
The definition of UBO in the Decree is also relevant in view of the implementation of the UBO register, on which topic further legislation and information regarding timing shall follow later this year.
Who needs to be registered in the UBO-register?
In general, individuals that are the ultimate owner of or have control over a legal entity are to be considered as UBO. The following categories of individuals are designated as UBO of a legal entity depending on its legal form.
In case of private companies with limited liability (BV's), public limited companies (NV's), European public limited companies and European cooperative companies, it concerns the individuals that directly or indirectly (e.g. via a trust foundation (stichting administratiekantoor)) hold more than a 25% interest through shares, voting rights or ownership interests.
Listed companies and their wholly owned subsidiaries are exempt from designating an UBO.
If a pledge or usufruct is created on a share, the pledgee or usufructuary may – after transfer of the voting rights to such pledgee or usufructuary – also qualify as UBO.
In case of foundations, associations with full legal capacity, mutual insurance associations and cooperatives, it concerns the individuals that:
- directly or indirectly, hold more than a 25% interest in these entities; or
- directly or indirectly, are able to exercise more than 25% of the voting rights regarding the amendment of the articles of association of these entities.
In case of partnerships, shipping companies and European Economic Interest Groupings, it concerns the individuals that:
- directly or indirectly, hold more than a 25% interest in the entity; or
- directly or indirectly, are able to exercise more than 25% of the voting rights regarding the amendment of the partnership agreement or regarding the implementation of such agreement other than through acts of management, insofar as decision-making by majority vote is prescribed in such agreement.
If none of the individuals referred to above can be designated as UBO or if there is any doubt if an indivual as referred to above should be designated as UBO, the individuals belonging to the senior management of the relevant entity, are to be identified as UBO. In this respect senior management means the management board or, in the case of a partnership, the partners, with the exception of a limited partner.
Please note that the above is not an exhaustive list of the possible UBO's; e.g. an individual may also be considered as UBO in case such individual has actual control over an entity or has control via other means. Also an entity can have one or more UBO's.
If you would like to receive more information about this subject, please contact your contact person with CMS or Gieneke van Nierop, +31 20 3016 455, [email protected].