01 Aug Ultimate Beneficial Owner
Companies in the Netherlands must comply to the regulations set by the European union and the Dutch authorities. According to the law Wwft (Wet ter voorkoming van witwassen en financieren van terrorisme), nowadays all kind of organizations in the Netherlands are recommended to establish an UBO-registration. This article aims to inform readers about the UBO-registration to help you as an entrepreneur to understand why you are required to fill in the UBO-statement by the bank or your accountancy firm.
Many (financial-) organizations, such as bank, accountancy firm, law firm, notary, currency exchange office and casino, play the determining role in the investigation of the UBO. These firms are not only required to establish UBO-registration of their clients but are also obliged to notify if they notice any false information about the UBO.
The abbreviation UBO stands for Ultimate Beneficial Owner. The UBO is always a natural person. In short, the ultimate beneficial is who:
- has a direct or indirect interest of 25% or more in the capital of the corporation, or
- may exercise 25% or more of the voting rights at the general meeting.
In principle, if no UBO can be identified according to the guideline described above, the natural person(s) that holds the position of senior managing official would be registered as UBO. This UBO-regulation also applies for businesses that have foreign legal entities but are located in the Netherlands. When trying to define the UBO of a foreign subsidiary situated in the Netherlands, one has to include all parties that hold 25% or more of both direct or indirect interest of the corporation. If the parent company meets these conditions, then the UBO of parent company needs to be defined. At least the following information is required to be included in the UBO-register:
- Name of UBO;
- Date of birth;
- Country of residence; and
- The nature and extent of the beneficial interest the UBO held.
The background of this provision is to prevent individuals with malicious intent, such as money laundering, from hiding behind a company, foun-dation or other legal entities. When requested by organizations such as banks and accountancy firms, companies have the obligation to provide not only correct but also up-to-date information about their UBO. Companies that do not fulfill this obligation would be risking being treated as performing an economic crime.
The goal of this article is to clarify basic knowledge about the UBO regulation within the limited scope of the article. If you need more detailed information or have any questions about this matter, feel free to contact us.