Martin Aquilina, International Business Lawyer
Marcela Souki, Student-at-Law
The Ultimate Beneficial Owner Register (the “UBO Register”) is a mandatory registration system in the European Union (the “EU”) directed to all individuals who have formal or effective control over an European corporation, company, association, trust, foundation or non-profit organization. This is a initiative brought by EU Directive 2015/84 in an effort to prevent money laundering and terrorism financing. Accordingly, all entities and corporations incorporated under the laws of Member States have to abide by the UBO register rules. All Member States were expected to incorporate the UBO Register system in their legislations by 2017.
Although UBO Register rules apply to all EU Member States, this article will focus on the UBO Register for Belgian entities. In Belgium, UBO registration is in effect as of October 31, 2018. Therefore, as of yesterday, all Belgian legal entities must identify their ultimate beneficial owners.
Under the UBO Register rules, a natural person who owns, directly or indirectly, 25% of voting rights, shares or capital of a Belgian company has registration obligations. As well, an individual who controls the company by any other means will be deemed a UBO. If none of the persons previously mentioned can be identified, the members of senior management will be subject to UBO Registration rules.
The UBO Register will require directors of all Belgian entities to provide information such as surname name and first name of the ultimate beneficial owner; date, month and year of birth; nationality, country of residence; full address; and date on which the person became an ultimate beneficial owner. The information in question will be transmitted electronically.
For corporate entities, details on the nature and extent of the beneficial interest must be present in the registration, such as the amount of shares owned and voting rights held in the company. The category to which the individual belongs must also be disclosed (shareholder, manager, and others who exercise control). The UBO must also inform if he/she is a direct or indirect UBO; if the control is exercised indirectly, all intermediaries must be fully identified.
For trusts and fiduciaries, any person exercising effective control over the trust (trustees and fiduciaries, settlors, beneficiaries, protectors, if any, and others with control) must be registered. For foundations and non-profit organizations must disclose and register information not only in regards to their founders and beneficiaries, but also about their directors, individuals in charge of daily management, individual appointed as representatives or any other person who exercises control.
As previously mentioned, directors of Belgian legal entities are responsible for collecting and transmitting information to the UBO Register. Failure to comply with UBO registration obligations will lead to the imposition of administrative fines ranging from EUR 200 to EUR 50,000. The deadline for registration of entities was initially set for no later than December 01, 2018. However, the registration deadline has been extended to March 31, 2019.
The information in the UBO Register will be accessible by the competent authorities, financial institutions – such as investment and life insurance companies, banks – and entities interested in investigating of money laundering, terrorism financing, tax crimes, corruption, etc. Limited information will also be available to citizens.
If your company has interest in opening subsidiaries in Belgium or elsewhere in Europe, HazloLaw’s International law professionals can assist you.
This article is for informational purposes only and does not constitute legal advice. If you wish to discuss your issue with a lawyer, contact Martin today. 613-747-2459 ext.308, [email protected]