Denmark’s Efforts to Increase Transparency in Beneficial Ownership
In an effort to increase transparency and combat money laundering, Denmark has implemented several measures to disclose beneficial ownership of companies. The country has made significant progress in this regard, with the establishment of a centralized database and stricter regulations for corporate transparency.
Lack of Transparency Before the Implementation of New Measures
According to data from the Danish Business Authority (Erhvervsstyrelsen), there are over 1 million companies registered in Denmark. However, until recently, there was no comprehensive database that revealed the true owners of these companies. This lack of transparency made it challenging for authorities to track suspicious transactions and prevent financial crimes.
New Measures Introduced
To address this issue, Denmark introduced a new law in 2019 requiring all limited liability companies (LLCs) to disclose their beneficial ownership information. The law mandates that LLLCs maintain a public register of their shareholders, which includes details such as names, addresses, and dates of birth.
Centralized Database - CVR
The Danish Business Authority has implemented a centralized database called the “CVR” (Danish Business Register), which provides access to this information. The CVR allows users to search for companies by name, registration number, or other criteria, making it easier for authorities and stakeholders to access beneficial ownership data.
Stricter Regulations
In addition to the CVR, Denmark has also introduced stricter regulations for corporate transparency. For instance, companies are now required to disclose their beneficial ownership information in their annual reports. This increased transparency has helped to improve the flow of information between companies, investors, and other stakeholders.
Positive Results and Future Goals
Experts say that the new measures have already shown positive results. According to Transparency International, Denmark’s efforts have improved its ranking on the Global Anti-Corruption Barometer from 2020 to 2022.
The Danish Business Authority has set a goal of making all beneficial ownership data publicly available by 2025. To achieve this, the authority is working to improve the structure and interoperability of its databases.
Challenges and Benefits
The implementation of the new measures has not been without challenges. Some companies have expressed concerns about the additional administrative burden and potential privacy issues. However, experts argue that the benefits of increased transparency outweigh any potential drawbacks.
Case Studies
In this series, we will explore several case studies that illustrate the impact of Denmark’s efforts to increase transparency in beneficial ownership.
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