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Netherlands Seeks to Upgrade Beneficial Ownership Transparency

The Dutch government has taken a significant step towards strengthening its anti-money laundering and terrorist financing efforts by updating its Register of Ultimate Beneficial Owners (UBO register). The move aims to lower the threshold for identifying beneficial owners, making it easier to track and prevent illicit activities.

Current State of UBO Registration

As of March 1st, approximately 80% of companies and other legal entities in the Netherlands have registered with the UBO register. However, a change is proposed to redefine who qualifies as a UBO, which currently includes natural persons owning more than 25% of shares and voting rights.

Proposed Changes

• The new definition would allow individuals to be considered UBOs even if they hold exactly 25% of ownership or voting rights.
• This change aims to improve transparency and prevent potential money laundering and terrorist financing activities.

Benefits of the UBO Register

The UBO register was established by the Netherlands Chamber of Commerce KVK to oversee the beneficial owners of Dutch organisations. The benefits of this register include:

• Financial institutions must check the UBO register before conducting sales transactions or entering into business agreements.
• Law enforcement can monitor illegal activity such as tax evasion, money laundering, and fraud.
• Access to the UBO register has been expanded to allow anyone with a legitimate interest, including journalists, media professionals, civil society organisations, and competent authorities.

Expanded Access to UBO Information

The new laws confirm that registries will contain not only current information but also data from at least five years ago. This means that companies can request certified extracts from the UBO register, which they may use as proof of their UBO registration for due diligence purposes until access is regained.

Regulatory Compliance and Due Diligence Services

As part of its efforts to enhance beneficial ownership transparency, the Bolder Group offers due diligence services and regulatory compliance solutions to clients across various industries. The company’s experts in 18 major jurisdictions, including the EU, can help businesses navigate complex regulations and avoid severe penalties.

Conclusion

Transparency surrounding beneficial ownership will continue to evolve as the financial landscape changes, with businesses required to disclose and revamp their ownership arrangements to comply with new regulations.