Do you own more than 25 percent of the voting rights or share capital of a company? Do you have control over a company in any other way? Are you perhaps a senior managing officer within a company? Be aware that, from 31 October onward, you might have to register certain data to the General Treasury Administration under a Belgian royal decree of 30 July 2018 creating the Ultimate Beneficial Owner Register (UBO Register).
The creation of the UBO Register stems from two European directives preventing money laundering and terrorism financing and was transposed in the law of 18 September 2017 concerning the prevention of money laundering and terrorist financing. It concerns companies incorporated in Belgium, (international) nonprofit associations and foundations.
This legal alert focuses on the implications of the UBO Register for companies. Another legal alert comments on the implications of the UBO Register for nonprofit associations and foundations.
Who is affected within companies? Who is considered a UBO?
Within the meaning of the law and the royal decree, the following three categories of natural persons will be considered UBOs within Belgian companies:
- The natural person who ultimately, directly or indirectly, owns more than 25 percent of voting rights or more than 25 percent of the shares or share capital of the company. In the event the company is indirectly held through one or more holding companies that hold more than 25 percent of the shares or share capital of the company, the natural person(s) who control(s) the holding company or companies will be regarded as UBO(s).
- The natural person who ultimately exerts control over the company through any other means. This notion of “control by other means” can be assessed on the basis of article 5 of the Belgian Companies Code, for instance, the right to appoint the majority of the board of directors of a company.
- The natural person who holds the position of senior managing officer(s) within the company in so far as no person is identified under categories 1 or 2 or if there is any doubt whether the identified person(s) under categories 1 and 2 are in fact UBOs. The person who holds the position of senior managing officer will generally be the CEO or the chair of the executive committee.
The board of directors must report all the required data regarding its UBOs to the General Treasury Administration (GTA) by 30 November 2018 via the online MyMinfin platform.
What personal data of the UBO must the company’s board of directors report?
The company’s board of directors will provide the GTA with the following information about its UBO:
- Name
- First name
- Day of birth
- Month of birth
- Year of birth
- Nationality or nationalities
- Country of residence
- Complete address of residence
- Date from which point onward he or she became a UBO
- Identification number with the National Register
- The category or categories of UBOs the natural person belongs to individually
- The category or categories of UBOs the natural person belongs to, together with others
- Whether he or she classifies as a direct or indirect UBO
- If he or she classifies as an indirect UBO, the number of intermediaries, and for each of them, their complete identification data (including name, date of incorporation, trade name, legal form, address of the corporate seat and the corporate number)
- The size of the ultimate interest in the company
- In the event of a direct UBO and when the control results from the ownership of shares or voting rights, the percentage of shares or voting rights in the company
- In the event of an indirect UBO and when the control results from the indirect ownership of shares or voting rights in the company, the weighted percentages of shares or voting rights in the company
In some circumstances, UBOs can request the GTA to exempt certain data from registration. In that regard, the UBO will have to provide evidence of extraordinary and exceptional circumstances justifying such a limitation, such as disproportionate risks; risk of fraud, kidnapping, blackmail, extortion, bullying, violence or intimidation; or when the UBO is an infant or a legally incapacitated person.
Access to the UBO Register, with regard to companies
The UBO Register data for companies can be accessed by:
- The competent authorities, including the Belgian tax authorities
- Entities such as the Belgian National Bank, financial institutions, insurance companies, notaries, accountants and lawyers, in the context of the fulfillment of obligations regarding vigilance towards clients
- Any citizen
The above-mentioned entities under (a) and (b) will have unlimited access to all information held in the UBO Register. Unlike them, citizens’ access will be limited to those data listed in items (i), (iv) through (vii), and (xi) through (xiv). Even though citizens will have no access to the actual ultimate interest the UBO holds in a company — item (xv) — citizens will have access to the category or categories of UBO a natural person belongs to — items (xi) and (xii) — and will consequently know for sure that the UBO either (1) has more than 25 percent of voting rights or share capital, or (2) exerts control in another manner, or (3) has a position of senior managing officer.
To the extent that the UBO Register contains information that is otherwise not accessible to the public, the quasi-unconditional access to it by any citizen raises privacy concerns. This is, for instance, the case when the interest of the company’s founder (which is by law filed with the tribunal of commerce at the date of incorporation, and accessible to anyone, and published to some extent in the Appendix to the Belgian State Gazette) changes at a later date without being made public.
Sanctions: personal liability of directors
The Minister of Finance has authority to impose administrative fines on directors of legal entities that do not comply with their reporting obligations. Fines may vary from 250 to 50.000 EUR. A court may also impose a criminal fine ranging between 400 and 40.000 EUR. Besides, the directors or governing bodies remain subject to the ordinary liability regimes in cases of noncompliance with the Belgian Company Code or the law in general for what regards compulsory filings and publications already in force.
For any further question, please contact the following persons:
Hubert André-Dumont, Partner: [email protected]
Timothy Speelman, Partner: [email protected]
Nathalie Locht, Associate:[email protected]
Frederick Geldhof, Associate: [email protected]