As from September 27, 2020 Dutch companies should mandatory registers their UBO(s) in the Dutch UBO registry held by the Dutch chamber of commerce. Ultimately on March 27, 2022 the registration should be made by companies which were already registered in the Dutch trade registry prior to implementation of the UBO registry.
It seems that quite some companies have not yet register their UBO(s) although the Dutch Economic Enforcement Office (Bureau Economische Handhaving) may impose either criminal or administrative sanctions in case of violation of the UBO registration requirements.
What steps should you take?
First, it should be determined which individuals qualify as UBO of your organization and collect evidence and documentation from which it appears that he or she is the UBO. Subsequently, the UBO(s) should be registered via a website of the Dutch chamber of commerce. In case you face difficulties in determining the UBO and/or making the registration, please reach out to us.
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New bill to improve the men-women ratio in boards
As per January 1, 2022, a new bill to improve the men-women ratio in management boards and supervisory board of listed companies and certain large companies (BVs and NVs) is effective. Basically, two measures have been introduced pursuant to the bill: the ingrowth quota and the target scheme.
A so-called ingrowth quota has become applicable to supervisory boards of listed companies and will result in a more balanced composition of the respective supervisory boards: a supervisory board should consists of at least one third men and at least one third women. Pursuant to the ingrowth quota, an appointment of a new individual as member of a supervisory board will in principle be void if it does not lead to a more balanced composition of the supervisory board. The foregoing also applies to the appointment of non-executive directors of a listed company in case of a one-tier model.
For certain large companies, the bill has introduced an obligation to set appropriate and ambitious objectives in the form of a target scheme. This should result in a more balanced men-women ratio in the management board, supervisory board and key management. Furthermore, such large companies should prepare a plan in order to achieve the targets set forth in the target scheme and report the targets to the Social and Economic Council and in the management report.
The Social and Economic Council has reported earlier that most companies do not yet meet the requirements of a balance composition of their respective boards. In addition, most companies have not yet started with the required preparations. Given the fact that the bill has come into force, it is expected that the board composition will be on the board agenda’s soon.
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On November 23, 2021, the Dutch Senate has approved a legislative proposal for the implementation of the Dutch UBO-register for trusts. The Trust Register is a public register containing information of the ultimate beneficial owners of trusts and similar legal arrangement such as the Dutch mutual funds (FGRs). It is expected that the Trust Register will be implemented later this year. After implementation, trustees will have 3 months to register the UBOs of trusts.
The Trust register is applicable to (i) trusts and (ii) similar legal arrangements. A trust is a legal relationship under which assets have been placed under the control of a trustee, who manages those. The Netherlands has qualified certain funds without legal personality as legal arrangement similar to trusts. The most common example of a fund that falls under the scope of the Trust Register is the Dutch mutual fund (FGR)).
Who should make the registration?
The trustee – of a trust has the obligation to register information in the Trust Register. In case of a Dutch mutual fund, the manager of that fund will generally be the trustee.
Trusts are not subject to the registration requirement in The Netherlands if the trust and its UBOs are registered in a Trust Register of another Member State of the European Union.
Who is an UBO?
An UBO should always be an individual person, unless certain exceptions apply. The following individuals will in any event be considered to be a UBO:
the protector(s), if applicable;
the beneficiaries, or if no individual beneficiaries can be determined, the group of individuals in whose interest the trust in principally established or active; and
any other individual who, through direct or indirect ownership interest or through other means, can ultimately exercise control over the trust.
Violation of the registration obligations as set forth above is considered a Dutch economic offence which can be sanctioned by criminal or administrative sanctions.
Mandatory registration obligation for all Dutch limited partnership (CVs) with the Dutch trade registerhttps://corpvision.nl/wp-content/uploads/2021/12/blog-1920x600-06.jpg1920600CorpvisionCorpvisionhttps://secure.gravatar.com/avatar/5824d768a2df2d982ec9ba45804f9dac?s=96&d=mm&r=g
All relevant Dutch entities have to register their UBOs with the Dutch UBO register prior to March 27, 2022. This requirement also applies to all Dutch limited partnerships (‘commanditaire vennootschappen’ or ‘CVs’).
In the past, there was no requirement to register a CV with the Dutch trade registry if did not perform any business activities in The Netherlands. A lot of CVs with no real nexus to The Netherlands have therefore not been registered with the Dutch trade registry at their formation. However, since the implementation of the Dutch UBO register, it is mandatory (i) to register all CVs – with or without any business activities in The Netherlands – with the Dutch trade registry and (ii) to register their UBOs with the Dutch UBO register. It is expected that there are quite some CVs in existence which have not be registered yet. In order to avoid/mitigate any penalties and other sanctions, it is time to act now and have these CVs and their UBOs registered asap.
For CVs which were already registered with the Dutch trade register prior to the implementation of the UBO register, the deadline of March 27, 2022 applies; i.e. they must register their UBOs with the Dutch UBO register prior to that date.
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