UBO Register 25 February 2019

Jan Peeters, Partner

Legal framework

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Directive 2015/849 of 20 May 2015

(“AMLD4”)

Directive 2018/843 of 30 May 2018 (“AMLD5”)

EU

AML Act of 18 September 2017 (“AML Act”)

Royal Decree of 30 July 2018 (“Royal Decree”)

Belgium

What types of entities must make a UBO Register filing?

• Companies incorporated in Belgium (Art. 14/1 Companies Code)

• Foundations and (international) non-profit associations incorporated in Belgium

(Art. 58/11 Non-Profit Association Act)

• Trusts, fiducies or similar legal entities (Art. 4 §2 Royal Decree) if the trustee or

fiducie manager :

• is established, domiciled or resides in Belgium

• has his registered office, main office, place of management in Belgium

• (in case of non-EU trustee or fiducie manager) establishes a business

relationship or acquires real estate in Belgium in the name of the trust

Scope

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(i) Direct or indirect UBO?

Any natural persons who own or control the company through:

• direct ownership of a sufficient percentage of the shares / voting rights /

ownership interest (‘direct UBO”)

• Indirect ownership of a sufficient percentage of shares / voting rights /

ownership interest (“indirect UBO”)

Shareholding / ownership interest > 25% = indication of direct / indirect UBO

Determining the UBO – Company (1)

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(ii) UBO through other means

Any natural persons who own or control the company through “other means”:

“other means” assessed according to criteria in Article 22 of the Accounting

Directive 2013/34/EU)(and considering other things)

E.g. does that person have:

• right to appoint / remove majority members administrative management or

supervisory body

• right to exercise dominant influence over company, pursuant to contract with the

company or provision in its memorandum or articles of association

• control over majority of shareholders’ voting rights pursuant to agreement with

other shareholders

Determining the UBO – Company (2)

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(iii) UBO by default

If all means have been exhausted to check (i) and (ii):

• but no UBO could be determined (and there are no grounds for suspicion)

• a UBO could be determined but there are doubts about his UBO-ship

=> natural persons in senior management of the company (“hoger leidinggevend

personeel” / “dirigeants principales”) regarded as UBO

Senior management: leaders of the company who exercise in practice the most

decisive influence over the management of the company

• e.g. CEO or management committee chair

Quid if all senior managers are legal persons?

Determining the UBO – Company (3)

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Determining the UBO – Non-profit association / foundation

Non-profit association

• (i) members of the BOD

• (ii) other legal representatives

• (iii) persons responsible for daily

management

• (iv) natural persons or – if not yet

determined - the class of persons,

in whose main interest the

association is set up or operates

• (v) any other natural person

exercising ultimate control over the

association by other means

Foundation

• (i) members of the BOD

• (ii) persons responsible for daily

management

• (iii) founders

• (iv) natural persons or – if not yet

determined - the class of persons, in

whose main interest the foundation

is set up or operates

• (v) any other natural person

exercising ultimate control over the

foundation by other means

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Trust = legal relationship created by an act of the settlor (“express trust”) by which

assets are placed under the control of a trustee in order to be administered in the

interests of the beneficiary or for a certain purpose

• (i) settlor(s)

• (ii) trustee(s)

• (iii) protector(s) (if any)

• (iv) beneficiaries or where the individuals benefiting from the legal arrangement

or entity have yet to be determined, the class of persons in whose main interest

the legal arrangement or entity is set up or operates

• (v) any other natural person exercising ultimate control over the trust through

direct or indirect ownership or other means

Determining the UBO – Trusts, fiducies and similar legal entities

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• Quid shares spouse?

• Acquired before 1 September 2018

• Acquired after 1 September 2018 (Act 22 July 2018): “titre” (rights) v. “finance”

(patrimonial and economic value)

• Usufruct

• In principle: usufructuary has voting rights

• But owner retains ownership

• Definition of company UBO: “own or control”

• Certification

• Apply same principles as for usufruct?

Determining the UBO – Some special cases

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Determining the UBO – Case studies (1)

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Bel Co

D

10%

Co X

30%

C

10%

B

80%

A

70%

Indirect UBO: two possible scenarios

- weighted % > 25%

- weighted % < 25% but majority stake in intermediary

Bel Co

X Co

48%

Y Co

52%

A

100%

B

50%

C

25%

D

25%

STAK (certification)

• Can Certificate-holder be UBO ?

• Can UBO STAK ≠ UBO Bel Co?

• Who controls the STAK?

• A, B, C and D each appoint 1 STAK director

• A director has 3 votes (others 1)

• Crucial decisions require ¾ majority

Determining the UBO – Case studies (2)

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A

>25%

B

<25%

C

<25%

D

<25%

STAK

100%

HoldCo

48%

Free Float

52%

BelCo

Determining the UBO – Case studies (3)

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1

2

20.3% full ownership

79.7% bare ownership 79.7% usufruct

Bel Co Comm. VA.

Y Co

X Co

Partnership

Z Co

STAK

Parents

Children

99,9%

99,9%

1,2%

99,9%

13,98%

14,3%

98,8%

Management Co

100%

0,03% Managing director appointed in AoA

Free Float

71,69%

Determining the UBO – Case studies (4)

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XYZ AIV

Foreign GP Sellers

Luxco 1

Be Holdco

Luxco 2

BidCo 1 BidCo 2

Be Target Co

Foreign LP

20%

80%

US Sub Co

Required information for filing (1)

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Company Association

Foundation

Trust

Identity of the UBO

First name and last name Y Y Y

Birth date Y Y Y

Nationality Y Y Y

Country of residence, residential address Y Y Y

National (social security) registration number (or number

of any similar identity document issued by the country of

nationality

Y Y Y

Required information for filing (2)

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Company Association

Foundation

Trust

Nature of the ownership / control

Since when did he or she qualify as UBO Y Y Y

Which category UBO belongs to (see roman numerals) Y Y Y

UBO individually or in coordination with other UBOs Y Y N

Direct or indirect UBO Y N N

If indirect UBO: number, name, incorporation date, legal

form and registered office of intermediaries

Y N N

Fdfdfdf

Important note: documents attesting to the filed information must also be uploaded

into the UBO Register (legal basis?)

e.g. copy of ID or passport, articles of association of the company, share register

Required information for filing (3)

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Company Association

Foundation

Trust

Extent of the ownership / control

If direct UBO: percentage of shares or voting rights in

company

Y N N

If indirect UBO: weighted percentage of shares or voting

rights in company

Y N N

General practicalities

• Register is part of Treasury Administration (Ministry of Finance)

• Application is linked to MyMinFin (“Applications”)

• Login using via e-ID (or digital identity)

• Register links automatically the company to directors based on information in

CBE (KBO/BCE)

• More practical info: financien.belgium.be/nl/ubo-register

• FAQ (NL / FR)

• User manual for legal representatives (NL / FR)

• User manual for proxies (NL / FR)

How to file the information (1)

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Responsibility

• Directors of the company (Art. 14/1 Companies Code)

• Directors of the non-profit association / foundation (Art. 58/11 Non-profit

associations Act)

• Trustees or fiducie managers

Proxy

• Mutatis mutandis proxy VAT filing

• Internal proxy (e.g. employees) / external proxy (e.g. accountant, lawyer, tax

advisor)

• More practical info: financien.belgium.be/nl.E-services/mandaten

How to file the information (2)

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Data protection

Required information = personal data (GDPR applies)

Company must inform UBO about:

• company’s obligation to communicate information to the UBO Register

• the fact that information is registered and stored in the UBO Register

• the name and address of department managing the UBO Register

• possible access to the UBO Register and all info therein by Competent

Authorities, financial and credit institutions (and other Obliged Entities) and, to a

certain extent, any Belgian citizen

• the UBO’s right to be informed about the data that are registered under his/her

name in the UBO Register and to have incorrect data rectified or deleted

How to file the information (3)

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UBO can consult the information contained in the UBO Register

UBO can submit a request to the Administration to have any inaccurate

information registered under his or her name rectified and/or deleted

Continuing obligations

• If the filed information changes, the directors must update the register

accordingly within one month as from the changes

• Each year the directors will have to confirm the accuracy of the data

• The directors must rectify and delete inaccurate information if requested by the

Treasury Administration or the UBO

How to file the information (4)

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Access to the register – Competent authorities (1)

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• Tax authorities

• Supervisory authorities (e.g. CTIF / CFI)

• (other) public authorities tasked with seizure / confiscation criminal assets and/or AML / CFT

WHO

• General a priori application mentioning natural persons responsible

• No fee

TERMS OF ACCESS

• No restrictions possible RESTRICTIONS

• Tax authorities

• Purpose UBO Register: In principle AML CFT objectives under AML Act

• Tax authorities can also consult the register:

• In any specific matter regarding a specific taxpayer (no fishing

expeditions) IF the information is indispensable for levying the correct

taxes (Article 322 §1 WIB 92)

• Tax authorities can also share the information with their counterparts from

another EU member state (Article 338 §24/1 WIB 92)

• European platform to exchange information in the pipeline

Access to the register – Competent authorities (2)

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Access to the register – Obliged entities

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• All persons and institutions subjected to the AML Act (e.g. credit institutions, payment institutions, notaries) (Article 5 §1 AML Act)

WHO

• General a priori application mentioning natural persons responsible

• Payment of an administrative fee (amount TBD)

TERMS OF ACCESS

• In principle access to all information

• But access can be restricted for certain Obliged Entities if requested by UBO (see infra)

RESTRICTIONS

Access to the register – Citizens (1)

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• Anyone with internet access and a Belgian E-ID WHO

• Payment of an administrative fee (amount TBD)

• Legitimate AML CFT interest (written application)

• NOT required for UBOs of companies! (infra)

TERMS OF ACCESS

• No access to complete date of birth, first name, national number and residential address

• Access can be further restricted if requested by UBO (infra)

RESTRICTIONS

UBO of companies

• No proof of legitimate (AML CFT) interest required

• Only searches based on company name or number (Article 9 Royal Decree)

• but possible to link natural person to company via search in other

available databases (e.g. annexes Belgian Official Journal)

• change of company name useful?

- old name sticks around…. Belgian Official Journal

Access to the register – Citizens (2)

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• To all or part of the UBO information

• Via an application by the UBO to the Treasury Administration

• The request will be granted if:

• the UBO can demonstrate that the access to the information would expose

him or her to a disproportionate risk of fraud, kidnapping, blackmail,

extortion, harassment, violence or intimidation

• the UBO is a minor or (otherwise) legally incapacitated

• The access will be restricted as from the submission of the request

• But all Competent Authorities and some Obliged Entities retain access to all

information

Access to the register – Requested restrictions

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Deadline

• Initial deadlines: 31 December 2018 - 31 March 2019

• New deadline: 30 September 2019 (postponed by Minister)

Sanctions

• Directors

• Director’s liability under corporate law

• Criminal law: fines of EUR 50 to EUR 5 000 (x 8)

• Administrative: fines of EUR 250 to EUR 50 000

• Quid uncooperative UBO?

Deadline and sanctions

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St ibbe .com

Thank you

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