The law of 18 September 2017 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing and limitations to the use of cash implements the Fourth European money laundering Directive 2015/849 into Belgian law. This law provides for the creation of a centralized register in which Belgian companies must register and update information about their ultimate beneficial owners, i.e. the UBO register.
The functioning of the UBO register was further elaborated by the Royal Decree of 30 July 2018, which was published in the Belgian Official Gazette on 14 August 2018.
1. Which legal entities have the obligation to register?
The obligation to register and update information about the ultimate beneficiaries in the UBO register is imposed on:
- Belgian companies;
- Belgian (international) non-profit associations and foundations; and
- Belgian trusts and legal entities which are comparable to trusts.
2. Who is considered as ultimate beneficial owner?
The following persons are considered as ultimate beneficial owners of companies, (international) non-profit associations and foundations:
(a) Companies
The ultimate beneficial owners can belong to the following categories:
1° The natural persons who have direct or indirect ownership of a sufficient percentage of voting rights or ownership interest in that entity. A direct or indirect interest of 25% of the voting rights or of the shares is an indication of a sufficient percentage.
2° The natural persons who control the company by any other means (e.g. shareholders’ agreement, veto-right, the power to appoint members of the management board, etc.).
3° If, after exhausting all possible means, no person can be identified under 1° or 2°, the natural persons belonging to the senior management (e.g. directors) must be registered as the ultimate beneficial owners.
(b) (International) non-profit associations and foundations
The ultimate beneficial owners of (international) non-profit associations and foundations are the natural persons:
1° who are member of the board of directors;
2° who are appointed as entitled representatives;
3° who are in charge of the daily management;
4° who are the founders of the foundation;
5° in whose main interest the (international) non-profit association or foundation was set up or operates (or, when these persons are not yet determined, the category of natural persons);
6° who by other means have ultimate control over the (international) non-profit association or foundation.
3. Which information must be provided?
The following information about the ultimate beneficial owners of companies and (international) non-profit associations and foundations must be provided:
(a) the surname and first name(s);
(b) the date of birth;
(c) the nationality;
(d) the identification number in the National Register of Natural Persons or in the Crossroads Bank for Social Security, or the registration number in a similar foreign register;
(e) the full resident address;
(f) the date on which he or she has become the ultimate beneficial owner;
(g) the category (mentioned in point 2 above) to which the ultimate beneficial owner belongs;
(h) whether the ultimate beneficial owner meets the conditions of one of these categories alone or together with others.
In addition, the following information about the ultimate beneficial owner(s) of a company must be provided:
(i) whether it concerns a direct or indirect beneficial owner;
If it concerns an indirect beneficial owner, the identity of each intermediary must be registered, with at least the following information:
- the name;
- the date of incorporation;
- the trade name;
- the legal form;
- the address of the registered office;
- the enterprise number or any other similar identifier issued by the State in which this intermediary is registered.
(j) the extent of the ultimate interest, i.e. the percentage of the shares or voting rights. In the case of an indirect beneficial owner, the weighted percentage of shares or voting rights must be registered.
The ultimate beneficial owners must be informed that this information has been provided to the UBO register and can be consulted by third parties.
4. Term
The Royal Decree will enter into force on 31 October 2018. The administrative body has then one (1) month to transfer all the information about the ultimate beneficial owners to the UBO register, which must therefore happen no later than 30 November 2018. In addition, the administrative body must update this information within one month after having been informed of a change in the information regarding the ultimate beneficial owners. This information must be transferred electronically, via the platform of the Federal Public Service (FPS) Finance. This is not yet operational.
5. Sanctions
If the governing body fails to provide or update the information about the ultimate beneficial owner on time, the entities subject to registration (and if applicable the members of the administrative body or managers) may be exposed to administrative fines. In addition, also criminal fines may be imposed on directors of companies.
6. How to be prepared?
To prepare for the UBO registration, we advise you to now take the following steps:
(a) identify the ultimate beneficial owner(s) and the category (mentioned in point 2 above) to which they belong;
(b) request the identification data of the ultimate beneficial owner(s);
(c) request the identification data of all intermediaries, if applicable; and
(d) request evidence of all the information to be registered.
