Belgium's new rules on ultimate beneficial owners coming into effect as of 31 October 2018

Who are Ultimate Beneficial Owners?

This depends on the type of legal entity that is concerned.

The ultimate beneficial owners of companies are:

1. The natural person(s) who has/have direct or indirect ownership of a sufficient percentage of the shares or voting rights. When a person holds more than 25 % of the shares or voting rights of the company, this is considered to be an indication of direct ownership (or indirect ownership when more than 25 % of the shares or voting rights are held via an intermediate company/various intermediate companies under the control of such natural person(s));
2. The natural person(s) who control(s) the company by any other means (such as having the power, based on a shareholders' agreement, to appoint a majority of the directors or having the power to exercise a dominant influence over the company);
3. The natural person(s) who hold(s) the position of senior managing officer(s) (most likely the CEO), if none of the persons under point 1 and 2 are identified or if it is uncertain whether the identified person(s) is/are the beneficial owner(s), after having exhausted all other means of identification, and provided there are no grounds for suspicion.

The ultimate beneficial owners of (I)NPOs and foundations are:

1. Directors;
2. Persons entitled to represent the (I)NPO (not applicable for foundations);
3. Persons in charge of the daily management of the (I)NPO or the foundation;
4. The founders of the foundation (not applicable for (I)NPOs);
5. The natural persons or, when those persons have yet to be determined, the class of persons in whose main interest the (I)NPO and foundation is set up or operates; and
6. Any other natural person exercising ultimate control over the (I)NPO or the foundation by any other means.

The ultimate beneficial owners of trusts and similar legal entities are:

1. The settlor;
2. The trustee(s);
3. The protector;
4. The beneficiaries, or where the individuals benefiting from the trust have yet need to be determined, the class of persons in whose main interest the trust is set up or operates; and
5. Any other natural person exercising ultimate control (by means of direct or indirect ownership or by other means) over the trust.

What information needs to be provided to the UBO register?

The information on the UBO that needs to be registered in the UBO register is fairly extensive and includes:

• name and surname;
• date of birth (day/month/year);
• nationality;
• country of residence and complete address of residence;
• date at which they became an UBO of the organisation;
• national registry number, social security number, or similar identifier issued by the country in which they reside or of which they are a citizen; and
• detailed information about any intermediary through which an indirect UBO holds its participation in the relevant Belgian entity.

Belgian entities must also provide certain information to their UBOs, including:

• The fact that the above-mentioned information was provided to the UBO register;
• Details regarding the Treasury Administration operating the UBO register;
• The accessibility of the UBO register; and
• The right of the UBO to know which information is included in the UBO register and to rectify this information.

Who will have access to the UBO register?

General

Uploading information to the UBO register will need to be done via the MyMinFin platform operated by the Belgian Federal Public Service (FPS) Finance, which requires a Belgian e-ID card. At the time of writing, this register is not yet online.

Belgian companies and other reporting entities will not be informed about any searches for their UBOs in the UBO register. The UBOs themselves, however, will receive a notification from Treasury Administration that they have been registered in the UBO register.

Companies

The UBO register of companies will in principle be accessible to: (i) competent authorities (including the Belgian Financial Intelligence Processing Unit (CTIF-CFI), as well as tax and oversight authorities); (ii) entities subject to the anti-money laundering (AML) rules (such as financial institutions, insurance companies, brokers, and lawyers); and (iii) ordinary persons and organisations.

Any person may search the UBO register using the company number from the Crossroads Bank for Enterprises or the company name. Ordinary persons do not need to prove any legitimate interest in order to consult the information on a company's UBO(s).

(I)NPOs, foundations, trusts and similar legal entities

The accessibility of the UBO register of (I)NPOs, foundations, trusts and similar legal entities is more restricted than for companies. Their information in the UBO register will only be accessible to: (i) competent authorities; (ii) entities subject to the anti-money laundering rules; (iii) any person or organisation able to prove a legitimate interest; and (iv) any other person that submits a request for an (I)NPOs, foundation, trust or similar legal entity that has control over a company, (I)NPO or foundation.

Contrary to the case for companies, persons or organisations wanting to obtain access to information with regard to (I)NPOs and foundations must submit a request to the Treasury Administration justifying the legitimate interest. The legitimate interest must relate to efforts to combat fraud, financing of terrorism or related criminal activities.

From a tax perspective

In principle, these new AML requirements do not have any specific tax consequences. However, the UBO register will be an additional source of information for the tax authorities, and will simplify the application of existing tax provisions (such as taxation of some internal capital gains on shares, or taxation of gains in case of transfer – or successive transfers – of a significant participation in a Belgian company held by individuals to any non-EU legal entity).

How to prepare

You can already prepare for the new UBO requirements by taking the following measures:

• Spread awareness throughout your organisation regarding these new AML requirements and the UBO register;
• Identify the UBO(s) of your organisation;
• Collect detailed information on the UBO(s);
• Collect supporting documents establishing that the information you have is adequate, accurate and up-to-date;
• Determine which representative (having a Belgian e-ID card) will register the required information via the online platform MyMinFin on behalf of your organisation; and
• Establish efficient procedures within your organisation so that all relevant information is transmitted to the UBO register within a period of one month.

The directors are legally responsible for updating the required information within a period of one month from the date that this information is known or modified. Belgian entities should verify (and, if necessary, update) the information set out in the UBO register at least annually.

Failure to comply with the new rules could result in criminal fines of €400 to €40,000 and in administrative fines ranging between €250 and €50,000.

Don't hesitate to get in touch should you need any assistance or should you wish to receive further updates regarding the new UBO requirements.