Measures included in a law (18 September 2018) reflect requirements to identify the “ultimate beneficial owners” of Belgian companies, foundations, not-for-profit associations, trusts, and other similar legal entities.
The ultimate beneficial owner (UBO) register measures have an effective date of 31 October 2018, and all reporting agents will have to comply with these new formalities within one month of the effective date of this new requirement.
The ultimate beneficial owner is the natural person who ultimately owns or controls an entity. There are several categories of ultimate beneficial owners, based on the type of entity, and the identity of the ultimate beneficial owner of a company is determined under a “cascading system” and can be:
For foundations and not-for-profit associations, not only the founders of a foundation and the natural persons in whose main interest the association or foundation has been set up or operates are considered to be UBOs, but also the directors, all natural persons charged with day-to-day management, or any other natural person exercising ultimate control over the foundation or association by other means.
Trusts and other similar legal entities have comparable qualification standards. More specifically, the settlor, trustee, the protector (if any), the class of persons in whose main interest the legal arrangement or entity is set up or operates and, finally, any other natural person exercising ultimate control over the trust by means of (in)direct ownership or by other means will be considered to be UBOs of a trust.
Directors of companies, not-for-profit associations and foundations and the trustees of trusts must declare the following information with the UBO register:
Information that must be specifically declared by companies includes the category to which the person belongs (i.e., shareholder, manager or a person who exercises similar control, senior management), or a person who separately or together with another person correspond to one of these categories; whether the person is a direct or indirect ultimate beneficial owner and if an indirect ultimate beneficial owner, the amount of intermediaries and, for each of them, their full identity with at least their names, founding date, name of the entity, legal form, the address of the entity’s registered office and the company registration number (or any other similar means of identification issued by the country where the intermediary is registered); and the amount of ultimate economic interests held by the UBO, more specifically the percentage of the shares or voting rights in the company (or the weighted percentage in case of indirect ownership).
This information must be timely updated (i.e., within one month following the moment the information of an ultimate beneficiary owner is known or has changed) and must be reported to the UBO register. Directors or trustees who do not comply with these new regulations may be subject to a penalty, ranging from €250 to €50,000 (to be multiplied by a factor of eight (8)) for each violation.
Unlike not-for-profit associations, foundations, trusts or other similar legal entities, the UBO register of companies is accessible by any person—without requiring a written request and without having to show a legitimate interest. An ultimate beneficial owner can make a request for to keep the information confidential; however, confidentiality can only be granted in exceptional circumstances. In making a claim for confidentiality, the persons must prove that they are being exposed to a disproportionate risk, such as the risk of fraud, kidnapping, extortion or blackmail. Limited access of the UBO data can also be obtained if the beneficiary is a minor or is legally incapacitated.
Companies, not-for-profit associations, foundations, trusts and other legal entities have until 30 November 2018 to gather and upload the required information in to the UBO register. The Belgian administration is expected to provide more guidelines about the practical implementation on its website.
Those persons who will be deemed to be ultimate beneficial owners need to consider certain preparatory measures such as:
Read a September 2018 report prepared by the KPMG member firm in Belgium
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