UBO
Meaning, obligations, and register
UBO transparency is an essential part of effective compliance. It gives organizations better insight into ownership structures and associated risks.
What is a UBO (Ultimate Beneficial Owner)?
A UBO (Ultimate Beneficial Owner) is the ultimate beneficiary of an organization. This is always a natural person who directly or indirectly controls a company. UBOs play a crucial role in compliance because they provide transparency in ownership structures and help prevent fraud, money laundering, and other financial risks.
What does UBO mean?
A person is considered a UBO if he or she:
directly or indirectly more than 25% of the shares or voting rights, or
otherwise factual exercises control about the organization.
UBOs are a mandatory part of KYC and CDD processes, among others. By identifying UBOs, organizations gain insight into who is actually behind a company.
What is a pseudo-UBO?
In some cases, it is not possible to identify a natural person who meets the 25% threshold or exercises actual control. In that case, the senior management is designated as a UBO. This is referred to as a pseudo-UBO. Pseudo-UBOs are only used when:
- no actual UBO can be determined, or
- ownership structures are insufficiently clear.
Why are UBOs important for compliance?
UBO transparency is essential for managing risks. Without insight into UBOs, there is a risk that organizations may unknowingly do business with:
- persons on sanctions lists
- Politically Exposed Persons (PEP’s)
- persons involved in fraud, corruption, or money laundering
That is why identifying and continuously monitoring UBOs is a key part of compliance obligations.
Is registering UBOs mandatory?
UBO obligation in the Netherlands
In the Netherlands, registering UBOs is mandatory, but this depends on the legal form of the organization. Registration takes place at the Chamber of Commerce (KvK).UBO obligation within the EU
Within the European Union, it has been agreed that each EU country must maintain a UBO register. These registers are organized nationally and vary in terms of accessibility and level of detail.International differences
Outside the EU, different rules apply. In many countries, registering UBOs is not mandatory, which means that UBO information is often limited or unavailable.UBO register in the Netherlands
- first and last name
- year of birth
- nationality
- nature and extent of the interest
These legal forms are required to register their UBO(s):
- Private and public limited companies not listed on the stock exchange (and 100% subsidiaries of these companies)
- European Cooperative Societies (SCEs)
- European public limited companies (SEs)
- European Economic Interest Grouping (EEIG) with a seat in the Netherlands
- Societies
- Foundations
- Churches
- Cooperatives
- Partnerships
- General partnerships (vofs)
- Limited partnerships (CVs)
- Shipping companies
The following legal entities are not required to do so.
- Listed companies (NVs and BVs)
- Sole Proprietors
- Legal entities governed by public law
- Associations with limited legal capacity that do not conduct a business
- Association of Owners (VvEs)
- Other private legal entities such as historical legal entities (guilds)
Does every country have a UBO registry?
No, a UBO register is not mandatory worldwide. There is no international UBO register. Within the EU, however, this obligation does exist and all European countries have a UBO register. You can often request this from your local chamber of commerce. There are a number of snags, however. Determining a UBO can be quite difficult internationally once you start doing business outside the EU. Unfortunately, there is no international list of UBOs. Your best chance of success is to find an international partner to assist you with this.
UBO is part of Compliance Management. Read more about this on our Compliance page.
