Corporate

Update on UBO register requirements in Belgium: new Royal Decree fine-tunes obligations

Published on 13th Apr 2021

In Belgium, all Belgian companies, (I)NPOs, foundations, trusts and similar legal entities are under an obligation to register their ultimate beneficial owners (UBOs) in the UBO register which is operated by the Belgian Treasury Administration.

On 11 October 2020, the royal decree of 23 September 2020 (the "Royal Decree") entered into force, which amends the previous royal decree of 30 July 2018. The main changes are:

  • the imposition of additional obligations regarding the information to be included in the UBO register;
  • the ability to request an administrative review when the Treasury Administration has refused a request for an exemption, and
  • the broadening of the access rights to the UBO register.

Additional obligations regarding the information to be included

Previously, indirect UBOs only had to report the weighted percentage of shares or voting rights held in the company. The Royal Decree additionally imposes an obligation on indirect UBOs to report the weighted percentage of shares or voting rights held both in the company and in every intermediary.

Moreover, the Royal Decree stipulates that the category of indirect UBOs which exercise control through 'other means' must specify and register what these other means are. These other means through which an UBO exercises control could, for example, be a shareholders' agreement, veto rights or the right to appoint the members of the board of directors.

The Royal Decree also introduces an obligation to upload in the UBO register any document proving that the information relating to an UBO is adequate, accurate and up to date. These documents are to be uploaded upon registration. Entities subject to the UBO register reporting obligations that registered their UBO(s) before 11 October 2020 were given until 30 April 2021 to upload the relevant documents. On 13 April 2021 the Belgian Federal Public Service (FPS) Finance, responsible for the operation of the UBO register, announced to install a grace period until 31 August 2021 with regard to the aforementioned obligation to upload the additional documents in the UBO register.

Request for administrative review

Under the previous 2018 royal decree, UBOs could request an exemption from the Treasury Administration with regard to the access to all or a part of its information in the UBO register under certain conditions. The Royal Decree now allows UBOs to request an administrative review in response to a refusal to grant an exemption within two months of the receipt of this refusal. It is important to note that this exemption only relates to the accessibility of such information, and not to the obligation to register this information in the UBO register.

Access to the UBO register expanded

The Royal Decree specifies that access will be granted not only to the information currently registered in the UBO register, but also to the historical data, meaning data with regard to previous UBOs.

The Royal Decree also now grants every citizen (with or without a legitimate interest) access to information on the following UBOs of (I)NPOs and foundations:

  1. the members of the board of directors of the (I)NPO or foundation;
  2. the persons in charge of daily management of the (I)NPO or foundation;
  3. the persons authorised to represent the NPO; and
  4. the founders of the foundation.

However, according to the preamble of the Royal Decree, such information would in principle already be publicly available in the Crossroads Bank for Enterprises. In order to obtain access to information other than the information with respect to the aforementioned UBOs of (I)NPOs and foundations, citizens will still be required to demonstrate a legitimate interest. The legitimate interest must relate to efforts to combat fraud, the financing of terrorism or related criminal activities.

Registration of trusts and fiduciaries in the Crossroads Bank for Enterprises

The Royal Decree has introduced an obligation to register trusts, fiduciaries and similar legal structures with the Crossroads Bank for Enterprises prior to their registration in the UBO register. This is due to operational considerations, since the registration in the UBO register is done on the basis of the entity's unique enterprise number. That unique enterprise number is obtained when registering with the Crossroads Bank for Enterprises.

Key takeaway

As mentioned above, companies have until 31 August 2021 to upload their documents as required under the new obligations. In general, the Royal Decree does not introduce ground-breaking changes, but instead is mostly a fine-tuning of the already existing obligations and procedures. The practical burdens of these obligations should be minimal and aim to improve shareholder and public trust as they promote transparency and prevent financial malfeasance. It is important to reiterate that non-compliance with these obligations may result in administrative fines of €250 to €50,000 and even criminal fines of €40 to €40,000.

Should you have any questions, please do not hesitate to get in touch with one of our experts.

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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