In the new transparency register, the beneficial owners are (Ultimate Beneficial Owners - UBO) of companies, foundations and trusts (obligated parties) published. The idea behind this is to name the person who Control over a company or other vehicles.

Who has to publish what?

All companies based in Germany, regardless of their size, sector and other due diligence obligations in the area of money laundering prevention, must carefully examine whether and, if so, what information must be provided and how they can obtain the information on their beneficial owners. The beneficial owners must provide the obliged entities with all necessary information.

The name, date of birth, place of residence and type and scope of the economic interest must be published. The information must be checked regularly and kept up to date.

As the commercial register only lists the direct shareholders, but the term "beneficial owner" is much broader, a check is essential. If the information is already available in the commercial register, nothing further needs to be done.

What does control mean?

Control in its simplest form is a direct or indirect shareholding of more than 25%. Equivalent to this are voting rights in the shareholders' meeting of more than 25% and control in a comparable manner. These comparable circumstances are the exciting ones, as they include economic interdependencies such as trusts, silent partnerships or pooling agreements that were previously only known to the tax authorities. By definition, trusts and foundations have no shareholders. Instead, the decisive factor here is who decides on the management of the assets and who receives distributions.

Who is authorised to view the register?

  • Authorities responsible for combating money laundering
  • Central Office for Financial Transaction Investigations
  • Law enforcement authorities
  • Tax and customs offices
  • Persons with a legitimate interest

The register is not accessible to everyone, but NGOs and investigative journalists dedicated to the fight against money laundering have the necessary legitimate interest. This is likely to cause headaches not only for family offices that are concerned about discretion.

What needs to be done for the first notification?

All obliged entities must submit an electronic report for the first time on 1 October 2017. Companies and all other affected vehicles should use this time to compile the necessary information. This will not be possible without coordination with the shareholders. This initially means an administrative burden.

What sanctions are there? 

Incorrect or incomplete information may constitute an administrative offence. Managing directors or compliance officers in particular put themselves at risk if they do not submit a report or submit a poorly researched report.

Inga Zillmer is a lawyer at TAXGATE, a tax law firm specialising in transactions, investments and tax compliance.