29 June 2021

3% UBO registration threshold proposed for trusts and funds for joint account

Birgit Snijder-Kuipers
Kees Groffen
Constantijn Voogt

An implementing decree on the UBO registration for trusts and funds for joint account (fondsen voor gemene rekening) opened for consultation on 29 June 2021. The consultation period ends on 9 August 2021. This UBO register will be kept by the Chamber of Commerce in the Netherlands.

Trusts with a trustee located in the Netherlands must register their UBOs in this Dutch UBO register. If a trust with a trustee outside the European Union enters into a business relationship (such as the opening of a bank account) or purchases real estate in the Netherlands, the trustee must register the trust and the UBOs of the trust with the Dutch UBO Register. Funds for joint account, and similar arrangements must also enter their UBOs in the Dutch UBO Register. The implementing decree gives more detail about the details of the UBO registration.

What category of trust

The category of trust must be registered in the Dutch UBO register, based on the trust's purpose, such as investment, estate planning, pension, charitable organisation or otherwise.

Who qualifies as a UBO

The UBO definition for a trust and a fund for joint account differs from that for a legal entity. The UBOs of a trust are the incorporators, trustees, protectors, individuals exercising control over the trust, and, as far as relating to economic interest, beneficiaries or groups of beneficiaries. If an incorporator, trustee or protector is a legal entity, the UBOs of that legal entity also qualify as UBOs of the trust.

The fund's manager (beheerder) and legal title holder (juridisch eigenaar) will in any event qualify as UBO. In practice, the manager and the legal title holder of a fund for joint account are legal entities. This will result in the UBOs of those entities qualifying as UBOs of the fund for joint account.

Next to these UBOs, beneficiaries of a trust or participants in a fund for joint account also qualify as UBO. To be a UBO of a legal entity, the UBO must have an interest of more than 25%. Given the implications of the broad UBO definition for trusts and funds for joint account, a threshold of more than 3% applies to these trusts and funds. If there is no natural person who qualifies as a UBO on the basis of economic interest, the beneficiaries will be defined as a group, such as pensioners.

What are the thresholds

The following thresholds are proposed:

  • category a: at least 3% up to and including 25%
  • category b: at least 26% up to and including 50% – we assume what is meant is: more than 25% etc.
  • category c: at least 51% up to and including 75% – we assume what is meant is: more than 50% etc.
  • category d: at least 76% up to and including 100% – we assume what is meant is: more than 75% etc.

Exclusion from general disclosure

The public available personal details of a UBO, being the name, month and year of birth, country of residence and nationality, may be excluded from general disclosure for special reasons. The special reasons are the same as included in the UBO register for legal entities, such as the UBO being a minor.

When registration becomes mandatory

The implementing decree is expected to enter into force later this year together with the Bill on UBO register for trusts and funds for joint account. Trusts and funds for joint account must register their UBOs within three months after implementation of the new UBO register. The implementation date is not yet known, but we will keep you informed.