In context

Individual bearer shares in Dutch NVs to be abolished

March 14, 2019
In context

The Dutch Parliament recently adopted legislation allowing holders of bearer shares in NV companies to be identified. The expected date of entry is 1 July 2019, at the latest. Under the new law, bearer shares can only be issued by way of a global certificate held by the central institute or an intermediary. Dutch NVs will have to convert issued bearer shares into registered shares before 1 January 2020 if the bearer shares are not yet included in a global certificate. Where the articles of association do not provide for conversion, companies must amend the articles by 31 December 2019. As of 1 January 2020, this conversion takes place by operation of law. The new law implements recommendations made by the Global Forum on Transparency and Exchange of Information for Tax Purposes and by the Financial Action Task Force aimed at preventing tax avoidance and combatting money laundering and the financing of terrorism. The new provisions create transparency about ownership of bearer shares.

Shareholders have until 2 January 2026 to acquire a “replacement share” for their bearer certificate. If companies do not amend their articles of association before 31 December 2019, they must do so at their next planned amendment. For a period of seven years after the new law takes effect, companies must include a statement in their management report about the new law and its impact on holders of bearer shares.

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