The Ultimate Beneficial Owner UBO has become increasingly important all around the world. Tax authorities worldwide want to ensure that there is no opacity in corporate structures and the UBO is always known.
The Ultimate Beneficial Owner UBO could be defined broadly as the natural person who ultimately owns or controls, directly or indirectly, more than 25% of the shares or voting rights, or controls the entity through other means.
The UBO must be identified in any financial transaction and most international authorities will require the professionals involved to do so. The three main steps to do so could be summarise as follows:
I. Identify the natural person(s) who directly or indirectly holds or controls a sufficient percentage, namely 25 percent plus one, of the shares, voting rights, or ownership in an entity
II. Where no natural person can be identified under any of the scenarios under (i), identify any person who controls the legal entity via other means
III. After having exhausted all possible means, where no person under point i) and ii) is identified, or if there is any doubt that the person(s) identified is/are the beneficial owner(s), identify any person who holds the position of senior managing official (SMO).
Failing to do so, creates a legal liability on the other parties involved in a transaction, including their professionals.
The UBO Register
The UBO register established under the 4th Anti-Money Laundering Directive (AMLD 4) of the EU is a country-specific central register that lists beneficial owners of companies, trusts, foundations, and other legal arrangements similar to trusts.
When we are talking about corporate entities, the beneficial owner is defined as the natural person who ultimately owns or controls, directly or indirectly, more than 25% of the shares or voting rights, or controls the entity through other means.
With regard to trusts and other legal arrangements similar to trusts, the trustees must file in the UBO register the information referred to below of the following persons:
- Protector (if any)
- Beneficiaries or the class of beneficiaries
- Any other person who has ultimate control over the entity
Minimum information requirements
At least the following information must be included in the UBO register for the persons mentioned above:
- Month of birth
- Country of residence
- Nature and size of the beneficial interest held by the beneficial owners
Some countries require additional information to be reported.
The UBO Register in Spain
Since 2018, Spain requires the identification of the UBO through a form for filing annual accounts at the Commercial Registry. This comes as a consequence of the EU Directive 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing.
All companies with a registered address in Spain that file accounts before the Commercial Registry should identify the UBO, except for (i) those companies listed on a regulated market of the European Union or equivalent third countries or (ii) their majority owned subsidiaries as long as they are subject to providing information that ensures the adequate transparency of its beneficial owner.
This form needs to be filed when the annual accounts are submitted, for existing companies this was due upon its first submission following 21 March 2018 and for newly created companies, with the submission of their first annual accounts. Following the first presentation, this form only needs to be completed if there have been any changes to the UBO. Individuals who hold, directly or indirectly, more than 25% of the share capital, qualify as UBO.
The register contains the name, identification number, date of birth, nationality, state of residence and the nature and extent of the interest (exact percentage) of the UBO held. This information is only available to a limited number of entities upon request, subject to their legitimate interest.
Del Canto chambers is able to assist clients advising on compliance and identifying UBO in cross border transactions
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