Ultimate Beneficial Owner UBO

The Ultimate Beneficial Owner (UBO) has been placed under the spotlight in countries worldwide. Tax authorities around the world want to ensure that corporate structures are not opaque and that the UBO can always be identified.

The Ultimate Beneficial Owner (UBO) can generally be defined as the person who ultimately owns or controls (whether directly or indirectly) more than 25% of the company’s shares or voting rights or controls the entity through other means. 

The UBO must be identified in any financial transaction. While most international authorities will require the professionals involved to self-identify, there are three main ways to identify the UBO if he/she is unknown:

  1. Identify the natural person(s) who directly or indirectly holds or controls at least 25% of the company, as well as one of the shares, voting rights, or ownership of an entity
  2. 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
  3. After having exhausted all possible means, where no person under point i) and ii) can be 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 identify this individual 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 like 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. 

Regarding 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:

  • Settlor
  • Trustee
  • Protector (if any)
  • Beneficiaries or the class of beneficiaries
  • Any other person who has ultimate control over the entity

Minimum information requirements

At the very least, the following information must be included in the UBO register for the persons mentioned above:

  • Name
  • Month of birth
  • Nationality
  • 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 UBO to be identified through an annual form that is filed at the Commercial Registry. This requirement came about as a result 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 an EU regulated market 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 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 the 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 can help identify the UBO in cross-border transactions.

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