At the beginning, the practical approach was chaotic. This was reflected, for instance, in the use of different terms referring to the indirect UBO or the direct UBO. In the new FAQs, only the term indirect or direct is used, which can be either individual or grouped.
For the individual UBO, the same definition is used as before, i.e. ‘a natural person who fulfils the conditions of the definition of ultimate beneficial owner in an autonomous way.’
On the other hand, the FAQs clarify that the following must also be considered as grouped UBOs in companies:
- The natural persons who work together based on an agreement, either formal or tacit, oral or written, aimed at gaining control of the company concerned. E.g. shareholders with a preferential right who, at the time the preferential right is exercised, act as a grouped UBO.
- The natural persons who have entered into an agreement regarding the exercise of their voting rights to ensure that decisions concerning policy orientation cannot be taken without the consent of all parties.
The FAQs now also include examples relating to situations between spouses married under the legal regime or under the regime of separation of property, or attempts are made to create more clarity when ownership rights are divided (usufruct – bare ownership).
This does not mean that the new FAQs consist of 25 pages full of clear answers. However, in this newsletter we will limit ourselves to the questions to which there is now a clear answer.
- Cascade system for companies
The law provides for three cases in which one is regarded as the UBO. The first two do not exclude each other and have priority over the third case: only if the natural person does not (1) have a direct or indirect interest of more than 25% of the votes or the capital in a company, and does not (2) have a say via other means (possibly together with other natural persons) about the company that is under the obligation to provide information, can (3) the higher management be designated as UBO.
The FAQs also state that the higher management can also be registered in case there is ‘any doubt on whether the identified person or persons is or are the UBO‘. However, in these cases the company that is under the obligation to provide information will have to demonstrate that it has taken sufficient steps to obtain the necessary information and the company will have to use the ‘Remarks’ field in the UBO register to state the reasons for designating the third category.
- Horizontal property chain
The FAQs now clearly state that horizontal property chains (when a natural person exercises control over various companies which jointly hold an interest of more than 25% in the company that is under the obligation to provide information) also qualify as UBO. Examples are provided in the FAQs.
- Supporting documents
In practice, there was already some confusion and discussion relating to the uploading of supporting documents. However, there was no legal basis for this. This is adequately answered in the FAQs by stating that this is ‘only’ a possibility to justify the identification of the UBO and not an obligation.
- Foreign UBO cannot disclose information
When a Belgian company that is under the obligation to provide information is a subsidiary of a foreign legal entity which, based on the legislation in its country, is not allowed or unable to disclose the requested information according to the national legislation, this refusal can be mentioned in the ‘Remarks’ field and the Belgian company that is under the obligation to provide information shall keep this decision as proof at its registered office.
- Listed companies and their subsidiaries also subject to UBO registration
Despite the previous lack of clarity on the applicability of the Act of 18 September 2017 on listed companies, the FAQs clarify that listed companies must also identify and register their UBO before 30 September 2019.
- Mandate for a company with a foreign legal representative
Here, the FAQs themselves propose the following possibilities:
- The foreign legal representative applies for electronic identification for foreigners;
- A person with a Belgian electronic ID is appointed as the legal representative;
- An employee of a larger organisation is appointed as main access manager via e-Gov Role Management;
- Paper power of attorney (this will probably become the standard option).