New Register for Ultimate Beneficial Owners (UBO Register)
The UBO Register Act (WiEReG), announced on 15 September 2017, imposes a registration obligation on Austrian corporate entities and other legal entities regarding their ultimate beneficial owners. As of 15 January 2018, all direct or indirect owners holding more than 25 % of the share capital have to be disclosed in the new register maintained by the governmental institution Statistics Austria. The data already disclosed in the Austrian Companies’ Register will be transferred automatically to the UBO Register.
Für eine deutsche Übersetzung verweisen wir auf unseren Tax Newsletter vom 23. August 2017.
UBO Register provides more transparency
The UBO Register Act (Wirtschaftliche Eigentümer Registergesetz, WiEReG) introduces a new register, into which specific personal data has to be entered from 2018 onwards. Generally speaking, the purpose of the register is to make the owners behind business companies and asset holding entities visible and verifiable, thus to contribute to the prevention of money laundering and terrorist financing. The WiEReG serves to implement the 4th EU Anti-Money Laundering Directive and becomes effective as of 15 January 2018.
The UBO Register will be maintained by the Federal Institute Statistics Austria (Bundesanstalt Statistik Österreich). The recorded data will be compared automatically with the Central Register of Residence Registrations (Zentrales Melderegister, ZMR), the Companies’ Register (Firmenbuch) and the Central Register of Associations (Vereinsregister).
Who has to register?
In general, the registration obligation applies to all companies and legal entities with registered offices in Austria as well as to trusts or trust-like structures managed from within Austria. The management boards of the relevant entities will have to register their beneficial owners to Statistics Austria by 1 June 2018. For newly established legal entities (i.e., those established after 2 May), a registration period of 4 weeks applies, beginning with their entry in the Companies’ Register or (regarding trusts) with the establishment of an administration in Austria. Data already disclosed in the “core register” (i.e. the Companies’ Register) is basically exempt from the registration obligation. The legal entities (i.e., the management boards) are not only obliged to identify and verify their beneficial owners, but also have to review such data annually.
What has to be registered?
Subject to registration are the beneficial owners, i.e. all natural persons that ultimately own or control a legal entity.
In the first place, beneficial ownership is indicated with respect to natural person(s) who directly hold an interest of more than 25 % in the legal entity (direct beneficial owner). Equally registrable indirect ownership is given, if a corporate shareholder (parent) holds an interest of more than 25 % in the respective company and is (directly or indirectly) controlled by a natural person.
Control is deemed to be exercised through an ownership interest of more than 50 % in a corporate entity; also relevant, however, are any other criteria of control used for the purpose of preparing consolidated financial statements, such as through a shareholders’ agreement, the exercise of dominant influence, or the power to appoint the majority of board members.
If, after having exhausted all means of identification and provided that there are no grounds for suspicion, no natural person is identifiable who ultimately owns or exerts control over a legal entity, the natural persons who hold the position of senior managing officials of the legal entity (in particular, but not exclusively, members of the management board) are considered as beneficial owners.
The information to be registered includes name, date of birth, nationality, place of residence as well as type and volume of the beneficial interest or the share quota or the function of the relevant natural person.
Special rules and exceptions
With respect to private foundations, subject to registration are the founder(s), members of the foundation council (management board) and any beneficiaries receiving distributions of more than 2,000 € in a calendar year; similar rules apply to trusts.
Exempt from the registration obligation are associations in general, but also limited liability companies and partnerships where the shareholders or (regarding OG/KG) general partners are exclusively natural persons, as they are disclosed in the Companies’ Register anyway.
The described exceptions and threshold values are only general rules in cases of doubt; basically, all natural persons exerting a dominant influence on an obliged legal entity (corporate entity) have to be registered.
Means of registration
Registration has to be done electronically via the “Unternehmensserviceportal” (“USP”, www.usp.gv.at). Apart from the legal entity itself, also professional advisors, such as attorneys-at-law, tax advisors or notaries, may comply with the registration rules on behalf of the obliged entity.
Who can access the UBO Register?
All persons that are obliged to carry out money laundering and terrorism financing checks according to § 9 WiEReG as well as any person demonstrating a legitimate interest shall be granted access to the UBO Register. Besides, all registered legal entities are entitled to review the registered data concerning themselves via USP (free of charge). Furthermore, an extended register excerpt containing additional data may be retrieved. A user fee will be charged for access to the database, the amount of which is yet to be determined.
Penalties for violation of the registration obligation
Failure to register, the registration of incorrect data, as well as accessing the register without entitlement all constitute financial misdemeanors and may trigger fines up to 200,000 € or other coercive measures.