Spain UBO Register: The Spanish Ultimate Beneficial Owner Registry in Spain
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Spain UBO Register: The Spanish Ultimate Beneficial Owner Registry in Spain

Spain Approves the Ultimate Beneficial Ownership Registry (UBO Registry) by Royal Decree

Navigating the complexities of corporate compliance, international companies with business interests in Spain must now acquaint themselves with the newly instituted Spain UBO register. This central public registry, designed to hold information on the ultimate beneficial owners of Spanish entities, marks a significant step in Spain’s commitment to enhancing transparency in business operations. As regulations have been officially gazetted, the decree operationalizing this register will take effect from 19 September 2023. In this article, we will delve into the intricacies of the Spain UBO register, elucidating its purpose, detailing the registration process, and outlining the implications for entities that fall under its mandate.

Close-up of a hand stamping a document, symbolizing approval, with the context of the UBO Register in Spain

What is the UBO Register in Spain?

The Ultimate Beneficial Ownership (UBO) Register in Spain (Registro de Titularidades Reales) is a pivotal instrument in the country’s fight against financial crime, specifically designed to counteract money laundering and terrorist financing.

Established under Royal Decree 609/2023, the UBO Register serves as an electronic, centralized, and unique database across the Spanish territory. Managed by the Ministry of Justice and overseen by the General Directorate of Legal Certainty and Public Faith, its purpose is to collect and disclose information on the individuals who ultimately own or control Spanish legal entities and structures without legal personality.

Under the decree, various registries such as those of Foundations, Associations, Cooperatives, and Mercantile entities are required to transmit existing beneficial ownership data to the UBO Register. This process is set to ensure that all relevant information is updated daily after the initial transmission period. Entities that are not recorded in these registries or those that do not declare their UBO through other means must report directly to the UBO Register within two months from the decree’s enforcement.

The term ‘Ultimate Beneficial Owner’ refers to the natural person who ultimately owns or controls more than 25% of a company’s shares or voting rights, or who exercises control over an entity through other means. This definition aligns with the EU’s Fourth Anti-Money Laundering Directive (AMLD 4), which mandates member states to maintain UBO registers to enhance transparency and prevent financial crimes.

For commercial companies, any change in beneficial ownership must be reported to the Commercial Registry within ten days of awareness. The information in this register will be accessible to authorities, entities subject to anti-money laundering regulations, and those with proven legitimate interest following a recent EU Court of Justice ruling.

The Spanish Central UBO Registry not only aggregates beneficial ownership information from various sources but also facilitates interconnection with other European registers. This centralized approach aims to streamline access to beneficial ownership data for relevant parties while adhering to legal standards set forth by both national and EU directives. With its implementation on 19 September 2023, Spain takes a significant step towards creating a more transparent and secure business environment.

Ensure your company meets Spain’s latest compliance standards with LaWants. Our expertise in the Spanish UBO registry will guide your business through each step of the process seamlessly. Contact us today to secure your company’s compliance and enhance your operational transparency.

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Which entities must record their ultimate beneficial ownership in the spanish UBO register?

In Spain, a comprehensive range of entities are mandated to register their ultimate beneficial ownership in the UBO register. This includes all legal entities incorporated in Spain and entities or structures without legal personality that meet specific criteria related to their management, activities, or intentions to engage in business within Spanish territory.

The criteria for identifying an Ultimate Beneficial Owner (UBO) revolve around ownership and control. A UBO is generally defined as a natural person who directly or indirectly owns more than 25% of the company’s shares or voting rights, or who has control over the company through other means. For instance, in a corporate structure, if an individual holds 30% of a company’s shares, they would be considered a UBO and their details would need to be recorded in the register.

Specifically, the following entities are required to disclose UBO information:

  1. All Spanish nationality legal entities.
  2. Entities or structures without legal personality with their effective management seat or main activity in Spain, or those managed by individuals or legal entities resident or established in Spain.
  3. Entities or structures without legal personality not managed from Spain or another EU State, intending to establish business relations, carry out occasional transactions, or acquire real estate in Spain.

 For legal persons with direct or indirect ownership of shares or voting rights, the percentage of participation must be specified along with any intervening entities in the control chain.

Exceptions apply to companies listed on an EU regulated market or equivalent third countries and their majority-owned subsidiaries that are subject to transparency requirements regarding their beneficial ownership.

Commercial companies must report any changes in beneficial ownership to the Commercial Registry within ten days of becoming aware. Entities not registered elsewhere must declare their UBOs directly to the central registry within two months from the decree’s enforcement and annually thereafter in January.

This registration process is part of Spain’s adherence to international standards aimed at preventing financial crimes by ensuring transparency in the ownership and control of corporate entities.

Information Contained in the Spain UBO Register

For each UBO, the register records a comprehensive set of data which includes: 

  • First name
  • Last name
  • Date of birth
  • Type and number of identification document
  • Country of issue for identification documents not issued in Spain
  • Country of residence
  • Nationality
  • Criteria qualifying them as a beneficial owner
  • A valid email address for notification purposes

When it comes to trusts and similar legal structures, the register requires additional information. Trustees must report details about the settlor, trustee, protector (if applicable), beneficiaries or class of beneficiaries, and any other individual who ultimately has control over the trust. The minimum information required for these individuals mirrors that for UBOs: name, month of birth, nationality, country of residence, and the nature and size of the beneficial interest they hold.

In terms of reporting requirements, entities subject to articles 4 bis and 4 ter of the Spanish Anti-Money Laundering and Counter-Terrorist Financing Law (AML/CFT Law) must submit an initial declaration electronically to the Spanish Central UBO Registry within two months from the enforcement of RD 304/2014 if existing registry data is incomplete. Trusts and analogous structures also have a similar obligation for initial reporting.

The data must be provided through electronic means by the management bodies of the legal entity to either the Central Register of Beneficial Ownership or another competent registry with a regulated declaration procedure. This extends to notarial public documents in accordance with Article 4 of RD 609/2023 and Articles 4 bis and 4 ter of the Spanish AML/CFT Law.

Detail of a person's hand filling out a form, pertinent to the administrative processes of the Spain UBO Registry

UBO Register in Spain: Registration Process and Requirements

The process of registering an Ultimate Beneficial Owner (UBO) in Spain is a systematic one, aimed at upholding the integrity of financial transactions and preventing the misuse of corporate structures for illicit activities. The registration process, rooted in the Ministerial Order 319/2018 by the Spanish Ministry of Justice, requires Spanish non-listed companies to disclose their UBOs to the Companies Registry and maintain updated records.

Companies must identify their UBOs annually by filing a form at the Commercial Registry alongside their annual accounts. For existing companies, this became mandatory after 21 March 2018, while new companies must comply upon submitting their first annual accounts. The form must be resubmitted only if there have been changes to the UBO information previously reported. A UBO is defined as any individual who directly or indirectly holds more than 25% of the company’s share capital.

In cases where there is an indirect UBO, companies are required to disclose the chain of control that leads to the Spanish entity. If no direct or indirect UBO exists, the company’s management body members must be identified on the form. This requirement aims to enhance transparency in complex ownership structures and ensure that entities are held accountable.

To prevent discrepancies or contradictory information from arising, various measures have been introduced. Obliged entities under anti-money laundering regulations and authorities requesting beneficial ownership information must report any observed discrepancies between their data and that contained in the UBO Registry. Failure to comply with these obligations can result in severe penalties, including the closure of the register as stipulated by Article 378 of the Commercial Register Regulation.

Upon implementation, the Central Register of Beneficial Owners (CRBO) will conduct an initial data transfer from competent registries within nine months. This will be followed by daily updates to ensure that information remains current and accurate. Should discrepancies arise, precedence will be given to the most recent or reliable data.

Entities are responsible for verifying that their submitted information is adequate and current. If not, they must file a supplementary declaration by 19 November 2023. Specific requirements apply to different entities:

Trusts and similar structures without legal personality must submit their initial declaration by 19 November 2023.

  • Foundations, associations, and other legal persons not previously registered must declare beneficial ownership within one month after incorporation or upon becoming obliged to identify beneficial owners.
  • All entities must submit an annual declaration in January, regardless of changes in beneficial ownership.
  • For business companies, the declaration form used with annual accounts will be updated to meet new regulatory requirements.
  • Investment fund management companies are required to declare beneficial owners of the funds they manage.

Access requests for CRBO information have been opened for media and NGOs, including registration, modification, or deletion of trust data; opposition to data processing; exclusion requests; and appeals against refusals to provide information. During the nine-month transitional period, additional procedures will become available to ensure compliance with this vital regulatory framework.

Facing challenges with the new UBO registration requirements in Spain? Lawants is here to assist. Our skilled consultants specialize in spanish corporate compliance and beneficial ownership issues, offering tailored advice for foreign entrepreneurs. Contact us and navigate these regulations confidently.

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How Long is the Data Stored into the UBO Register For?

The retention of data within the Spanish UBO Register is subject to stringent guidelines that balance the need for transparency with privacy considerations. Information on ultimate beneficial owners is maintained in the UBO Registry for the duration of their tenure as beneficial owners. Once an individual ceases to hold this status, their information is retained for an additional ten-year period.

This extended retention period is crucial for ongoing investigations and retrospective analyses in combating money laundering and terrorist financing. It ensures that historical data can be accessed by authorized entities long after the beneficial ownership has changed, providing a trail that could be essential for legal and compliance procedures.

How to Access the Spanish UBO Register

The Spanish UBO Register, while fostering transparency in business ownership, upholds strict protocols to protect sensitive personal information, striking a balance between public interest and individual privacy. Access to the register is not entirely open and is contingent upon the applicant demonstrating a legitimate interest.

Authorities with jurisdiction over money laundering and terrorist financing, as well as their associated offenses within any EU country, are granted free and unrestricted access. This includes notaries, registrars, their preventive bodies, and national and European entities handling European funds. Their access is integral to fulfilling their regulatory and oversight functions.

For those subject to Law 10/2010, such as financial institutions and other obligated entities under anti-money laundering laws, access is granted upon payment of a fee and the provision of a legitimate interest. Their interest is presumed legitimate if they articulate the purpose of their inquiry in line with the objectives of the Central Register of Beneficial Owners (CRBO). This ensures that they can comply with due diligence obligations by obtaining certifications or extracts from the register.

Other individuals or entities must also demonstrate a legitimate interest, which is readily presumed for media or civil society organizations engaged in the prevention and combat against money laundering and terrorist financing. Additionally, if an entity or a natural person listed as a beneficial owner in the CRBO requests access, their legitimate interest is also presumed.

Access to CRBO information requires an electronic application process with authenticated identification of the applicant. In cases where providing access could result in disproportionate risk to the beneficial owner, access may be justifiably denied.

Moreover, there are provisions to restrict access when it may expose a beneficial owner to risks such as fraud, kidnapping, extortion, harassment, violence or intimidation, or other severe threats. This protective measure extends to minors and individuals with limited capacity or those under special protection measures. Requests to limit access must be made to the person in charge of the UBO Registry before any potential exposure occurs.

Non-compliance with the Obligation to Inform the UBO Register

Entities that neglect the duty to report their ultimate beneficial ownership to the Spanish Central UBO Registry face serious repercussions. Article 378 of the Commercial Registry Regulations stipulates that non-compliance, whether by failing to identify on the beneficial owner declaration form or by omitting proof of identification when filing annual accounts, will result in the closure of the registration sheet within the Mercantile Registry. This administrative closure effectively limits the entity’s ability to register documents and conduct certain legal business operations.

Moreover, such failure constitutes an administrative offense, attracting penalties that are yet to be fully detailed. The Ministry of Justice holds the authority to define the gravity of each infraction, prescribe potential sanctions, and outline the punitive process. The ministry also has the jurisdiction to exercise this sanctioning power.

The recent Royal-Decree 5/2023, amending the Spanish Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) Law, reiterates that any disregard for the obligation to identify and report to the Spanish Central UBO Registry, as well as other mandates set forth in RD 609/2023, will lead to an administrative infringement. This serves as a clear signal of Spain’s stringent approach toward ensuring compliance with AML/CFT regulations.

Two professionals discussing over a graph, highlighting the collaborative approach to Spain's UBO registry compliance

Controversial Aspects of the UBO Register in Spain

The implementation of the UBO register in Spain has not been without its challenges and controversies. One of the primary concerns revolves around the accuracy and completeness of the data. Companies and authorities alike face difficulties ensuring that the information recorded is both current and reflective of the true beneficial ownership. The dynamic nature of business holdings means that maintaining an up-to-date registry requires constant vigilance and prompt reporting of changes.

Additionally, there has been criticism regarding the reliance on the register’s data. While the establishment of a centralized register was intended to provide legal certainty for obligated parties under Law 10/2010 in identifying beneficial owners, the regulation mandates that these parties cannot solely depend on the information from the Central Register of Beneficial Owners (CRBO). Instead, they are required to conduct additional due diligence checks, which can add layers of complexity and administrative burden.

Another contentious point is the imposition of fees for access to the register. As obligated parties are legally required to consult the register, some argue that charging for access runs counter to the principle of facilitating compliance with anti-money laundering obligations. This requirement has raised questions about whether it creates an unnecessary barrier for entities that are already mandated by law to seek this information.

Spain is actively working to address these challenges by refining processes and considering feedback from businesses and legal experts. Ensuring that the UBO register serves its intended purpose without imposing undue burdens remains a balancing act for Spanish authorities as they navigate the intricacies of financial crime prevention.

Conclusion

As the European Union continues to evolve its regulatory framework, the Spain UBO register is poised to undergo further changes to enhance its effectiveness in promoting transparency and combating financial crimes. Spain, in its commitment to these international efforts, is likely to adapt and refine the UBO register in line with emerging EU directives and global best practices.

The landscape of financial regulation is not static, and as such, we can anticipate that the Spanish authorities will explore avenues for strengthening the UBO register system. This could include measures to improve data accuracy, streamline the reporting process, and reduce administrative hurdles for obligated entities. Furthermore, increased cross-border cooperation is on the horizon, with Spain expected to play a pivotal role in facilitating the exchange of beneficial ownership information among EU member states.

Law firms specializing in corporate compliance and financial regulation such as Lawants will continue to be invaluable partners for businesses navigating this evolving terrain. Our expert lawyers guide companies through registration processes, ensure compliance with current and future legislation, and provide strategic advice on managing the implications of beneficial ownership disclosure.

Streamline your understanding and registration under Spain’s UBO requirements with LaWants. Our dedicated team provides comprehensive tax and accounting consultancy to help you maintain compliance and focus on growing your business. Contact us now for expert guidance and support.

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