On 23 May 2017, new rules on the registration of real owners of Danish companies will enter into force. Companies must register information on their real owners as well as the real owners' rights with the Danish Business Authority.
As part of the implementation of the Danish Tax Haven Package and the Fourth Anti-Money Laundering Directive, act no. 262/2016 a register for all real owners is being implemented. In order to increase the transparency of Danish companies and to prohibit the companies from being used for tax fraud or other economic crimes, companies are now required to register both their legal owners as well as their ultimate real owners with the Danish Business Authority.
The changes affect the Danish company forms IVS, ApS, A/S, P/S, K/S, I/S, foundations, financial companies, companies with limited liability. (AMBA, FMBA, SMBA) and European business forms (SE, SCE and EEIG). Publicly listed companies, sole proprietorships, independent public companies, employee investment companies, small privately owned businesses and branches are not required to register their real owners.
A real owner is defined as a physical person "who directly or indirectly owns or controls a sufficient part of the shares or the voting rights, or who practice control through other means, with the exception of owners of companies which shares are traded on a regulated market".
If a physical person owns or controls approx. 25 % (or more) of the business, it indicates that the person is the real owner. A fixed threshold has not set and it is not only the shares or voting rights which determines whether a physical person is considered a real owner. If for instance a physical person owns 10% of the share capital and is entitled to appoint members of the management, the physical person may be considered as a real owner.
The general changes regarding registration are listed below. The changes, however, vary for certain types of companies.
In general, most businesses covered by the law shall collect information on the real owners of the business, including the rights of the real owners. If no real owners can be identified, the members of the executive board/the board of directors/the daily management must be registered instead. Foundations and associations are excluded from this rule.
When a business becomes aware that a physical person has become a real owner or if changes to information previously registered take place, the firm must register the new information with the Danish Business Authority as soon as possible.
Businesses are required to store the information concerning their real owners for 5 years after the end of the real ownership, and the businesses are required to store information on attempts to identify the real owners for 5 years after performing the attempts for identification. On request businesses have to submit the information to the Danish Public Prosecutor for Special Economic Crimes or other public authorities as a part of their performance of supervision and monitoring tasks.
Information on the real owners of a business must be registered with the Danish Business Authority's website no later than on 1 December 2017. The Danish Business Authority will publish a guideline on how to register real owners on 23 May 2017.