With the implementation of the Fourth Anti-Money Laundering Directive of the European Parliament and Council (EU) 2015/849 from May 2015, the Transparency Register (Transparenzregister) was introduced as of 1 October 2017. Since then, every legal entity subject to transparency obligations has been required to report its beneficial owners.
Until now, legal entities have been able to benefit from the so-called reporting fiction if their beneficial owners could be identified from documents electronically available in the relevant registers (commercial register, register of associations, partnership register, etc.).
With the entry into force of the Transparency Register and Financial Information Act (Transparenzregister- und Finanzinformationsgesetz, TraFinG), this reporting fiction has been abolished and the Transparency Register has been declared a full register.
As a legal entity subject to transparency obligations, your company has therefore been required since 1 August 2021 to submit a notification to the Transparency Register (although transitional periods (see section 5) generally apply until 2022 for new registrations).
Failure to report, or reporting that is late or incomplete, constitutes an administrative offence which, pursuant to § 56 Abs. 1 Nr. 55 ff. GwG, may be punished by fines of up to EUR 1 million.
If entry in the Transparency Register has not yet been made, urgent action is therefore required.
1. What must be reported?
The report must cover, on the one hand, the beneficial owners of legal persons under private law (GmbH, AG, cooperative) and registered partnerships (OHG, KG, partnership companies, etc.), and, on the other hand, the beneficial owners of trust arrangements and comparable legal structures.
Pursuant to § 3 Abs. 2 GwG, a beneficial owner is any natural person who directly or indirectly holds more than 25% of the capital shares or voting rights, or who exercises control in a comparable manner. If no such actual beneficial owner exists or can be identified, the fictitious beneficial owners (e.g. managing director, board member, or similar) must be reported.
For legal foundations and legal structures used to administer or distribute assets on a fiduciary basis, the beneficial owners pursuant to § 3 Abs. 3 GwG include, among others:
- any natural person who acts as settlor, trustee, or protector (if any),
- any natural person who is a member of the management board of the foundation,
- any natural person who has been designated as a beneficiary,
- the group of natural persons for whose benefit the assets are to be administered or distributed, where the natural person who is to become the beneficiary of the administered assets has not yet been determined,
- any natural person who otherwise directly or indirectly exercises a controlling influence over the asset management or distribution of income, and
- any natural person who can directly or indirectly exercise a controlling influence over an association that is a member of the management board of the foundation or that has been designated as a beneficiary of the foundation.
2. The following details on the beneficial owner must be provided (§ 19 Abs. 1 GwG):
- all given names, surname
- date of birth
- place of residence
- all nationalities
- nature and extent of the economic interest
3. Who must report?
The report must be submitted by the management of the relevant legal person itself, of the company, or by the trustee.
4. How must the report be filed?
The above-mentioned information on the beneficial owners must be transmitted to the Transparency Register online. To do so, the party required to file must first register at www.transparenzregister.de.
5. By when must the report be filed?
The legislator has granted a transitional period for reporting to the Transparency Register. Accordingly,
- AG, SE, KGaA must report by 31 March 2022
- GmbH, cooperative, European cooperative, partnership by 30 June 2022
- in all other cases by 31 December 2022 at the latest
the information pursuant to § 19 Abs. 1 GwG must be reported to the Transparency Register.
Exemption rules can no longer be relied upon.
However, the above-mentioned transitional periods do not apply to you if you were already required to be entered in the Transparency Register under the rules in force until 31 July 2021. They also do not apply if entry is expressly required (e.g. for bridging assistance/Überbrückungshilfen).
6. Review of entries
The entry must be reviewed on an ongoing basis – at least once a year – to ensure that it is complete and up to date. Entries legally required to be made in the commercial register must be made independently of the report to the Transparency Register.
Changes relating to the beneficial owners must be notified to the Transparency Register without undue delay. This applies not only to changes in shareholdings but also to changes of place of residence, name changes, and the like.
The review – like the determination of the beneficial owners – should be documented, and this documentation should be retained.
If you require support with the report to the Transparency Register or with the regular review and documentation, we are of course happy to assist. Simply give us a call so that we can agree on the details and provide you with a corresponding engagement letter, which you would then need to issue to us.
The annual fee charged by the Federal Gazette (Bundesanzeiger) of EUR 4.80 per year (since 2020, previously EUR 2.50) will be invoiced to you directly by the Bundesanzeiger.
We are happy to answer any further questions.
Frequently asked questions
Frequently asked questions
Who is required to report to the Transparency Register since the TraFinG?
Since the Transparency Register and Financial Information Act (TraFinG) entered into force on 01.08.2021, all legal entities under private law (e.g. GmbH, AG, cooperatives) as well as registered partnerships (e.g. OHG, KG, Partnerschaftsgesellschaft) are generally subject to reporting obligations. Trust arrangements and comparable legal structures must also report their beneficial owners. The previous reporting exemption for electronically retrievable register entries no longer applies, as the Transparency Register is now a full register.
Who qualifies as a beneficial owner under the German Anti-Money Laundering Act (GwG)?
Under § 3 Abs. 2 GwG, a beneficial owner is any natural person who directly or indirectly holds more than 25% of the capital shares or voting rights, or who exercises control in a comparable manner. If no actual beneficial owner can be identified, the fictitious beneficial owners must be reported, e.g. the managing director or board member. For foundations and fiduciary arrangements, extended rules under § 3 Abs. 3 GwG apply.
What information must be reported to the Transparenzregister about the beneficial owner?
Pursuant to § 19 Abs. 1 GwG, the following must be reported: all first names and the surname, date of birth, place of residence, all nationalities, and the nature and extent of the beneficial interest. Reporting is done online at www.transparenzregister.de after prior registration. Responsibility for the report lies with the management of the respective company or with the trustee.
Which transitional deadlines applied to the initial notification to the Transparency Register?
AG, SE and KGaA had to file by 31 March 2022; GmbH, cooperatives, European cooperatives and partnerships by 30 June 2022; all other legal entities by 31 December 2022 at the latest. However, the transitional deadlines do not apply if the registration obligation already existed under the old law by 31 July 2021, or if registration is expressly required, for example in connection with bridging aid (Überbrückungshilfen).
What fines apply for failure to report or incorrect reporting to the Transparency Register?
Failure to report, as well as late or incomplete reporting, constitutes an administrative offense under § 56 Abs. 1 Nr. 55 ff. GwG. It can be sanctioned with fines of up to EUR 1 million. For serious, repeated, or systematic violations, the fine may be significantly higher.
How often must entries in the transparency register be reviewed and updated?
Entries must be reviewed for completeness and accuracy on an ongoing basis, but at least once a year. Changes regarding the beneficial owners—such as altered shareholdings, changes of residence, or name changes—must be reported without delay. The review and identification of beneficial owners should be documented, and the documentation retained.