The Transparency Register becomes a full register - compulsory registration for ALL companies

Since 01 August 2021, the new “Transparenz-Finanzinformationsgesetz Geldwäsche“ (“TraFinG Gw”) applies in Germany, amending the “Money Laundering Act” (“GwG”). All German companies are now obliged to report their beneficial owners to the Transparency Register. This affects in particular those companies that were previously able to make use of the notification fiction in section 20 para. 2 GwG.

Previously, under section 20 para. 2 GwG, companies were only required to submit a notification to the Transparency Register if the required information on the beneficial owner was not already available from other registers, such as the Commercial Register (“notification fiction”).

Beneficial owners within the meaning of section 3 para. 1 GwG are natural persons who ultimately own or control the contracting party, or the natural person at whose instigation a transaction is ultimately carried out or a business relationship is ultimately established.

In the case of legal entities such as GmbH and UG (haftungsbeschränkt), the beneficial owner pursuant to section 3 para. 2 GwG is therefore any natural person who directly or indirectly

  • holds more than 25% of the capital shares,
  • controls more than 25% of the voting rights or
  • exercises control in a comparable manner.

However, pursuant to section 3 para. cl. 5 GwG, the legal representative, the managing director or the partner of the contracting party may also be deemed to be the beneficial owner, provided that no beneficial owner can be identified even after comprehensive checks have been carried out and no criminal acts pursuant to section 43 para. 1 GwG may have been committed.

With the change to the GwG effective 01 August 2021, the beneficial owners of all legal entities in Germany must now be listed directly and immediately in the Transparency Register, regardless of whether they can be identified from other registers. This will transform the Transparency Register into a full register.

The background to the change is the interconnection under European law of the Transparency Registers of all EU states in order to combat money laundering and terrorist financing even more effectively by improving transparency about legal entities and their beneficial owners.

However, pursuant to section 59 para. 8 GwG nF, the legislator provides transitional periods within the notification of the beneficial owner to the Transparency Register must be made:

  • until 31 March 2022: AG, SE and KGaA
  • until 30 June 2022: GmbH, UG (haftungsbeschränkt), eG, SCE and partnerships
  • until 31 December2022: Other

Violations of the obligation to register with the Transparency Register can be punished with severe fines. Furthermore, violations pursuant to section 57 GwG can be made public and companies can thus be “pilloried”.

Despite the transitional periods, managing directors should therefore already consider registering their company in the transparency register and, at best, register the company. We will be happy to advise you accordingly, carry out the registration for you and also help you with any declarations of discrepancy. Please contact us.