Transparency Register Need for action by German subsidiaries/companies and foreign real estate companies

According to § 20 of the German Anti-Money Laundering Act (GwG), legal entities under private law and registered private partnerships must "obtain, retain, and keep up-to-date certain information about their ultimate beneficial owners and inform the competent registration authorities immediately for entry in the Transparency Register". In addition to identifying data such as first and last names, date of birth, and nationality, other data that must be reported (§ 19 para. 1 GwG) includes information on the nature and scope of the economic interest, i.e., it must be specified, in each case, on what the status as ultimate beneficial owner is based (§§ 20 para. 1 p. 5, 19 para. 3 GwG).

From “catch-all” register to full register – international scope

The exceptions made until 31 July 2021 for data already available in other registers (in particular, the Commercial Register and Land Register) and for listed companies have been eliminated. All companies are thereby required not only to identify their ultimate beneficial owners but also to actively report these to the Transparency Register for inclusion in the register. The companies themselves are responsible for ensuring that their data is correct and up-to-date.

Companies with their registered office abroad are subject to notification if they acquire or hold ownership of property situated in Germany or hold shares in or have an economic interest in a company owning land in Germany -– even if only indirectly through another company. In this case, the mere obligation to acquire such already triggers the notification obligation; the notification requirement is only non-applicable if the information has already been transmitted to the transparency register of another EU Member State (§ 20 paragraph 1 p. 2 and 3 GwG). Thus, foreign corporate groups are also affected with regard to their German companies and their German real estate assets.

Transitional periods and impending sanctions

The notification is made electronically via the Transparency Register website, with different transitional periods depending on the legal form:

• For stock corporations (AG), Societas Europaea (SE), and partnerships limited by shares (KGaA), the deadline is 31 March 2022.
• For limited liability companies (GmbH), cooperatives, and European cooperatives or partnerships, the deadline is 30 June 2022.
• All other legal entities or partnerships must register by 31 December 2022 at the latest.

Registration as such is free of charge, but an annual fee of around €20 is currently charged for maintaining the register. If the information is not reported or is reported late, fines of up to €100,000 (in the case of reckless violations) or €1 million (in the case of serious violations) can be charged. Any fines imposed, and the entities on which these have been imposed, are published on the website of the German Federal Office of Administration as the responsible authority. The list is freely accessible and can be viewed by others.

Outlook: European Transparency Register

According to § 26 GwG, the Transparency Register is to be linked to the registers of other EU Member States via the European central platform established by the Directive (EU) 2017/1132. In the longer term, however, the differing national regulations will be further harmonised and all communications will be centralised in a European Transparency Register. In July 2021, the European Commission presented a comprehensive package of legislation dealing with this subject, which should soon entail further obligations of due diligence and transparency for European companies.

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