Where is information about the beneficial ownership of a company found?

Beneficial Ownership

The question of who is behind a company and who is its so-called beneficial owner has become increasingly important in recent years with regard to combating the financing of terrorism, money laundering and their predicate offences, such as tax crimes. The framework is set by the European Union with its Money Laundering Directive, most recently the 5th EU Money Laundering Directive (Directive [EU] 2018/843), which is implemented by Member States. On 19 June 2024, the new EU money laundering package was announced in the Official Journal of the EU, which consists of the 1st EU Money Laundering Regulation, the 6th EU Money Laundering Directive and the AMLA Regulation and will apply from 10 July 2027 or must be implemented by then. The 1st EU Money Laundering Regulation and the 6th EU Money Laundering Directive provide for further tightening of transparency regarding beneficial owners.

Beneficial owners of companies are those natural persons who ultimately own or control a company or those natural persons at whose instigation a transaction¹ is ultimately carried out or a business relationship is ultimately established (see Section 3(1) of the Money Laundering Act – GwG). The improved accessibility of this information should make it easier to combat money laundering and terrorist financing.

Enhanced due diligence obligations apply if the beneficial owner is a so-called politically exposed person (PeP). A PeP is defined in Section 1(12) GwG as any person who holds or has held a high-ranking important public office at international, European or national level. It also includes persons who hold or have held a public office below national level but of comparable political importance. PePs include, in particular, ministers, state secretaries, members of parliament, members of the administrative, management and supervisory bodies of state-owned companies (if the federal or state governments hold a stake of more than 50% and have more than 2,000 employees) and members of the management bodies of courts of audit.

In order to facilitate the identification of PePs, each EU Member State and the European Commission shall establish and update a list of PePs in accordance with Article 1(13) of the 5th EU Money Laundering Directive (Directive (EU) 2018/843), a list which specifies the precise functions to be considered as important public offices within the meaning of the Directive. In Germany, the Federal Ministry of Finance is responsible for drawing up and updating the list and sending it to the European Commission. The European Commission brings together the lists of EU member states and its own list and publishes a common list.

German Transparency Register

In Germany, beneficial owners can be found in the Transparency Register, which is accessible via an Internet portal. As part of the implementation of the 4th Money Laundering Directive (EU) 2015/849 of 20 May 2015, a transparency register was set up on 26 June 2017 in the form of a catch-all register that holds data on beneficial owners, provided this data is not already available in other publicly accessible registers.

The Act on the European interconnection of transparency registers and the implementation of Directive (EU) 2019/1153 of the European Parliament and of the Council of 20 June 2019 on the use of financial information to combat money laundering, terrorist financing and other serious crimes (Transparency Register and Financial Information Act), which was announced on 30 June 2021, changed the transparency register from a catch-all register to a full register. This means that all legal entities are obliged to notify their beneficial owner directly to the register-keeping office of the Transparency Register for entry. From 1 January 2023, an entry on the beneficial owners of all German companies and other legal entities will be available in digital format in the Transparency Register.

Information on beneficial owners in the Transparency Register

The first and last name of the beneficial owner, date of birth and place of residence, country of residence, type and scope of the beneficial interest and all nationalities are recorded.

Management of the Transparency Register

The Transparency Register is kept by Bundesanzeiger Verlag GmbH as the entrusted agency. In principle, the associations and legal entities in Germany specified in sections 20 and 21 GwG are obliged to report the current details of the beneficial owner to the Transparency Register in electronic form. Upon registration, the office keeping the register carries out a conclusiveness check of the reported data, Section 18(3) GwG. The content of the reported data is checked if a discrepancy report has been submitted.

Incorrect, incomplete or missing entries are subject to fines in accordance with Section 56(1) sentence 1 no. 55 GwG. The competent regulatory authority for the imposition of fines is the Federal Office of Administration (BVA). In addition, persons subject to anti-money laundering obligations (e.g. credit institutions, financial services institutions, insurance institutions, auditors, real estate agents or lawyers and notaries if they buy or sell real estate or commercial enterprises for the client) and certain authorities² must report any discrepancies they notice in the Transparency Register in accordance with Section 23a GwG. Obliged parties are also liable to a fine for failing to submit a required discrepancy report (Section 56(1) sentence 1 no. 66 GwG). Since the introduction of the obligation to report discrepancies in accordance with Section 23a GwG (1 January 2020), obliged entities have submitted a total of 8,851 discrepancy reports in 2020, 18,052 in 2021, 34,287 in 2022, 127,092 in 2023 and 120,352 in 2024. Authorities that are permitted to inspect the Transparency Register in order to perform their duties have submitted seven discrepancy reports in 2020, three in 2021, three in 2022, eight in 2023 and fourteen in 2024 to date. Final and non-appealable decisions on fines are published on the Internet by the BVA if the fine exceeds 200 euros.³

Inspection of the Transparency Register

The information on the beneficial owners in the Transparency Register is accessible to authorities, courts and the bodies specified in Section 2(4) GwG within the scope of their statutory duties, and to persons subject to anti-money laundering obligations within the scope of fulfilling their due diligence obligations under anti-money laundering law.

The Transparency Register has also been accessible to the general public since 1 January 2020 in accordance with the provisions of the Amending Directive to the 4th EU Anti-Money Laundering Directive (Directive [EU] 2018/843) (Section 23(1) GwG). In this context, a ruling by the European Court of Justice on 22 November 2022 in joined cases C37/20 and C601/20 stipulates that the provision of the EU Money Laundering Directive is invalid, which stipulates for the entire EU that information on the beneficial owners of companies or other legal entities entered in the Transparency Register is accessible to all members of the public without restriction in all cases. In order to protect the fundamental rights to privacy and data protection of beneficial owners, the data may only be made accessible under certain conditions. The notification obligations regarding beneficial owners remain unchanged and the continuation of the Transparency Register is also not affected.

In an EU member state, national laws must be in line with EU law. Therefore, a legitimate interest in accessing the Transparency Register must currently be demonstrated. Art. 74 of the 6th EU Money Laundering Directive provides for the reintroduction of the legitimate interest; this regulation must be implemented by the EU member states by 10 July 2025.

If interested parties wish to view the Transparency Register, they must register once online on the website www.transparenzregister.de. The individual registration steps are explained in more detail in the quick guide “Inspection of the Transparency Register for members of the public”.

To cover the administrative costs, a fee of EUR 1.65 is payable for each document that is inspected (see the list of fees in the special fee schedule of the Federal Ministry of Finance for the Transparency Register dated 15 December 2023, Transparency Register Fee Ordinance [TrGebV]).

If the beneficial owner has interests worthy of protection, it is still possible to have access to the Transparency Register restricted by the office keeping the register. For this purpose, the beneficial owners must present facts according to which public inspection would expose them to the risk of becoming victims of certain criminal offences (e.g. extortion) (Section 23(2) GwG). As of 20 September 2024, 4,423 requests for restriction have been

submitted. Since 2021, the office keeping the register has published annual statistics on the number of restrictions granted and the reasons for restrictions on its website under Downloads (direct link to the Statistics in PDF format) and transmitted them to the European Commission (see Section 23(2) last sentence GwG as amended).

As of 1 January 2021, law enforcement authorities and the Financial Intelligence Unit (FIU) were granted automated access to all data in the Transparency Register as part of their duties (see Section 26a GwG). The Transparency Register and the Financial Information Act have extended this possibility to the supervisory authorities, the Federal Central Tax Office, the local tax authorities and the federal and state constitutional protection authorities.

For D-EITI reporting, the Independent Administrator has a legitimate interest and is therefore authorised to access the Transparency Register.  For the companies invited to report, it determines whether they have an entry in the Transparency Register and whether this is plausible on the basis of the information available to it and to be obtained.⁴

The Independent Administrator was able to inspect all entries of the companies participating in the D­EITI in the Transparency Register and to check them for plausibility. On 24 April 2023, it announced: “After reviewing the information […] and comparing it with public sources available to us, we have not identified any implausibilities in the information (as of 21 April 2023). As a precautionary measure, we would like to point out that an audit in accordance with Section 23a GWG was completed for one participating company in April 2023 and an audit was still pending for another participating company at the time of our inquiry.”

The private sector players in the MSG examined whether voluntary disclosure of information on beneficial owners is possible. The companies pointed out that there are practical and legal obstacles to obtaining the consent of those affected. A basis under data protection law is required for the disclosure of beneficial owners and PePs. Without the consent of the data subjects, individual case assessments are necessary for each data subject, which is time-consuming, as contact persons in the companies must first be identified and contacted.

The EU member states are currently working together with the EU Commission on the networking of the European Transparency Registers in accordance with Art. 30 et seq. of the Amending Directive to the 4th EU Money Laundering Directive (Directive [EU] 2018/843). This networking will lead to access to the Transparency Registers of all Member States via a common European platform (“BORIS”). Following the announcement of the ECJ ruling, 12 member states suspended access to their Transparency Registers. The networking of the European Transparency Registers was partially suspended for this reason. However, the authorities already have access to the networked data.

Other publicly available information on company structures

Information on registered natural and legal persons as well as commercial partnerships (e.g. corporations, general partnerships) is recorded in the registers of the competent registry courts. These registers document persons authorised to represent the company and, for certain legal forms, information on other parties involved that must be published (e.g. in accordance with the German Commercial Code (HGB), Limited Liability Companies Act (GmbHG), Partnership Act (PartG), etc.).

The commercial register serves to disclose the facts and legal relationships of merchants and commercial companies that are of particular importance for legal transactions.  All authorised representatives and shareholders of commercial partnerships are entered in the commercial register and can be viewed by the public. The shareholders of a GmbH are included in the publicly accessible list of shareholders.

As part of the implementation of the so-called 4th EU Anti-Money Laundering Directive 2015, the 2017 GwG reform also created regulations that expanded the required shareholding information in shareholder lists in accordance with Section 40(1) GmbHG and the GmbH Shareholder List Ordinance.

Anyone is permitted to inspect the commercial register for information purposes (cf. section 9(1) sentence 1 HGB33). The right includes all documents to be submitted, including the lists of shareholders submitted to the register. Entries and documents from the commercial, association, cooperative and partnership registers can be viewed publicly online via the joint register portal of the federal states (www.handelsregister.de), as is also possible in the Transparency Register.

The Company Register contains entries in the above-mentioned registers and the disclosed documents, as well as accounting documents and company reports in accordance with the German Commercial Code (HGB) and publications in accordance with capital market regulations (e.g. German Securities Trading Act (WpHG)). As with the commercial register, anyone can view the Company Register online (Sections 8b, 9(6) HGB; see www.unternehmensregister.de).

The beneficial owner of listed companies can often be determined on the basis of the voting rights notifications in the Company Register. Pursuant to Section 33 (1) WpHG, reaching, exceeding and falling below 25% of voting rights is subject to notification, whereby far-reaching attribution facts apply pursuant to Section 34 WpHG (e.g. in the case of fiduciary constellations). These notifications must be published in accordance with Section 40 WpHG and can be viewed in the Company Register. The 25% threshold also corresponds to the notification requirement for significant shareholdings in unlisted stock corporations (Sections 20 et seq. AktG (German Stock Corporation Act).

There is further information about companies and individuals that can be viewed online, which serves different purposes and can only be mentioned here as examples. For example, insolvency proceedings can be viewed in the Insolvency Notifications and data from debtor directories in the Joint Enforcement Portal of the Federal States.

Public contracting authorities are obliged or can access the electronic competition register in the context of procurement procedures in order to check companies with regard to the existence of final criminal convictions and penalty orders or decisions imposing fines for certain economic offences. Details are regulated in the Competition Register Act.

¹ A transaction refers to all actions that have the purpose or effect of moving money or other assets.

² The supervisory authorities, the authority pursuant to section 25(6) and section 56(5) sentence 2 as well as the Financial Transaction Investigation Unit shall be subject to the duty set out in sentence 1, provided that this does not impair the performance of the authorities’ duties.

³ Federal Office of Administration (2022): Decisions on fines (Transparency Register). URL: https://www.bva.bund.de/DE/Das-BVA/Aufgaben/T/Transparenzregister/bussgeldentscheidung/bussgeldentscheidung_node (accessed 9 October 2024).

⁴ This is done in accordance with the terms of reference to the Independent Administrator, which were decided by the D­EITI MSG