Transparency Register Germany: A Paradigm Shift and What it Means for Companies
Germany is intensifying the fight against money laundering (see also Tip). Against this backdrop, the German parliament has also passed a new law governing the “Transparency Register and Financial Information” (Transparenzregister- und Finanzinformationsgesetz, TraFinG), which came into effect on 1 August 2021.
While the amendment is a step towards the interconnection of all European transparency registers, the changes come with a variety of new obligations for companies which were previously exempt from registration obligations.
Previously, mandatory registration in the transparency register only applied to cases where the beneficial owners were not mentioned elsewhere, such as in the commercial, cooperative or partnership register. However, with the new regulation, the paragraph under which companies were previously exempted from registration has been omitted without replacement. As a result, many companies that previously benefited from an exemption must now comply with the new bureaucratic challenges.
We can answer your questions about the transparency register and take care of registration for you. Richard Hoffmann, Lawyer, Ecovis Heidelberg, Germany
The German Parliament (Bundestag) has indicated that approximately 2.3 million companies will now be subject to mandatory registration. For foreign companies, this regulation applies if the company directly or indirectly owns real estate in Germany (e.g., with GmbH shares).
Tip: New Money Laundering Offense in Germany
On 18 March 2021, the German federal government introduced the new Section 261 of the Criminal Code (StGB) – the criminal offense of money laundering. You can find out what the consequences are here:
Companies that were previously exempted from mandatory registration can take advantage of a transition period, during which they can prepare the necessary steps. The deadlines differ according to the company form, as set out in the new law:
31 March 2022
Public limited companies, SE, partnerships limited by shares
30 June 2022
Limited liability companies, cooperative companies and partnerships
31 December 2022
Registration after the deadline could lead to heavy fines. It is important to note that these transition periods only apply to companies which, under the old regulation, were exempted from registration in the transparency register before 31 July 2021. This means that the majority of limited partnerships (including GmbH & Co. KG) are already obliged to register now. The transition period also does not apply to companies founded after 31 July 2021.
What Companies Should Do Now
Even if the coming year is still a long way off, businesses should act now. To avoid fines or complications, the beneficial owner of the company must be determined and the necessary information must be submitted to the transparency register, explain the Ecovis experts.
In addition to our existing partners of ECOVIS Ardur Tax AS we welcome our new partners from ECOVIS Legal Norway AS headquartered in Oslo.
Geir Peter Hole will be your first point of contact for legal services in Norway. Geir had many years’ experience as a legal advisor at Oslo Tax Office before joining Ernst & Young, where he was stationed in Oslo and London. He then joined Wiersholm, one of Norway’s largest and most prestigious law firms where he further developed his specialty areas. In addition to having worked in London he has consistently served international clients on cross-border issues and assignments, lastly in the position of Head of Tax and Legal Norway in Grant Thornton International from 2009-2017.
We warmly welcome our new colleague from Oslo to the Ecovis family!
Ecovis welcomes its new partners from ECOVIS Bahamas headquartered in the city of Nassau situated on the island of New Providence, The Bahamas.
ECOVIS Bahamas is a full-service mid-tier public accounting and consultancy firm based in Nassau. The Firm’s core practice areas are audit, insolvency and assurance services. Other services include accounting, business consultancy services, corporate restructuring, tax consultation and support, payroll, and risk advisory. The firm was established at the beginning of 2021 as a spin-off from the local consulting firm of Baker Tilly. James Gomez, one of the founders of ECOVIS Bahamas, was one of the senior partners at Baker Tilly in The Bahamas. Noreen Campbell, the second founder of ECOVIS Bahamas, also worked as Senior Audit Manager at Baker Tilly:
“As partners, we are pleased to be recognized as a member firm in the ECOVIS International family! The rebranding of our practice is an exciting development for us, our employees and more importantly, our clients. The Ecovis brand will permit us to advance our firm in the local market by delivering a unique experience to our clients, and by extension our community partners.
Our staff members are empowered to make decisions in order to keep the process moving forward for our clients, and as a result, we have consistently exceeded all industry standards for financial reporting quality, adhering to stringent continuing education standards and in-depth expertise that virtually eliminates the traditional learning curve when presented with the toughest challenges”.
We warmly welcome our new colleagues from the Bahamas to the Ecovis family!