A new regulation came into force in France on 1 August 2017 applying to all French companies incorporated from that date. Existing companies must comply with the new filing obligations by 1 April 2018.
The legislation places a new duty to declare the ultimate beneficial owners (UBOs) of all non-listed corporate entities registered in France.
What is an UBO?
As far as commercial companies are concerned, UBOs are those who directly or indirectly hold:
- more than 25% of the share capital and/or voting rights of a company; or
- a controlling power over the management, the management board or shareholder’s meeting of a non-listed company (typically through any kind of shareholder’s arrangement).
French entities and their legal representatives that need to declare UBOs includes all:
- existing non-listed French companies and economic interest groupings, which had a legal status as of 31 July 2017 including subsidiaries of French or foreign listed companies
- existing French branches of foreign non-listed companies
- other non-listed companies that register an entity in France
- Once declared, UBO filings must be updated regularly. Updated filings must be made within 30 days following any changes that would make it necessary to update the information filed with the UBO register.
Non-compliance with the new French rules on UBO filings could result in a company and its directors receiving a fine of up to €37,500 for an entity or €7,500 and/or 6 months’ imprisonment for an individual. Additional restrictive measures may also be imposed on both companies and individuals.
Who can access the UBO Register?
Currently, information disclosed on the UBOs is not in the public domain. The information is mainly available to a wide range of public authorities and regulators. Access is also to a limited number of individuals whose aim is to fight money laundering and the financing of terrorism. Other individuals can apply to the commercial courts asking for access to the UBO register, which will be granted if they can justify that they have a valid reason.
If your company is operating in France and you would like to know more about how to make your declaration, or for advice on any other aspect of doing business in France, contact us.