Transparency register Germany
FAQ on reporting requirements, beneficial owners, entries, inspection, fines, consultation letter from the BVA.
After its beginnings, the transparency register has grown into a full register. Not only fiduciary holdings and straw man constellations are affected, but every company and every beneficial owner. The german law on the transparency register, the GWG ("Money Laundering Act") leaves many questions open for practice. Their importance should not be underestimated in view of the drastic consequences - high fines, liability of managing directors and board members. The answers to the most important questions in german practice can be found below.
Our consulting services
Our consulting services for companies, managing directors, board members, shareholders and trustees in Germany
Our attorneys and certified specialists provide support to claimants, board members, shareholders and companies in Germany primarily on the following topics concerning the transparency register
- Advice and practical support on reporting obligations under the GWG
- Support with entries in the transparency register, notifications of discrepancies, inspection
- Advice and representation regarding the restriction of inspections
- Advice on the deletion of incorrect and erroneous entries in the transparency register
- Assistance with hearing letters from the Federal Administrative Office (BVA)
- Tactical and legal representation in defense and defense against penalty notices / fines
- Compliance - establishment of internal company structures and processes that conform to the transparency register
- Enforcement / defense of liability claims against managing directors, board members
- Special cases, including executors, veto rights, right of objection, voting agreements, acting in concert
Our highly qualified and specialized team of lawyers and certified specialists for german corporate law at our offices in Hamburg, Berlin, Munich, Frankfurt and Cologne will advise you on all issues relating to the transparency register.
For a non-binding inquiry, please contact one of our contacts directly by phone or e-mail or use the contact form at the bottom of this page.
What is the german transparency register?
The transparency register is an electronic platform maintained by the German Federal Gazette. As its name suggests, the transparency register is intended to create transparency. Transparency is to be created with regard to the actual beneficial owners of german companies. The legislator hopes that this will prevent criminal acts, terrorism, corruption and money laundering. Thus, the legal regulations can be found in the Money Laundering Act (GWG - "Gesetz über das Aufspüren von Gewinnen aus schweren Straftaten").
Who is affected by the transparency register? Who is required to report?
In principle, every entrepreneur or economically active person in Germany is affected by the transparency register. Specifically, the following companies, corporations or communities ("associations")' are affected in principle:
- Stock corporations (AG)
- Societas Europaea (SE)
- Partnerships limited by shares (KGaA)
- Limited liability companies (GmbH)
- municipal enterprises
- registered associations (e.V.)
- registered cooperative (eG)
- legally capable foundations, non-legally capable foundations
- Societas Europaea (SE)
- general partnerships (OHG)
- limited partnerships (KG and GmbH & Co KG)
- partnership companies (PartG)
- Community of heirs
- Preliminary companies
- not: civil law partnerships (GbR)
- not: listed companies
In addition, due to the concept of the beneficial owner, all persons in Germany are affected who
hold more than 25 percent of the company's shares or voting rights or who (can) exercise control in a comparable manner.
Also affected may be the legal representatives of the aforementioned "associations", which in free float constellations are deemed to be fictitious beneficial owners (on this term below). In this respect, the following are also affected:
- Managing directors
- members of the board of directors
- managing partners, partners
Are foreigners - foreign persons, shareholders and companies - also affected by the german transparency register?
Yes. Insofar as there is an obligation to notify the transparency register, foreign persons, shareholders and companies are also obliged to provide the relevant information.
What must managing directors, board members, (managing) partners do under german law?
The German Money Laundering Act obliges management bodies of the company - i.e. in particular GmbH managing directors, management boards of non-listed AG / association / cooperatives/ / foundations and managing partners of KG, OHG, GmbH & Co KG - to first obtain information about each beneficial owner (for the term see below). This includes the following information:
- First name, last name
- Place of residence
- Date of birth
- Type and nature of economic interest
Managing directors of german limited liability companies (GmbH), management boards of unlisted stock corporations (AG) / associations / cooperatives and managing partners of limited partnerships (KG), general partnerships (OHG), limited liability companies (GmbH & Co KG) must then report this information to the transparency register (see below). To ensure that the management bodies concerned receive the information required for reporting, the german law provides for corresponding duties of cooperation for the persons concerned.
Further obligations of managing directors, board members, (managing) partners in Germany include keeping the information on beneficial owners and keeping it up to date.
What do partners, shareholders and members of cooperatives in Germany have to do?
Shareholders of a german GmbH (limited liability company), shareholders of an AG (if not listed on the stock exchange), members of a cooperative as well as partners of a partnership are obliged under the GWG to actively notify their respective "associations" of the reportable information - i.e. first name, last name; place of residence; nationality; type and manner of beneficial interest. This obligation also applies to the shareholder who holds the interest only as a trustee. It is important to know that any change in this information must also be reported immediately.
How do managing directors, board members, managing partners shareholders receive the information for the transparency register?
Members of an "association" (partners, shareholders, cooperative members) are obliged to provide the relevant information to their respective associations. Managing directors, board members, managing partners are in this respect required to request the information from the "members of their association".
In simple words: A managing director of a german GmbH must - if he does not have the information - request the information from his shareholders. This is a particular challenge for managing directors, board members, managing partners in group situations and in chains of shareholdings.
What is the definition of the term "beneficial owner"? Who is the beneficial owner under german law?
The ultimate purpose of the transparency register is to identify the beneficial owners ("beneficial owners") behind a german company. According to the GWG, a beneficial owner can ultimately only be a natural person who
- more than 25% of the capital shares or
- more than 25% of the voting rights of a company, or
- exercises control over a company in another comparable manner.
Indirect control is sufficient.
What does the transparency register mean for the compliance obligations of managing directors and board members in Germany?
The obligation to provide reportable information to the transparency register thus joins the long list of compliance obligations of managing directors, board members and managing partners in Germany. The reporting obligations under the GWG must be part of a company's compliance. Handily, this already reads in the legislative materials:
"The duty to obtain, retain, keep up to date and pass on the information are compliance duties that oblige to take appropriate internal organizational measures to comply with the statutory duties. It is the responsibility of the management body of legal entities or registered partnerships to establish such organizational measures, in particular an effective internal monitoring and reporting system. These measures must ensure that the information obtained is promptly archived and reported to the transparency register. A breach of these obligations may result in a sanction pursuant to Section 56 (1) No. 56."
Violation of the reporting obligations with regard to the transparency register may have serious consequences for the company concerned (fines - see below). The reporting body - managing director, board of directors, managing partner - also faces drastic consequences, including:
- damages (managing director/board of directors),
- dismissal (managing director/board member).
Does the reporting obligation not apply if the information subject to the reporting obligation is already contained in the commercial register?
No. The transparency register is a so-called full register (has become). It contains the complete data and information. This means that a company is also subject to reporting requirements with regard to the transparency register if the data and information are already contained in the commercial register or comparable public registers.
Note transitional period: It should be noted that the german legislator has provided transitional periods for notifications within the framework of the transparency register and financial information act (2021) (Section 59 GWG). The previous reporting fiction ("what is in the Handeslregister is considered reported") is therefore no longer applicable. The transition periods are different for the various legal forms:
- stock corporation AG, SE, partnership limited by shares KGaA - March 31, 2022.
- limited liability company GmbH, cooperative eG, partnership - June 30, 2022
- all other legal entities / registered companies - December 31, 2022
Notwithstanding the transition periods, it is recommended to have any reporting obligations or notification requirements checked now and also to consider immediate reporting.
How does the notification to the german transparency register take place?
Online registration on the website of the transparency register is required for sending the information. We would also be happy to handle the notification for you. Please contact us.
What are the costs, fees for companies?
The main cost item is the annual fee, which must be paid by all associations subject to reporting requirements - AG, GmbH, GmbH & Co KG, OHG, foundations, etc. - for maintaining the transparency register. The amount of the fee is regulated by the transparency register fee ordinance (TrGebV).
Who can inspect the transparency register?
In principle, anyone can inspect the transparency register. However, the right to inspect the register is restricted in various ways. For example, a beneficial owner may request that certain data / information not be transmitted to the applicant for inspection. In addition, public authorities, notaries and lawyers, among others, are also entitled to inspect the transparency register.
Do I get to inspect the transparency register with knowledge?
Yes, any beneficial owner may, either by himself or through a representative, submit a request for information on inspections carried out concerning "his" specific association ("legal entity").
Can the inspection of the transparency register be restricted?
Yes, upon request of a beneficial owner, the inspection of the transparency register and the transmission of data can be restricted. The prerequisite is that the beneficial owner demonstrates that there are overriding interests on his or her side that are worthy of protection and that stand in the way of inspection and transmission. Due to the narrow definition of interests worthy of protection by the GWG, the cases in which inspection is restricted (risk of a criminal offense, Section 23 GWG) are limited.
Another possibility of restriction is particularly relevant for (asset-managing) family companies in Germany: Thus, interests of a beneficial owner that are worthy of protection exist if the beneficial owner is a minor or legally incompetent. Cases of foundation beneficiaries are not easy to assess.
How can the transparency register be inspected?
Registration with the transparency register is required for inspection. The method of registration differs for public authorities, companies and natural persons, among others. After registering and logging in on the website of the transparency register, a corresponding request for inspection can be submitted online or a transparency register excerpt can be ordered.
What information can be accessed in the transparency register?
How can an incorrect entry in the transparency register be corrected? By submitting a request for correction?
Yes. Entries that are incorrect, false or have become incorrect due to amendments can be corrected or rectified by notifying the transparency register accordingly.
What is a discrepancy report to the transparency register?
A discrepancy report is a notification by a person obliged under the Money Laundering Act to the transparency register of a detected discrepancy between an entry in the transparency register and the actual circumstances. Obligated persons under the Money Laundering Act (Section 2 GWG) include financial services institutions, credit institutions, public authorities, notaries, lawyers and auditors in Germany. If there is a discrepancy report, the association concerned - i.e. GmbH, AG, GmbH & Co KG, OHG, cooperative, foundation - is usually written to and asked for notification or clarification.
What to do in case of hearing letters from the Federal Administrative Office (BVA)?
The Federal Administrative Office apparently sends out hearing letters ("hearing due to irregularity"), some of which are routine, some of which are occasion-related, and which are accompanied by a statement sheet ("hearing sheet"). Every recipient should take such letters seriously and, if necessary, seek legal advice.
What should I do if I receive a penalty notice from the BVA? Appeal?
In principle, an appeal can be lodged against a penalty notice issued by the BVA for violation of the obligations relating to the transparency register. The proceedings are conducted before the Cologne Local Court.
What are the penalties and fines for violating the reporting obligations for the transparency register?
Anyone who fails to comply with the notification requirements of the Money Laundering Act with regard to the transparency register commits an administrative offense and must expect a fine of up to 100,000 EUR. This fine can increase to up to 5 million EUR or 10% of the total annual turnover achieved in the year preceding the fine decision in the case of serious violations.
How is the fine calculated under german law?
The basis for calculating fines is the Federal Administrative Office's catalog of fines. The Federal Administrative Office (BVA) determines the fines within the framework of penalty notices. In calculating the fines, a basic distinction is made between (a) simple and (b) serious, repeated or systematic violations. For simple violations, the fine range is up to 100,000 EUR, for the other violations up to 1,000,000 EUR.
In the case of simple violations (Section 56 (1) sentence 1 AMLA), the fine is calculated as follows:
- Basic amount ( 200 - 1000 EUR )
- multiplied by factor I (recklessness = 1 / intent = 1.5)
- multiplied by factor II (economic strength = 0,01 - 25)
- muliplied with factor III ((individual fault/assessment criteria) = 0,5 - 4, rule = 3).
#1 Fine Calculation Factor II
The essential factor in the amount of the fine is - as the range shows - the economic strength of the company concerned (e.g. GmbH, AG, GmbH & Co KG, cooperative). The factor itself is generally determined on the basis of the balance sheet total (or in individual cases on the basis of the annual turnover).
Example: If the balance sheet total is between 6 and 20 million EUR - exemplarily 10 million EUR- the factor II is calculated as follows:
1 + ( ( 10.000 .000 - 6.000.000 ) / 12.000.000)
= 1 + ( 4.000.0000 / 12.000.0000)
= 1 + 0,3333
For foundations, the foundation assets are decisive for the factor calculation (this corresponds to the annual balance sheet total of a company). In the case of individuals, the gross annual income and, if applicable, the assets are decisive.
#2 Fine Calculation Factor III
For the calculation and determination of factor III, the catalog of fines usually assumes a factor of 3. This factor is reduced or increased by the circumstances of the individual case. A reduction may be considered, among other things, if precautions are taken to prevent violations of the Money Laundering Act or to ensure compliance with the obligations in connection with the transparency register (compliance management system). However, there is a risk of an increase if the regulations on the transparency register are repeatedly violated.
In addition, there are a number of other reasons why factor III in the calculation of the fine may be increased or reduced. If the BVA has issued a hearing letter or a penalty notice, it is worth taking a closer look at the legal situation. This is the only way to reduce or even avoid fines. Please feel free to call us or send us a message if you have any questions or need assistance.
NOTE: All of the above figures, factors, etc. reflect the status 07/2021. However, the catalog of fines is continuously adjusted, so that the current legal situation must also be checked on an ongoing basis.
Public shaming - publication of penalty notices, commercial central register
It should be noted that the BVA lists the names of the companies against which a penalty notice has been issued on its website. In addition, the type of administrative offense is publicly stated. It is also relevant that in the event of violations of reporting obligations under the Money Laundering Act, companies may also face entries in the commercial central register (Section 149 GewO).