Proposed changes to information held on UBOs of Swiss entities are being considered in the light of UBO registration rules elsewhere. Jurgen Borgt, managing director, and Claudio Fanger, director of client services, Intertrust Switzerland, look at the potential implications.
Swiss authorities are considering a new law that may require entities in Switzerland to declare their ultimate beneficial owner (UBO) on a central register. The new UBO register would, if implemented, be available to the relevant Swiss authorities but not to the public.
Currently, UBO information must be logged by Swiss companies themselves or with a company’s service provider, who keeps it on file to comply with existing legal duties, as explained in our earlier article. The possible changes would mean that this information would also be held on a central register, but this would not be available to the public. Nor are there any indications that a public register of UBOs would be required in Switzerland in the future.
Early indications suggest that debate around the new UBO register may move forward in the second half of 2023—but it will be some time before there is a consensus on whether such regulations will be put in place. Nonetheless, companies should keep their existing UBO reporting obligations constantly up to date and subject to the occasional review.
The move by the Swiss authorities to consider what needs to be done is part of a wider regulatory trend for data collection and transparency. This alignment is important for Switzerland to maintain its standing and reputation as a well-regulated jurisdiction.
This tentative move towards greater transparency aligns with what has already been happening in the EU and further afield, and includes discussions about data being made (fully) accessible.
There is also a possibility that existing AML regulations may be extended to cover professions such as lawyers and notaries. Currently, as in many jurisdictions, lawyers tend to be excluded from this type of legislation because of the confidential nature of their business.
This is also part of an ongoing discussion within the Financial Action Task Force which we are monitoring closely.
If you work with one, your service provider may already hold the information needed.
Although most larger companies are likely to have an existing UBO register in place, this may not be the case for smaller companies and SMEs.
These companies may be owned by one or two individuals and may not even have a shareholders’ register. To maintain good corporate practice they should draw up a register, even if it is the case that shares have only been issued to one or two people.
Many of our clients have intermediate companies. For example, a company in Luxembourg or the Netherlands could be a shareholder and be included in the shareholders’ register, while the overall owner might be a larger corporation somewhere else in the world, or an individual or individuals, or family. These owners must be entered into the UBO register.