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.
Richard Hoffmann, Lawyer, Ecovis Heidelberg, GermanyWe can answer your questions about the transparency register and take care of registration for you.
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||Others|
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.
For further information please contact:
Richard Hoffmann, Lawyer, Ecovis Heidelberg, Germany
Pingwen Hu, Certified Public Accountant, CPA, ECOVIS Ruide Certified Public Accountants Co., Ltd., Shanghai, China