Germany’s Transparency Register and Financial Information Act (TraFinG, "Transparenzregister- und Finanzinformationsgesetz") came into effect on August 1, 2021. The Act is in line with the German government’s efforts to combat financial crimes such as money laundering and terrorism financing by requiring companies that do business within its borders full transparency into who ultimately owns and controls them. While a register of beneficial owners for German private legal entities and registered partnerships has existed since 2017, the TraFinG expands its reach.
Under the previous rule, a filing exemption was provided if the necessary information on beneficial owners was already filed in certain public registers in Germany. The new rule now removes that exemption and requires that all listed companies, companies/entities with their registered office in Germany, and registered partnerships in Germany file details directly with the transparency register and maintain updated information by submitting changes as they happen. In addition, the Act also expands the reporting requirements for foreign purchasers of German real estate and for foreign trusts.
It is important to note that a company’s obligation to report to the transparency register does not remove its obligation to submit the required information to other relevant public registers. All other registers must also be kept up to date.
Newly established entities must submit beneficial ownership details upon registration. Existing companies (those registered before August 1st, 2021) will need to submit all details by the following deadlines:
- March 31st, 2022
- AG, SE, KGaA, etc. (stock corporations, European companies, partnerships limited by shares, etc.)
- June 30th, 2022
- GmbH, eG, SCE (limited liability companies, cooperatives, European cooperatives)
- registered partnerships
- December 31st, 2022
- all other entities
Companies failing to comply with TraFinG’s reporting requirements may incur fines of up to EUR 150,000. These can increase to EUR 1 million or 2x the economic benefit stemming from non-compliance in case of serious or repeated offenses. Financial services providers may incur fines of EUR 5 million or 10% of their total sales.
For more information on complying with Germany’s beneficial ownership requirements and ensuring the compliance of your international entities, contact a CT representative at (844) 322-6993 (toll-free U.S.).
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