Transparenzregister: What is the Transparency Register?

Contents

What is the Transparenzregister?

The transparency register requires most companies in Germany to report specific data (mainly the disclosure the beneficial owners i.e., natural persons) to expose their structure, ownership, oversight and cash flows.

Before 31 July 2021, entry into the register was only mandatory if a company or its beneficial owners didn’t already appear in another registry (known as the Mitteilungsfiktion, or ‘notification fiction’). A beneficial owner, in this context, is a person who either owns more than 25% of the company’s capital or has over 25% of its voting rights.

The Transparency Register was introduced in 2017 to implement the EU Directive on Money Laundering (2015/849). The Federal Ministry of Finance appointed the Bundesanzeiger Verlag GmbH as the registering authority.

Who has to register with the Transparenzregister?

As of 1 August 2021, all companies (repeat: all companies and not just new ones) have to report to the Transparency Register.

The registration process involves transmitting select company data (first and last name, date of birth, place of residence, type and scope of financial interest and nationality of the beneficial owners) to the transparency register.

Any changes to the data must be reported or updated via the portal immediately.

The legal representatives of the companies (UG managing directors, GmbH managing directors, AG board of directors) are responsible for reporting the data to the register.

What type of businesses must report to the Transparenzregister?

The obligation to register applies to the following companies as of August 2021:

• Legal entities under private law
  • UG (haftungsbeschränkt)
  • GmbH
  • AG (stock companies)
  • Eingetragene Vereine (registered associations)
  • Rechtsfähige Stiftungen (foundations with legal capacity)
  • and others
• Registered partnerships
  • KG
  • OHG
  • PartG
  • and others
• Nichtrechtsfähige Stiftungen und Trusts (Non-legal foundations & trusts)

A foundation without legal capacity (non-legal entity) has to register if its purpose is self-serving for its founder (eg, not charitable). The same goes for trusts and other comparable legal structures.

How do I register with the Transparenzregister?

Registration with the transparency register is a two-step process that happens online at transparenzregister.de.

The first step is to complete the Basis-Registrierung (basic registration). Click on the “Register now” button and fill in the form. Then look out for a confirmation email. Make sure you confirm the basic registration within 24 hours.

The second step is the Erweiterte Registrierung (advanced registration). Using the functionalities in the user account is only possible once the company has completed the advanced registration. At this point, beneficial owners can make entries and request to inspect the register.

To take the next step, log in to the Transparency Register with your info from the basic registration and switch the language to English at the top on the right-hand side. Hit the “Open advanced registration” button and follow the prompts.

Once the advanced registration is successful, go to “My data” and select whether you wish to register beneficial owners or inspect the Transparency Register – and then complete the respective forms.

Transitional periods for registration

Most companies formed before 1 August 2021 have a transitional period to comply with the reporting obligation under the Money Laundering Act (Section 59 (8) AMLA).

If registration happens within this period, the company avoids infringement fines.

Discrepancy reports for false and missing data

If the data in the register entry is not correct or up-to-date, the company must file an electronic discrepancy report. However, filing a discrepancy report is only possible if the company or foundation has previously registered online.

Discrepancies exist, for example, if the data of beneficial owners differ from the information in the transparency register or are missing. The truthful disclosure of data also refers to personal circumstances such as the nationality, date of birth or address of a beneficial owner.

The legislation is under the Bundesverwaltungsamt’s (Federal Office of Administration) jurisdiction, including penalties for late, false or incomplete information.

Fines for false and missing information

It’s great that you’re educating yourself about the Transparency Register because there are sanctions for violating your registration or reporting obligations or for failure to correct a discrepancy. As always, ignorance of the law is not a defence.

For minor infringements, the fine is up to €100,000. For more serious violations or repeat offences, penalties can be as high as €1M. Insurance or capital management companies that violate their obligations face fines of up to €5M. Alternatively, the legislator can demand 10% of the previous year’s turnover of an infringing company.

Inspection of the Transparenzregister

Inspecting the register makes it possible to get a lot of information about a company. However, due to the sensitive nature of the data, powers to inspect and obtain information are strictly limited.

All authorities have permission to access the data they need to fulfil their duties. Companies listed in the transparency register can only access other companies’ data for due diligence reasons. Members of the public must show ‘grounds of legitimate interest’ (ie, a justified reason) to inspect the register.

Transparenzregister costs

Registration and notifications to the register-keeping body are free of charge. But, a low annual fee of €4.80 plus VAT for maintaining the entry applies.

Companies that would have been obliged to register in the past must pay the annual fee retroactively from 2017. For 2017, the cost is €1.25, for 2018 and 2019 €2.50, in each case excluding VAT.

Who can apply for a fee exemption?

Since 2020, non-profit associations can apply for exemption from entry in the transparency register and its costs. This fee exemption is granted only by application by the organisation.

When applying, the association must prove its non-profit status via activities that promote an overall religious or ethical purpose (§§ 52-58 AO). However, this is a standard part of forming a non-profit association so it should be a straightforward this to do.

Regulations on fees and costs are in the Transparenzregistergebührenverordnung (transparency register fees ordinance).

Note: This is one of many registrations you have to take care of when starting a company. Want to know everything else that’s involved? 

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