UBO – Reporting Obligations in Spain: Practical Tips for Companies

Spanish regulations on the identification and registration of Ultimate Beneficial Owners (UBOs) have been significantly tightened in recent years. The aim is to create greater transparency in the fight against money laundering and terrorist financing. Foreign companies operating in Spain or running a subsidiary there must take note of a couple of special requirements.

Who is considered a UBO?

Under Spanish law, a UBO is any natural person who, directly or indirectly, holds more than 25% of the company shares or voting rights or otherwise exercises control over the company (e.g. through voting agreements). If no person meets these criteria, the members of the management body are considered to be ‘equivalent beneficial owners’ (‘titulares reales asimilados’).

What needs to be reported and when?

Companies must provide UBO information:

• within one month of incorporation,
• in the event of relevant changes (e.g. change of shareholders, change in the company body, relocation of the registered office – in these cases information must be provided to the commercial register or the tax authority within one month in each case),
• as well as annually as part of the annual financial statements.

Which information is required?

The affected companies are required to provide the following information for each beneficial owner:

• full name,
• date of birth,
• Type and number of identity card/passport,
• nationality,
• country of residence,
• Justification of UBO status (e.g. level of shareholding, control rights) and details of the shareholder chain.

Rights of access and information: law and practice

The UBO register is not a public register. Access rights are granted in particular to authorities, law enforcement agencies, notaries and, under certain conditions, third parties with a ‘legitimate interest’. In our opinion, this would also include lawyers, e.g. in the context of due diligence checks, but in administrative practice, such access is regularly denied. Companies should therefore request UBO data early on and directly from their contractual parties.

Consequences of non-compliance

Failure to report or late reporting is strictly penalised in Spain: in addition to substantial fines, temporary restrictions on activities and even the removal of management are possible.

Practical information

Companies with links to Spain should adapt their internal processes to ensure that all UBO information is recorded correctly and in a timely manner, continuously updated, and kept on file for at least ten years.

For further information or personalised assistance, DAUSS Abogados is always at your disposal.

Do you have questions about the Money Laundering Prevention Act in Spain? Please feel free to contact us!

Nathalie Kühlmann

info@dauss.es