Foreign entities must now report ownership of German property
Previously, foreign companies were obliged to register only when they acquired property, either through an asset or share deal. The new Act's measures extend this to existing property, introduced because the government realised that only a few real-estate holding companies are registered in the transparency register. In Berlin, the figure is less than 30 per cent. Moreover, searches in German land registries (Grundbücher) regularly lead to dead ends as company-related changes such as change of name, mergers and acquisitions are often not reported to the land registry offices.
The deadline for registration of pre-existing property interests on the transparency register is 31 June 2023. Foreign associations already registered in a transparency register of another EU Member State are exempt.
The register holds details of companies' ultimate beneficial owners (UBOs), meaning all natural persons who directly or indirectly hold more than 25 per cent of the shares, control more than 25 per cent of the voting rights or control companies in a comparable manner. If no such person can be identified, the UBO is deemed to be the company's legal representative or the managing partner.
As of January 2023, newly established companies nominating a legal representative or partner have to indicate whether no individual fulfils the requirements to be UBO or if the company does not have enough information to identify a real UBO. From 2024, this will also apply to all civil-law associations on registration. This new reporting obligation is intended to put financial institutions in a better position to take a risk-adequate approach to the unknown UBO situation.
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