In recent years, it has become increasingly common for companies to come under the ownership of asset management foundations. Not only public-interest asset management foundations, but also non-public-interest asset management foundations (NPAMFs) have become significant players in corporate structures. This development naturally raises numerous legal and tax issues – one of the most important of which is transparency.
Why Is Transparency Important?
The Act CXCVI of 2011 on National Assets (Nvtv.) clearly stipulates that an organization is considered transparent if:
- its ownership structure and ultimate beneficial owners are identifiable;
- its tax residency is in a country compliant with EU/OECD standards, or it has a double taxation treaty with Hungary;
- it does not qualify as a Controlled Foreign Corporation (CFC);
- and in the case of any owner holding more than 25% interest, these conditions are also fulfilled.
Thus, transparency is not merely a formal requirement but also a matter of security and reputation: for authorities, partners, and financial institutions, it is crucial that an organization’s structure and its actual controllers are clearly visible.
What Happens When a Company Is Owned by a Foundation?
When a business company becomes the exclusive property of a non-public-interest asset management foundation, the immediate question may arise: does this structure still meet the transparency requirements? The answer is yes, it does.
- The foundation will be recorded as the owner in the company register, making the ownership structure identifiable.
- The Anti-Money Laundering Act (Pmt.) clearly defines who qualifies as the beneficial owner of a foundation: the beneficiaries and the members of the board of trustees. These individuals are registered as beneficial owners in banking records.
- Although the ownership structure of a foundation cannot be interpreted in the “classical” sense, the ultimate beneficial ownership can still be identified.
This means that even if a company is placed under foundation ownership, it will be considered a transparent organization.
Trust-Based Asset Management Perspective
At SINE QUA NON TRUST Vagyonkezelő Zrt., our professional trust asset management company, we often encounter situations where transparency requirements may seem to conflict with the settlor’s intentions. Frequently, a settlor establishes a foundation or appoints a trustee precisely to remain in the “background”. Nevertheless, the legal framework is clear: transparency obligations cannot be avoided. This is not necessarily a disadvantage. On the contrary, a transparent ownership structure builds confidence in banking, business, and regulatory relationships, reduces the risk of disputes and administrative proceedings, and provides a more stable operational framework over the long term.
The transfer of assets into a trust-based asset management arrangement or an asset management foundation is an increasingly realistic alternative for both family and corporate structures. Compliance with transparency rules is not only a legal obligation but can also represent a strategic advantage.
As professional trust managers, we observe daily that well-structured, transparent asset management arrangements provide clients with the security and peace of mind that are essential for the long-term preservation of wealth.
