The law creating a Register of Beneficial Owners of Luxembourg entities was published on 15 January 2019 (the “Law”).
The Law provides an obligation for Luxembourg entities to gather and register information about their beneficial owners in the Luxembourg Register of Beneficial Owners (the “BO Register”).
Who is concerned?
Luxembourg companies, investment funds as well as registered branches of foreign companies (the “Registered Entities”).
Who is considered as a beneficial owner (“Beneficial Owner”)?
The Law refers to the Luxembourg law of 12 November 2004 on the fight against money laundering and terrorism financing for the definition of Beneficial Owner. For this purpose, the Beneficial Owner is any individual who ultimately owns or controls a legal entity through direct or indirect ownership of a sufficient percentage of shares or voting rights (including bearer shares) in a company.
A direct or indirect participation of 25% or more is considered as the indicative threshold for client identification purposes.
In the absence of an identifiable Beneficial Owner, the top director of the Registered Entity is considered as being the Beneficial Owner.
Which information should be included in the BO Register?
The BO Register must contain the following information about Beneficial Owner(s):
According to the Law, Registered Entities are charged with the obligation to gather and register the information above with the BO Register; Registered Entities are also charged with the obligation to register any applicable modification. Further, Luxembourg notaries may also request registrations or modifications to the BO Register.
How should the Beneficial Owner’s information be filed with the BO Register?
The information about the Beneficial Owner must be filed electronically through the website of the Luxembourg Business Register. The registration must be effected within one month from the moment the entity concerned was aware (or should have been aware) of the event requiring registration.
Who can access the BO Register?
Following the provisions of the Directive 2018/843, the Law provides that any person may request access to the BO Register. However, the information available to the public will not include the address and the national ID number of the Beneficial Owner. Only Luxembourg national authorities (notably the general prosecutor, investigating judges and tax authorities) will have full access to the information contained in the BO Register.
Further instructions on filing formalities and access to the BO Register as well as the search criteria will be provided through an upcoming Grand Ducal Regulation. In this respect, a currently available draft of this regulation indicates that registrations will have to be made in French, German or Luxembourguish; the search criteria for the public will be the name or the RCS identification number of the Luxembourg entity.
It is worth noting that a Registered Entity may file a request to limit access to its Beneficial Owner’s information to Luxembourg national authorities only, in cases where public access may expose the Beneficial Owner to a significant risk of fraud, kidnapping, blackmailing, extortion, harassment, violence or intimidation or when the Beneficial Owner is a minor or disabled person. These requests will be evaluated on a case-by-case basis and the restriction would be granted only under exceptional circumstances.
Which obligations are imposed on the Registered Entity and the Beneficial Owner?
The Registered Entity will be bound to secure and store information about its Beneficial Owners in its registered office. The information will have to be actual and up-to-date.
The Beneficial Owner will be bound to provide his/her information above to the Registered Entity.
What are the penalties in case of non-compliance?
Registered Entities are subject to a fine between EUR 1,250 and EUR 1,250,000 for the omission to register information of a Beneficial Owner; for registering inaccurate, incomplete or out dated information as well as for missing to keep the relevant supporting information at the entity’s registered office.
The Beneficial Owner is subject to a fine between EUR 1,250 and EUR 1,250,000 for failing to provide the information required by the Law to the Registered Entity.
When will the Law enter into force?
The Law that creates the BO Register will enter into force on 1 March 2019. Registered Companies will have a period of 6 months to comply with their new obligations (i.e., up to 1 September 2019).
How can we assist?
Buren Luxembourg can assist you with any question regarding the new obligations imposed by the Law. Among others, we can assist you with the Beneficial Owner identification process; with filing or amending Beneficial Owners information with the BO Register; and also requesting restricted access to a Beneficial Owner’s information.
