As we mentioned in our January and March newsletters, Luxembourg has implemented a so-called Register of Beneficial Owners (“RBO”), which went into effect 1 March 2019.
Concerned entities have six months from this date (until 31 August 2019) to submit to the RBO’s administrator the required information and supporting documents regarding their beneficial owner(s). Failure to submit is subject to criminal sanctions.
This requirement, created at the European level by the directive (EU) 2015/849 of the European Parliament and of the Council on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, as amended by the directive (EU) 2018/843, was implemented in Luxembourg by the law of January 13, 2019, creating a register of beneficial owners (the “Law”).
Which entities are concerned?
The Law applies to all entities registered with the Luxembourg Trade and Companies Register, with the exception of individual retailers. This includes, among others, all commercial companies (regardless of their corporate form), special limited partnerships (“sociétés en commandite spéciales”), mutual funds, economic interest groups and Luxembourg branches of foreign entities.
What is a beneficial owner?
A “beneficial owner” (“BO”) under the Law includes any natural person who ultimately owns or controls the concerned entity on the basis of a direct or indirect capital holding threshold in the concerned entity (set, merely as indicative, at 25% plus one share) or in some other way. In the event in which no natural person can be identified on the basis of this ownership criterion, any natural person who holds the position of senior manager (“dirigeant principal”) of the concerned entity shall be identified as a BO.
What information shall be submitted or retained?
Each concerned entity (or its proxy) shall submit to the RBO’s administrator the information listed below and update such information as needed:
(i) name and surname of the BO(s);
(ii) date and place of birth of the BO(s);
(iii) nationality of the BO(s);
(iv) country of residence of the BO(s);
(v) private or professional address of the BO(s);
(vi) national identification number of the BO(s); and
(vii) nature and extent of the effective interests held by the BO(s).
Furthermore, each entity shall keep at its registered office, in a file, the information regarding its BO(s) together with the supporting documents.
It should be noted that the Law requires the BO(s) to cooperate with the concerned entities by providing them with all the necessary information (here again, subject to criminal sanctions).
Who will have access to the RBO?
All the information submitted to and filed with the RBO will be accessible by the national authorities and also by the general public, with the exception of the private or professional address and the national identification number. This information will be made available on the RBO’s website free of charge.
It should be noted that the Law allows for the request, on a case-by-case basis and in exceptional circumstances listed under the Law, of a restriction to the general public’s access to the information contained in the RBO. This includes cases in which this access would expose the BO to a disproportionate risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation or when the BO is a minor in age or otherwise incapacitated. The RBO’s administrator will review these requests for restriction and evaluate the reality and the relevance of the risks invoked to support such requests.
What are the sanctions for non-compliance?
Failure to fulfil the obligations described above will be subject to criminal penalties of up to 1,250,000 euros.
What are the current steps to be taken?
For the concerned entities that are domiciliated, the domiciliation agent should certainly be able to take care of the filing with the RBO. We advise you to contact your agent as soon as possible.