Pursuant to an EU directive, Luxembourg has established a Register of Beneficial Owners in use from 1 March 2019, where all companies registered in the Luxembourg Trade and Companies Register must file the details of their beneficial owners. Here’s everything you need to know.
What is the Register of Beneficial Owners for?
To more effectively combat money laundering, tax evasion and the financing of terrorism, the European Parliament amended Directive (EU) 2015/849 as of 30 May 2018 to require each Member State to establish a register of beneficial owners.
In Luxembourg, this directive was transposed into national law by the Law of 13 January 2019, which came into force on 1 March 2019. Thus, all Luxembourg companies registered in the Luxembourg Trade and Companies Register (the RCS, French: registre de commerce et des sociétés) are legally required to file details of all of their beneficial owners with the Register of Beneficial Owners (the RBE, French: registre de bénéficiares effectifs).
The only exceptions to this requirement are for sole traders, temporary commercial companies (sociétés commerciales momentanées) and joint ventures (sociétés commerciales en participation). If your legal entity is registered in the RCS and does not fall into one of these three categories, you are required to register its beneficial owners.
What is a beneficial owner?
A beneficial owner is:
- any natural person who ultimately owns or controls the legal entity, or
- any natural person for whom a transaction is executed or an activity is carried out.
In essence, this means any natural person who directly or indirectly holds a sufficient equity interest, or percentage of shares or voting rights, to effectively own or control the company in question.
For various reasons, it may be impossible to identify any beneficial owners, in which case the main executives of the entity registered in the RCS should also be registered in the RBE.
What information is required?
The following information must be filed with the RBE for each beneficial owner:
- full name
- date and place of birth
- country of residence
- private or business address
- personal national identification number in Luxembourg or with a foreign registry
- nature and scope of the real interests held (e.g. shares held in the company).
All of the information registered in the RBE can be accessed by government authorities in the context of their professional duties. With the exception of addresses and ID numbers, it can also be accessed by the general public.
All of the information registered in the RBE can be accessed by government authorities in the context of their professional duties. With the exception of private and business addresses, as well as Luxembourg or foreign ID numbers, it can also be accessed by the general public. This data can be viewed online, free of charge.
It is possible to restrict access to data on beneficial owners to government authorities, lending institutions, financial institutions, bailiffs and notaries. Any such restriction must be temporary and appropriately justified by specific circumstances stipulated in article 15 of the Law of 13 January 2019 (for example, if the beneficial owner is a minor or if there is a disproportionate risk of harassment or extortion).
How should I proceed?
Registering beneficial owners in the RBE is simple, and can be done online with the help of your LuxTrust certificate. You will have to fill out a form, and potentially attach some required documentation if one of the following cases applies.
- If the individual being registered does not have a national identification number in Luxembourg, you will have to provide both their foreign ID number and a copy of an official document that can be used to verify their identity.
- If shares in the entity are listed for trading on a regulated market, a document proving this is required.
- If you want to restrict access to information about specific beneficial owners, your request must be adequately justified (see above).
Each registration incurs a fee based on a statutory fee schedule. You will receive confirmation of your filing with the RBE within three business days.
Bear in mind that you only have one month to register the beneficial owners of your company. If there is any change in beneficial ownership, you are also given one month to amend the registration in the RBE, starting from when the company became aware of the change (or should have become aware of it).
You are required to retain all of the information and supporting documents on your beneficial owners at your company’s registered office.
We would also add that you are required to retain all of the information and supporting documents on your beneficial owners at your company’s registered office. Even if you cease operations, you will have to retain it all for five years from the date of your company’s deregistration from the RCS.
What penalties apply?
Statutory sanctions ranging from €1,250 to €1,250,000 apply to any entity registered in the RCS that does not submit a filing with the RBE to register its beneficial owners, or that submits information that is false, incomplete or out of date. In addition, the law specifies that the beneficial owners themselves are subject to the same penalties if they fail to provide the information requested by their registered entity for the purpose of meeting the RBE registration obligation.