The Grand-Duchy of Luxembourg has introduced a Beneficial Owners Register, in French, Registre des Beneficiaires Effectifs ("RBE"). The law implementing the RBE was enacted on 13th January 2019 and published in the Luxembourg Official Gazette on 15th January 2019 (the "RBE Law").
There will be a requirement to notify the Luxembourg Business Registers ("LBR") of the identity of all beneficial owners/controllers (the "BO/BOs") of Luxembourg entities registered with the Luxembourg Trade and Companies Register (the "Entity/Entities") and to provide the LBR with supporting documents.
Who has access to the RBE?
The BOs information collected by the LBR will be available to the Luxembourg authorities, administrations and regulators as detailed in the RBE Law and the public.
The access for the public will be restricted: BOs' address and identification number will not be disclosed.
The Entities or the BOs will have the possibility to request for a restriction of access in specific circumstances as detailed in the RBE Law: exposition of the BOs to a disproportionate risk, a risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation, or where the BOs are minors or incapable persons.
What action is required?
The RBE Law will enter into force the first day of the second month following the month of its publication in the Luxembourg Official Gazette, i.e. 1 March 2019.
Every Entity will be required to set up an internal file with the following BOs information:
- First names
- Date and place of birth
- Country of residence
- Exact private or professional address
- Identification number
- Nature and extent of the interests held (for companies listed on a regulated market and meeting the criteria set up by the RBE Law, only the name of the regulated market will be disclosed)
- The documents required by the RBE Law (the "BOs Information")
This internal file will be kept at the Entity's registered office. Every entity will also have to register the BO's information to declare its current beneficial ownership and control within one month after its registration (a transitional period of six months was originally granted to existing entities, i.e. until 31 August 2019). However, the LBR has extended this deadline to 30 November 2019.
Following this registration, the LBR must be notified by the Entity of any subsequent changes to the BOs information within one month after the Entity has become aware or should have become aware of the change. Registrations and declarations to the RBE will be exempted from administrative fees up until 31 August 2019.
The RBE Law will also set up an obligation towards the BOs to communicate to the Entities the BOs information in order for the Entities to comply with the obligations under the RBE Law. The following actions/inactions are criminal offences sanctioned by a fine ranging between EUR 1,250 and EUR 1,250,000:
- non-submission of the notification of change;
- filing of inexact, incomplete or outdated BOs Information;
- non-set up of the internal file;
- provision of inexact or outdated BOs information to the national authorities and to the entities subject to the law of 12th November 2004 on the fight against money laundering and terrorist financing, as subsequently amended (the "AML Law'); and
- non-provision by the BOs of the BOs Information to the Entities.
Who is a beneficial owner and controller?
The RBE Law refers to the definition of BO of the AML Law. In summary, the principles are as follows:
- "any natural person who ultimately owns or controls a legal entity through direct or indirect ownership of a sufficient percentage of the shares or voting rights or ownership interest in that entity (...]";
- "if, after having exhausted all possible means and provided there are no grounds for suspicion, no person under [the above point] is identified, or if there is any doubt that the person(s) identified are the beneficial owner(s), any natural person who holds the position of senior [managing official]". Specific rules apply to trusts and foundations as explained in the AML Law.
The list of BOs documents to be filed with the LBR, the LBR electronic registration formalities, the RBE access requests formalities and the LBR registration costs will be detailed in a Grand-Ducal Regulation.
What actions have Ocorian undertaken?
Ocorian have experience in meeting similar requirements introduced by the United Kingdom and Jersey to maintain similar registers. Consequently, we currently have in place an effective operating model in which we are able to anticipate similar requirements in all jurisdictions where we have a presence, which includes Luxembourg.
Our compliance and client teams are currently assessing all the RBE Law dispositions to ensure that Entities under our administration will be compliant with the new legislation. As part of this process, our teams are reviewing the ownership and control of the Entities under our administration and will be providing the required information to the LBR in accordance with these requirements.
Following the introduction of new legislation of this nature there are likely to be additional costs for the Entities. We are actively developing an impact assessment (which includes this notification to clients) to ensure the cost of compliance is kept as low as possible.
In the meantime, if you have any questions or concerns relating to this briefing, please speak to your usual Ocorian point of contact or reach out to one of our contacts.