Central register of beneficial owners of companies and legal entities

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Central register of beneficial owners of companies and legal entities

28.02.2019 | LPEA AML Working Group

On 18 December 2018 the Luxembourg Parliament adopted the law creating a central register of beneficial owners (BO) of companies and legal entities (the Law), which implements Directive EU 2015/849. This publication summarises future obligations to be met, and potential penalties in case of non-compliance.

Creation of a Register of Beneficial Owners

The register of BOs (the RBE) will be managed by the economic interest grouping “Luxembourg Business Registers”, which also maintains the Luxembourg Trade and Companies Register (RCSL). The RBE manager will maintain information on the BO of nearly all entities registered in Luxembourg, notably  SA, SCA, SARL, SCS, SCSp, SE, SNC, GIE, SAS, SC, FCP and Luxembourg branches created by foreign entities and associations (the Concerned Entities).

Information concerning registration of information via the website of the RBE manager has been detailed by a Grand Ducal Regulation of 15 February 2019.

Information to be registered with the RBE

A BO is to be considered as a natural person who ultimately owns or controls a Concerned Entity or for whom a transaction is executed or an activity realised. A direct or indirect shareholding of more than 25% held by a natural person in a Concerned Entity is an indication that the ownership criterion is met. To the extent no such person exists, or if it is uncertain whether the persons identified are the BOs, the person(s) holding senior managerial positions (dirigeant principal) in the Concerned Entities are considered as BO and must be recorded accordingly.

The following information will have to be registered for each BO: the identity (name, first name, nationality, date and place of birth, country of residence, professional or personal address, official identification number), as well as the nature and extent of beneficial interests held.

Entities listed on a regulated market that fulfils certain transparency requirements will only need to register the name of the market on which their shares are traded.

According to the Grand Ducal Regulation of 15 February 2019, the supporting documents that must be submitted together with the filing include: (i) official documents enabling to identify the BO (e.g., copy of an ID card or passport), (ii) if relevant, a request to limit the access to the information available in the RBE, and (iii) if relevant, evidence that the Concerned Entity is listed on a regulated market that fulfils certain transparency conditions

Maintenance of a BO file at the entity’s registered office

Concerned Entities must keep an up-to-date BO file at their registered office, containing the same information as that which has been filed with the RBE. These files must be maintained at a Luxembourg address indicated in the liquidation  deed for a period of five years after the Concerned Entity’s liquidation. The information and supporting documents will be kept in the RBE until a period of five years after the date on which the Concerned Entity has been removed from the RCSL (e.g., because it has been dissolved).

Timing for the registration of the BO information with the RBE

All Concerned Entities will have six months from the entry into force of the Law (i.e., six months as of 1 March 2019) to comply with the registration obligations.

Any change to the BO information must be registered with the RBE within one month from the date the change was known or should have been known by the entity.

The Law imposes sanctions for non-compliance with obligations. Any lack of or late filing, non-compliance with the BO file preservation obligation, and any deliberately wrong, incomplete or non-updated filing will be sanctioned by criminal fines ranging from EUR 1,250 to EUR 1,250,000 which can be imposed on non-compliant Concerned Entities. Non-compliance can also be reported by the RBE manager to the Luxembourg prosecutor’s office. A BO that does not comply with its obligation to cooperate with the Concerned Entity so that the latter may comply with its own obligations may also receive a criminal fine ranging from EUR 1,250 to EUR 1,250,000.

Access to the RBE

The RBE will be accessible to the public, with the exception of the following information: the personal or professional address and national identification number.

Important Disclaimer: Although care has been taken when compiling this summary, the LPEA does not accept any responsibility whatsoever for any consequence arising from the information in this publication or the use thereof. The information provided in this publication is intended for general informational purposes and is not meant, and cannot be considered, as advice.