Entities registered with the Register of Commerce and Companies in Luxembourg must provide information on their beneficial owners, or risk large fines.
1 March 2019 sees Luxembourg's Ultimate Beneficial Owner (UBO) Register Law come into effect, and entities in the country must disclose their relevant beneficial owner information in order to be compliant.
The Law, passed by Luxembourg's parliament in late 2018, is in line with the legislation of other European Union member states, and adheres to the 4th Anti-Money laundering (AML) Directive which requires them to maintain a central UBO register. Similar initiatives exist outside of the EU – for example the Register of Registrable Controllers in Singapore, the UBO Register in the Cayman Islands or UBO Database (BOSS) in the British Virgin Islands. All of these registers are designed to contribute to global government efforts to increase financial and business transparency.
Following is the key information for Luxembourg entities. Have questions or need clarifications on the UBO Register, and what you need to do? Simply get in touch with our local experts.
Who is affected by the Luxembourg UBO Register Law?
Any Luxembourg-based corporate entity and other legal entities registered with the trade and companies register, including the Luxembourg branches of foreign entities and listed companies, or legal and fiduciary arrangements – such as trust, foundations and similar arrangements – fall under the UBO Register Law and must comply.
How is the register going to operate?
The Luxembourg UBO register (registre des bénéficiaires effectifs - RBE) will be maintained by the Luxembourg trade and business register (RCSL) and supervised by the Ministry of Justice.
What do I need to do and when?
The Law passed on 18 December 2018 and comes into force on 1 March 2019. Concerned companies have six months from this date to comply with the provisions, so until 1 September 2019.
Compliance requires companies/entities to do the following:
- Collect and hold for a period of 5 years adequate internal UBO files at their registered office, including all underlying supporting documentation. The files should include the name, private or professional address, identification number, nationality, place/date of birth and the nature and extent of the interest the beneficial owner holds and a mention of where the information is being kept.
- Provide this information to the RBE electronically, within one month of incorporation of an entity or within one month following a relevant change.
Who will be able to access the UBO information?
The following parties shall have access to the RBE.
- Certain "obliged entities" (including banks and professionals of the financial sector), within the framework of their customer due diligence.
- Any person or organisation that can demonstrate a legitimate interest.
Aside from the UBO's address and the identity number, their information will be also accessible by the general public. However, under certain limited circumstances decided upon request and on a case-by-case basis, public access can be limited or restricted. Cases may include those that involve exposure to fraud, kidnapping, blackmail, extortion, harassment, violence and/or intimidation. Also where the UBO is a minor or otherwise incapable.
Any information filed with the RBE will be fully available to other national authorities (the public prosecutor, CSSF, Commissariat aux assurances, tax administration and so on). National authorities can request UBO information without the UBO needing to be informed.
Member States are also required to exchange UBO information among jurisdictions and between financial intelligence units. This exchange happens automatically based on certain indicators and on request.
What if I don't comply with Luxembourg's UBO Register Law?
Non-compliance may lead to a fine of between €1,250.00 and €1,250,000.00, so it is strongly recommended that entities:
- Register with the RBE within the required timeframe
- Take care to provide complete, correct and up-to-date information
- Obtain and keep adequate BO information at their registered office as required.
Talk to us
TMF Luxembourg can help to ensure your UBOs are determined and informed, that all files are complete and all relevant documents are both provided to the RBE and held at the registered office of your Luxembourg company, in accordance with the new law.
Need more information? Contact us today.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.