The Luxembourg Law of 13 January 2019 (RBE Law) providing for the setting-up of a register of beneficial owners of Luxembourg legal entities (Registre des bénéficiaires effectifs or RBE) was published in the Luxembourg official gazette on 15 January 2019.
The RBE Law transposed into Luxembourg law article 30 of Directive (EU) 2015/849 (known as the 4th AML Directive) as amended by Directive (EU) 2018/843 (known as the 5th AML Directive) on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing.
The RBE Law entered into force on 1 March 2019 with a six month transitional period provided to the entities concerned so as to require them to comply with the requirements of the RBE Law by 1 September 2019.
The RBE is a central register containing information on the beneficial owners of Luxembourg legal entities and is managed by the Luxembourg Trade and Companies Registry as a separate register.
All entities registered with the Luxembourg Trade and Companies Register are subject to the RBE Law. This includes listed entities (but see further on this below), investment funds (including common funds (FCPs)) and Luxembourg branches of foreign companies.
The definition of “beneficial owner” in the RBE Law is the one included in the law of 12 November 2004 on the fight against money laundering and terrorist financing as in force (the AML Law).
Under the AML Law, a beneficial owner is any natural person who ultimately owns or controls the entity and/or the natural person on whose behalf a transaction or activity is being conducted.
In relation to corporate entities, a beneficial owner is a natural person who ultimately holds or controls an entity by virtue of owning directly or indirectly a sufficient percentage of the shares, voting rights or capital in the entity, including by means of bearer shareholdings or control by other means but excluding where held through certain listed entities. A percentage of over 25 per cent is considered to be sufficient.
If, after having exhausted all possible means and provided there are no grounds for suspicion, no beneficial owner of a corporate entity can be identified, or if there is any doubt that the person(s) identified are the beneficial owner(s), then any natural person who holds the position of senior managing official (dirigeant principal) of the entity will be treated as the beneficial owner.
Where a controlling interest is held through fiduciary arrangements and trusts, the settlor, the fiduciary agent or trustee, the protector (if any), the beneficiaries or, if beneficiaries have not been designated, the category of natural persons in whose main interest the legal arrangement or legal entity is set up or operates, and any other person exercising effective control over the fiduciary arrangement or the trust by means of direct or indirect ownership or by any other means, should be considered as being beneficial owner(s).
Regarding foundations, any natural person who holds functions equivalent or similar to those regarding fiduciary arrangements and trusts should be considered as being beneficial owner(s).
Obligations of the entities concerned
An entity within the scope of the RBE Law (but excluding certain listed entities) is required to:
- obtain and hold adequate, accurate and up-to-date information on its beneficial owners and to continue to do so for a period of five years after its winding-up, such information being:
- personal details of the beneficial owner including the name, nationality, place and date of birth, country of residence, private or professional address, identification number; and
- the nature and extent of the beneficial interests;
- upload electronically such information (and any subsequent modification) on to the RBE within one month from the date it learnt or should have learnt of the event giving rise to the requirement to submit the information; and
- within three days of receiving a request, provide information on the beneficial owner(s) to national authorities and to self-regulated bodies and professionals subject to the AML Law such as lawyers, notaries, financial sector professionals, within the framework of their customer due diligence obligations.
Listed entities, provided their securities are admitted to trading on a regulated market in Luxembourg or in the European Economic Area or in a third country imposing transparency obligations recognised as equivalent, are required only to file the name of the regulated market on which their securities are admitted to trading.
Access to the information
The information contained in the RBE (excluding the beneficial owner’s address and identification number) will be accessible to everyone though the online portal. The search may be carried out either by reference to the entity’s name or its RBE registration number.
The following process is available for restricting access to the information:
- The entity concerned or a beneficial owner may file an application to the RBE requesting that access to its information be restricted on the basis that access to the information reported would expose the beneficial owner to a risk of fraud, kidnapping, blackmail, violence or intimidation, or where the beneficial owner is a minor or otherwise suffering from an incapacity.
- As from the moment of such application and until 15 days after the decision on the application is published, the manager of the RBE is required to restrict access to the information.
- Where the application is accepted, the restriction on access to the information will apply for a maximum period of three years. An application for renewal of the restriction may be made.
- Where the application is rejected, an appeal may be filed within 15 days and the manager of the RBE is required to continue to restrict access to the information until a final decision is made.
- While access to the information is restricted, only national authorities, credit and financial institutions, bailiffs and notaries acting in their capacity as public officers have access the information of the RBE.
- Decisions of the manager of the RBE may be challenged in court by any interested party within 15 days from the time of publication of the decision.
Financial penalties of between €1,250 and €1,250,000 can be imposed on entities which do not register the information on the RBE within the required timeframes, knowingly provide incorrect or partial information or information which has not been updated or fail to obtain and keep the information at their registered office.