Luxembourg Introduces Beneficial Ownership Register as Part of EU’s Fight Against Money Laundering

Introduction of the Law

On January 13, 2019, Luxembourg’s parliament adopted legislation requiring the registration of beneficial owners in line with the European Union’s anti-money laundering directives. The law came into effect on March 1, and existing companies have until September 1 to comply.

Entities Affected by the Law

• Commercial companies
• Investment funds
• Other types of financial institutions

These entities are required to identify their beneficial owners and maintain up-to-date details about them at their registered office.

Central Register of Beneficial Owners (RBE)

A central Register of Beneficial Owners has been established to hold information on the beneficial owners and make it available to public authorities, other entities, and the general public. The register is maintained by the Luxembourg Business Register and will be accessible online.

Definition of Beneficial Owner

According to the law, a beneficial owner is defined as any individual who ultimately owns or controls a legal entity or on whose behalf a transaction or activity is carried out. In case of a corporate entity, this includes any individual who ultimately owns or controls a legal entity through direct or indirect ownership of a sufficient proportion of the entity’s shares, voting rights, or ownership interests.

Required Information

The information required to be provided about beneficial owners includes:

• Name
• Nationality
• Date and place of birth
• Country of residence
• Private or professional address
• National identity number
• Nature and extent of beneficial interests in the entity

Submission of Registration Requests

Entities must submit registration requests through an electronic platform provided by the Luxembourg Business Register. The information will be retained for five years after the dissolution of the entity or it ceasing to exist.

Consequences of Failure to Supply Required Information

Failure to supply the required information may result in fines ranging from €1,250 to €1.25 million. Beneficial owners who fail to provide the necessary information to the entity may also face similar penalties.

Access to the Register

The register will be accessible to Luxembourg’s public authorities, including:

• Public prosecutor’s office
• Financial intelligence unit
• Financial regulator CSSF
• Tax authorities

Entities can request restriction of access to the information included in the register under exceptional circumstances.

Communication of Information

Entities are required to communicate relevant information about beneficial owners to Luxembourg national authorities and institutions subject to anti-money laundering requirements upon request. Failure to comply may also result in fines ranging from €1,250 to €1.25 million.