Law of 13 January 2019 Establishing a Beneficial Owner Register in Luxembourg

The Law of 13 January 2019 has introduced a significant change in the way companies and trusts are registered and disclosed in Luxembourg. The law establishes a beneficial owner register, which aims to create transparency in the ownership structure of entities in the country.

Key Aspects of the Law

Beneficial Ownership

• The law defines beneficial ownership as holding more than 25% of voting rights or having the right to appoint or remove directors.
• This definition ensures that companies and trusts can identify their true owners, making it easier to prevent money laundering and other illicit activities.

Registration Requirement

• All companies, including those that are not publicly traded, must register their beneficial owners with the Trade and Company Register (RCS).
• This registration requirement helps maintain a comprehensive database of beneficial owners in Luxembourg.

Information Disclosure

• The law requires the RCS to disclose information about beneficial owners, including names, addresses, and identification numbers.
• However, beneficial owners can request protection of sensitive personal data from public access.

Protection of Sensitive Information

• Beneficial owners have the right to protect their sensitive personal data, such as home addresses or identification numbers, from public access.
• This provision ensures that individuals’ privacy is respected while maintaining transparency in ownership structures.

Fines for Non-Compliance

• Companies and individuals who fail to register or disclose accurate beneficial ownership information may face fines ranging from €1,250 to €1,250,000.
• These fines serve as a deterrent for non-compliance with the law and ensure that companies take their registration obligations seriously.

Amending Existing Laws

• The law amends various sections of the Law on Trade and Company Register (19 December 2002) and introduces new provisions related to identification numbers, precise addresses, and electronic signatures.
• These amendments reflect the need for a more modern and efficient system for registering companies and trusts in Luxembourg.

Aim of the Law

The law aims to prevent money laundering and ensure transparency in the ownership structure of companies and trusts. By providing a framework for identifying and disclosing beneficial owners, it helps maintain financial integrity and prevents illicit activities. The introduction of this law marks an important step towards creating a more transparent and accountable business environment in Luxembourg.