Financial Crime World

Luxembourg Introduces Beneficial Ownership Registration Requirements for Covered Entities

A New Era of Transparency in Luxembourg

As of January 13, 2019, Luxembourg has implemented new regulations aimed at combating money laundering and terrorist financing through the introduction of beneficial ownership registration requirements for covered entities. This significant change requires all registered entities in Luxembourg to obtain and hold information on their “ultimate beneficial owner” (UBO) and make this data accessible to the public and authorities.

Who is Affected by these Regulations?

The beneficial ownership registration requirements apply to all covered entities, including:

  • General partners
  • UCITS
  • SIFs
  • FCPs
  • SCSPs
  • SLP
  • SOPARFIs
  • Other entities registered with the Trade and Companies Register (RCS)

These entities must take reasonable steps to obtain, hold, and disclose adequate, accurate, and current information on their UBO(s).

What is Ultimate Beneficial Ownership?

Ultimate beneficial ownership is defined as any natural person who owns or controls a legal entity through direct or indirect ownership of enough shares or voting rights or ownership interest in that entity.

  • Direct ownership is indicated by shareholding 25% plus one share/ownership interest held by a natural person.
  • Indirect ownership is indicated by shareholding 25% plus one share/ownership interest held by a corporate entity under the control of a natural person(s).

Consequences of Non-Compliance

Failure to comply with these regulations may result in severe consequences, including:

  • Criminal fines of up to €1,250,000.

Ensuring Compliance with the Help of Experts

Duff & Phelps and Kroll provide a comprehensive suite of due diligence and compliance solutions to help clients navigate the complex requirements of beneficial ownership registration. Their services include:

  • UBO documentation reviews
  • UBO identification through public record research
  • Enhanced due diligence reports
  • Compliance portal management
  • Risk-based approaches to compliance programs

Expertise and Knowledge at Your Service

Duff & Phelps, a division of Kroll, has over 14 years of experience in providing asset management services for international clients. Their team of experts provides unparalleled expertise and knowledge in navigating the complex regulatory landscape of beneficial ownership registration.

By partnering with Duff & Phelps and Kroll, clients can ensure compliance with the new regulations, mitigate reputational risks, and maintain a strong reputation in the industry.