The law dated 18 December 2018 (the “BO Register Law”), entering into force as of 1st March 2019, implemented into Luxembourg law the transparency measures provided by the Directive 2015/849 (the so-called 4th AML Directive) by setting up a public register of beneficial owners.
The scope of the Register Law is wide and obligations deriving therefrom apply to all legal entities registered with the Luxembourg trade and companies register.
The beneficial owner may be defined as the natural person who ultimately owns or controls the legal entity subject to the obligations of the BO Register Law (through the direct or indirect ownership of more than 25% of the shares or voting rights, alternatively when the natural person is in position to otherwise exercise authority over the management of the legal entity). If no such person may be identified, the members of the management body will be considered as beneficial owners
The obligations of the legal entities subject to the Register Law are twofold:
First, they shall be required to hold and store accurate and up-to-date information on the beneficial owners (name, surname, nationality, date and place of birth, country of residence, exact private or professional address, national or foreign identification number and the nature and level of beneficial ownership).
Second, these entities shall further be obliged to file in addition to the same information (name, surname, nationality, date and place of birth, country of residence, private or professional address, national or foreign identification number) the nature and level of beneficial ownership in a new centralised register.
The content of the centralised register of beneficial owners will be made available electronically to competent authorities (i.a. public prosecutor, the financial regulator, social and tax authorities) and to the public. However, the access of the latter to the information is slightly restricted (no access to the address and national or foreign identification number).
Further, in certain specific cases, a legal entity subject to the obligations of the Register Law may request limited access to the information in the register with respect to its beneficial owners.
The non-compliance with the obligation of setting-up internal file or the non-provision (or inexact provision) of information to the register of beneficial owners is a criminal offence subject to fines from EUR 1,250 and EUR 1,250,000 on the entities failing to provide information (or accurate information) as well on the actual beneficial owners who refuse to communicate the data.
Finally, the BO Register Law introduced a 6-month grand-fathering period during which the legal entities subject to the obligations of the Register Law will have to comply with the provisions of the Register Law.
The Grand-Ducal Decree setting the practical rules implementing the BO Register Law is expected soon.