Luxembourg’s new central ultimate beneficial owner register: the legal and practical consequences

Introduction

This note summarises the Luxembourg draft Bill of law of 06 December 2017 (the Draft Bill) on which the Act is based. The contents below are, therefore, subject to confirmation once the Act has been adopted in its final form.

What is the REBECO?

The Act establishes a new central register of ultimate beneficial owners (the “Registre des bénéficiaires effectifs” or “REBECO”) in which the ultimate beneficial owners (UBOs) of Luxembourg legal entities must be identified. The Draft Bill refers to the creation of two different registers, one covering trusts and fiduciaries while the other (the REBECO) relates to all types of commercial companies and other legal entities. Both registers will be managed by the Luxembourg Trade and Companies Register.

What types of Information must be collected and filed?

The following information (the Information) must be collected and filed in respect of the UBOs of a relevant entity:

• name
• date of birth
• place of birth
• nationality
• country of residence
• the private address or professional address
• the nature and extent of the beneficial interest held in the relevant entity.

Who is an ultimate beneficial owner?

The UBO of an entity is any natural person who:

• ultimately owns or controls that entity through direct or indirect ownership or controls more than 25% of the shares or voting rights in the entity, including through bearer share holdings, or
• otherwise exercises control over the management of a legal entity. ("Control" here means the power to decide, directly or indirectly, on the execution of transactions and to determine or to agree to the modalities thereof.)

It should be noted that if, after careful analysis, no UBO can be identified, Information must be provided with respect to any natural person holding a senior management position (dirigeant principal) in the relevant entity or group of entities (for example, the CEO). Such person’s name and details must be registered with the REBECO.

Which entities are within scope?

The Act applies to all entities registered with the Luxembourg Trade and Companies Register (“Registre de commerce et des Sociétés de Luxembourg” or “RCSL”) other than entities which have their securities admitted to trading on a regulated market as defined under the Transparency Directive (as amended).

The Act covers all types of management companies and investment funds - Common funds (“fonds communs de placement” or FCP), however, are out of scope.

Who is responsible for filing the Information?

The authorised representatives of a relevant entity are responsible for:

• collecting the Information
• keeping the Information accurate and up to date, and
• filing the Information (or an update) with the REBECO.

The Information is maintained by the REBECO for up to five years following the entity’s winding-up.

Availability of the Information

Information filed with the REBECO will be fully available to the national authorities (including the Luxembourg tax authorities). Certain self-regulated bodies and professionals may access the REBECO in the context of their anti-money laundering obligations. Any other Luxembourg resident will be able to request access to the REBECO on condition that they can justify a legitimate interest - this will be assessed, on a case by case basis, by a coordination committee established under the authority of the Luxembourg Justice Minister.

Personal data held on the REBECO will be treated in compliance with Luxembourg’s data protection law.

Timing

The Information (or updated Information) should be filed by the relevant entities’ authorised representative with the RCSL no later than a month following which the event requiring the submission of new or the modification of the existing Information occurs.

However, the Act provides for a six month transition period from the Act’s entry into force for existing entities.

Sanctions

Non-compliance with the Act’s requirements may result in a criminal fine ranging from €1,250 to €1,250,000.