New mandatory reporting obligations for all Luxembourg entities


In brief

On 15 January 2019, in accordance with the European regulations (4th and 5th AML directives), Luxembourg published its law (the "Law") to implement a register of beneficial owner (the "BO register") (see our last newsletter on the topic)
Please note that this Law, which will come into force as of 1 March 2019, and will apply to all legal forms registered in the Luxembourg trade register.
The Grand-Ducal Regulation, published on 19 February, provides guidance on the practical application of the Law. Given the wide-ranging scope of the Law, we strongly encourage you to (i) identify and confirm the various beneficial owners ("BO") of the Luxembourg entity and to (ii) collect the requested supporting documents, whether it is for your own benefit or on your clients' behalf as soon as possible.

Which entities need to report?

The registration obligation will apply to all legal forms registered in the Luxembourg trade register, including mutual funds or branches of foreign companies.

Please note that companies listed on Luxembourg stock exchanges, or equivalent, will only have to disclose the market on which they are listed. However, they are not required to disclose their BOs.

Which information will need to be disclosed?

BOs are defined as per AML regulation.

(i) For any natural person directly or indirectly holding a percentage of more than 25% of an entity’s shares or voting rights, or (ii) in case there is no natural person identified under (i), the natural person(s) who hold(s) a senior management position, the following information needs to be disclosed: name, date and place of birth, nationality(ies), country of residence, private or professional address, identification number and nature and extent of the beneficial ownership held.

Data must be exact, accurate and up-to-date. Supporting documents must be filed together with the requested information and should be available at the registered office of the entity.

Please note that this identification of the BO(s) may need to be properly analysed on a case-by-case basis, notably in the presence of complex structures (trusts, etc.) or specific detention arrangements (dismemberment, etc.).

When does the data need to be filed?

Existing Luxembourg entities will have six months (i.e. 1 September 2019), to identify and register their BOs.

One month after an entity is aware, or should have been aware, of a change the modified information will have to be filed.

Who may access to the filed information?

The BO register will be accessible to the public at large (except the address and the national identification number of the BOs, these are only available to Luxembourg national authorities). Supporting documents, however, will not be accessible.

A limitation of access to public information may be granted in exceptional circumstances (e.g. risk of fraud, kidnapping, blackmail, extortion, juvenile or legally disabled BO, etc.). In that case, a specific request should be submitted to the BO register in order to prevent the public disclosure for a 3-year period (maximum), renewable if necessary.

What are the applicable sanctions?

A fine from EUR 1 250 to 1 250 000 will be applied in the case of failure to comply with the registration or storage obligations. This criminal fine will be imputable to the entity and/or the BO if they have failed to provide the requested information.

How can we help you?

We at PwC Luxembourg can assist you throughout the process, (i) to identify the BOs, (ii) to set-up procedures to alert you in case of changes in the BOs requiring new filing, (iii) to prepare exemption requests and (iv) to register the BO itself.

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