Transparency as a rule
The Luxembourg law of 13 January 2019 (the RBE Law), establishing a register of beneficial owners (the RBE), was published on 15 January 2019 in the Luxembourg Official Gazette and entered into force on 1 March 2019. The purpose of the RBE Law is the creation of the RBE and the transposition of art. 30 of the EU Directive 2015/849 as amended by the EU Directive 2018/843. The RBE Law is supplemented by the Grand-Ducal Regulation of 15 February 2019 (the GDR) on the registration, payment of administrative fees and access to information recorded in the register of beneficial owners.
The purpose of this note is to provide a summary on who shall register, how to register and other the general functions of the RBE.
Who is affected?
Any individual (the Effective Beneficiary) who either (i) directly or indirectly holds 25% or more of the shares, or (ii) directly or indirectly controls through its shareholding or any Luxembourg entity registered with the Luxembourg Business Register (Registre de Commerce et des Sociétés, Luxembourg – the RCSL). If no Effective Beneficiary can be identified, unless there are ground for suspicions, any individual who acts as main director of the Registered Entity shall be recorded in the RBE as Effective Beneficiary.
Any of the following entities (each a Registered Entity) must be registered with the RCSL (this list is not exhaustive):
- Public limited company (société anonyme) and simplified public limited company (société par actions simplifiée);
- Private limited liability company (société à responsabilité limitée) and simplified private limited liability company (société à responsabilité limitée simplifiée);
- Corporate partnership limited by shares (société en commandite par action);
- Common limited partnership (société en commandite simple) and special limited partnership (société en commandite spéciale);
- General corporate partnership (société en nom collectif);
- Co-operative society (société coopérative);
- European company (société européenne);
- Civil company (société civile);
- Luxembourg subsidiary of any foreign commercial companies
- Non-profit association (association sans but lucratif);
- Fundation (fondation);
- Economic interest groups (groupements d’intérêt économique) and European economic interest groups (groupements européens d’intérêt économique); and
- Mutual funds (fonds communs de placement).
If shares of a Registered Entity are admitted for trading on a regulated market of the European Union (or a third party State deemed imposing similar obligations to the issuers), then they shall exclusively record it to the RBE, stating the name of the regulated market where their shares are being admitted to for trading.
Trusts (or similar institutions under civil law, like the fiducie under Luxembourg law), settlors, trustees, the protector (as applicable), beneficiaries, or where no beneficiaries have been designated, the category of persons in the interest of whom the trust was formed or operates, as well as any individual who might be in control directly or indirectly of such trust, must be recorded in the RBE.
Who will manage the information?
The manager of the RBE will manage the RBE under the name “Registre des bénéficiaires effectifs” or “RBE”, which will be accessible on a dedicated Internet portal of the RCSL (www.lbr.lu).
Who will feed the information to the RBE?
It is the responsibility of the Registered Entities to feed the RBE. In practice, the Registered Entities may appoint an agent to take care of these formalities.
The Registered Entities must provide any necessary information on the Effective Beneficiaries to the RBE within 1 month of the knowledge of any event requiring a registration or from the date where the Registered Entity should have had knowledge of such event (incorporation, transfer of shares etc.). The RCSL shall check the received information and put the information online in the RBE within 3 days, this will not be automatic.
Information that will be available on the RBE on the Effective Beneficiary:
- Full name,
- Nationality,
- Full date of birth,
- Place of birth,
- Country of residence,
- Full private or professional address,
- ID number,
- Nature of the interest the BE holds,
- Extent of the interest the BE holds.
The information must be accurate, up to date and relevant, and the request for filing shall be sustained by the relevant documentation, which can be a copy of the ID or passport of the Effective Beneficiary.
How to submit and update information on the RBE?
The Registered Entity or its agent will provide the information through a secure electronic gateway on the RCSL website. Any national authorities and/or professionals of the financial sector (e.g. banks, insurance companies, pension funds, undertaking for collective investments, management companies, auditors, lawyers…) accessing the RBE will be under the obligation to declare any erroneous, incomplete or out of date data to the RCSL.
Information retainer period
The RBE will retain all information for 5 years after the radiation of the Registered Entity from the RCSL. This applies to any information, any request of recordings in the RBE as well as any sustaining documentation. Any data on a national authority accessing the RBE will also be retained for 5 years following the consultation. Log data must be also be kept for 5 years from their recordings.
Access to the RBE
The RBE will be accessible from 1 September 2019.
National authorities will have full access to the data on the Effective Beneficiaries without any restriction.
Any other person will only have access to the following information on the Effective Beneficiary:
- Full name,
- Nationality,
- Full date of birth,
- Place of birth,
- Country of residence,
- Nature of his/her interest,
- Extent of his/her interest.
The RBE can be accessed through the RCSL and it is free of charge. Research may be carried out by using the company name, the business name or the RCSL registration number. Only the national authorities may carry out research using the effective beneficiary’s name. The conditions of access to the RBE, as well as the search criteria, is regulated by the GDR.
The access to the database by national authorities will be tracked with substantial security measures allowing to determine:
- Who accessed the RBE,
- What information was gathered,
- The date and time of consultation,
- The reference of the file within the frame of which the consultation was done, and
- The accurate motives of such consultation.
This last section is interesting since consultation is open to any person without restrictions, and only the national authorities have to justify a specific interest to access the RBE, which seems to mean that foreign authorities benefit of a more flexible regime.
Access Restrictions
The Effective Beneficiary or the Registered Entity may request to the RCSL that restrictions be set as to whom may access the RBE’s file of the Registered Entity.
Restrictions will be granted in exceptional circumstances, in which cases only national authorities, banks or financial institutions as well as notaries in the exercise of their duties will be granted access.
The exceptional circumstances will have to be motivated and may be upheld where the Effective Beneficiary may be exposed to disproportionate risks, risks of fraud, kidnapping, blackmail, extortion, harassment, violence or threat, or where the Effective Beneficiary is a minor or otherwise incapacitated adult.
If a restriction is granted, it will be for a maximum period of 3 years only (or shorter period as may seem adequate), and renewable on demand from the Effective Beneficiary or the Registered Entity.
Any decision in this respect will eventually be appealable in court within fifteen days and any such opened proceeding will have cause suspending the public access to the file of the Registered Entity until a final decision is taken.
Sanctions
The Registered Entity who fails to request recording of its Effective Beneficiaries in the RBE, fails to record changes in its Effective Beneficiaries, provides incorrect, incomplete or out of date information on its Effective Beneficiaries, or fails to store all information at its registered seat about its Effective Beneficiaries may be fined up to EUR 1,250,000.-
The Effective Beneficiaries who fails to provide the Registered Entity with any information it is due to be recorded on the RBE may also be fined up to EUR 1,250,000.-
Grand Fathering Period
Any Registered Entity must provide all the requested information within 6 months from promulgation of the law (i.e. until 1 September 2019). During such period, the registration of Registered Entities is exempt of administrative costs.
For more information please contact Victor Regnard on +352 26 48 68 48 or at victor.regnard@crsblaw.com.
