UBO disclosure obligations – Entered into force in Luxembourg on 1st march 2019

On 1st March 2019 a law dated 13 January 2019 implementing new disclosure obligations in relation to ultimate beneficial owners (“UBO’s”) of legal entities has come into force in Luxembourg. Through this law and in accordance with EU legislation, Luxembourg has created a national register for UBO’s entailing mandatory duties and obligations for any legal entity existing under the laws of Luxembourg. Here is what you should need to know about these disclosure obligations.

Concept of UBO

A UBO is defined as any natural person who ultimately owns or controls a legal entity or as any natural person for whom a transaction is executed or an activity realized.

The criteria for identification of a UBO may either be based on the direct or indirect ownership the person has in the relevant entity and/or on the control the person exercises over said entity.

The holding by a natural person of more than 25% of the shares of a company is an indication of such beneficial ownership, which however does not mean that any natural person owning less than 25% is automatically excluded of the status of UBO (as the control can be exercised through other means).

If no UBO can be identified by application of these criteria or if there is still uncertainty as to the qualification of UBO-ship of a person, information about the natural person(s) holding the position of senior management of the company shall be filed with the UBO Register instead.

Information to be disclosed

  1. name and given name(s);
  2.  nationality(ies);
  3.  day, month, year, and place of birth;
  4.  country of residence with precise details of the private or professional address;
  5.  for individuals registered in the Luxembourg national register of natural persons: the identification number (matricule); for those not registered in the Luxembourg national register of natural persons: the foreign national identification number;
  6.  nature and extent of the beneficial interest held in the company. UBO disclosure obligations entered into force in Luxembourg on 1 March 2019 2 / 2 In case the relevant Luxembourg entity is a company listed on a regulated market in Luxembourg, in the EEA, or with a third-country market, which is recognized as equivalent by the European Commission, then the UBO information to be disclosed can be limited to the name of the regulated market(s) on which the company is admitted to trading.

Timing

Legal entities have six months, starting on 1 March 2019 (i.e. ending on 31 August 2019) to comply with their new obligations.

As of the expiry date of this initial term, legal entities or their proxy must request the application for registration of the relevant information relating to their UBO(s) within one month as of the date on which the company became aware or should have become aware of the event that triggered the obligation of registration, or of amendment of the information contained in the UBO Register.

Responsibility to disclose; process; and sanctions

The UBO disclosure obligation is incumbent to Luxembourg legal entities existing under the laws of Luxembourg, whatever their legal forms including non-profit organizations (ASBL). The information filed must be accurate, complete, and up-to-date. Failure by such entities and their relevant UBO(s) (who must make the relevant information available to the relevant entity) to comply with their respective obligations is subject to criminal sanctions consisting in fines of an amount ranging from EUR 1,250- to EUR 1,250,000..

Data protection

The Law does not provide for specific data protection rules but merely grants to the Ministry of Justice the function of data controller. It is however admitted that legal entities, which are collectors and custodians of information and supporting documentation relating to their UBO(s), should collect and keep this information in compliance with the General Data Protection Regulation (GDPR).

Access to the information contained in the UBO Register

The UBO Register may be accessed without any limit by national authorities such as the State prosecutor, tax administrations, financial authorities, etc.

The general public shall also be granted access to the UBO Register but with some limitations. However, for privacy protection reason, private and/or professional address and identification number of the UBO’s shall not be accessible to the public.

Any legal entity or UBO may submit a request to limit the access of the register’s information to national authorities and some professional (e.g. banking and financial institutions, notaries, etc.) based on exceptional circumstances clearly identified (e.g. the UBO is a minor or is otherwise incapacitated or the information would expose the UBO to a risk of fraud, kidnapping, blackmail, extortion, harassment, violence, or intimidation).

Practical advice for Luxembourg companies:
how to be prepared?

It is the fiduciary duty of the management body of all Luxembourg entities to comply with these disclosure obligations by 31 August 2019, at the latest. Relevant information about their structure’s UBO(s) should therefore be collected in accordance with the following process:

  • identify the UBO(s);
  • request the identification data of each UBO;
  • identify a legal representative (i.e. manager/director/management body) or appoint an authorized representative (e.g. special power of attorney) who owns a local user account type “Luxtrust certificate” (e.g. Token, Smartcard, Signing Stick, etc.) who will record and fill in the relevant information with the UBO Register via the Luxembourg Business Registers’ online platform in the name and on behalf of the entity.

It is highly recommended that concerned legal entities implement internal procedures so that they are in a position to obtain, hold, and record adequate, accurate, and up-to-date information on their UBO(s) at any time and are able to inform the UBO Register of any change.

Trialys Law Firm has the required capabilities and is keen to perform the filing of the relevant information with the UBO Register in the name and on behalf of its clients. Please do not hesitate to contact us should you have any questions or need of assistance.

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