LUXEMBOURG. Luxembourg register of beneficial owners

Transcription

1 LUXEMBOURG Luxembourg register of beneficial owners January 2018

2 Profile Loyens & Loeff Independent and international As a fully independent law firm, Loyens & Loeff is excellently positioned to coordinate international tax and legal matters. We have our own network of offices in major financial centres, staffed with specialists in Dutch, Belgian, Luxembourg and Swiss law. Through these offices, our clients have access to Loyens & Loeff s full-service legal expertise in their own time zone. Our office network is complemented by our several country desks all of which are experienced in structuring investments all over the world. It s a winning combination that enables us to assist international clients in a very effective way. Moreover, we are on excellent terms with other leading independent law firms and tax consultants. That way, we can guarantee you top-level advice in every part of the world. Full-service practice Innovative and Pragmatic As a leading firm, Loyens & Loeff is the natural choice for a legal and tax partner if you do business in or from Luxembourg, Belgium, the Netherlands and Switzerland, our home markets. You can count on personal advice from any of our 820 advisers based in one of our offices in the Benelux, Switzerland, or in key financial centres around the world. Thanks to our full-service practice, specific sector experience and thorough understanding of the market, our advisers comprehend exactly what you need. Each problem requires a customised solution. Our pragmatic approach and drive to devise innovative solutions allow us to effectively address the demands of our clients domestic and international businesses. Thanks to the broad range of our legal experience, know-how and the size of our practices, we can offer you top-level advice, locally and internationally. We are committed to meeting your needs at the highest quality level in the most efficient way. Although great care has been taken when compiling this overview, Loyens & Loeff Luxembourg S.à r.l. does not accept any responsibility whatsoever for any consequences arising from the information in this publication being used without its consent. The information provided in the publication is intended for general informational purposes and can not be considered as advice.

3 Luxembourg register of beneficial owners 3 Luxembourg register of beneficial owners On 20 May 2015, the fourth Anti-Money Laundering Directive 1 was adopted by the European Parliament and the Council. In execution of this European measure, the Luxembourg government has introduced a draft bill of law 2 on 6 December 2017 (the Bill). The Bill creates a register of beneficial owners (registre de bénéficiaires effectifs REBECO) in which the ultimate beneficial owners of companies and other Luxembourg legal entities need to be identified. The Bill is expected to be adopted by the Luxembourg Parliament and come into force within the first quarter of this new year. The below summary provides a brief overview of the impact of the Bill on Luxembourg management companies and investment vehicles. Executive summary The board of the Luxembourg management companies and investment vehicles should consider the following actions in the context of the Bill: 1. Review and renegotiate agreements with the Transfer Agents in order to delegate certain requirements imposed by the Bill (such as collecting the relevant information from investors, filings with the REBECO and keeping data up to date). 2. Review the existing investors basis and identify investors holding more than 25% in the investment vehicle. 3. Those investors would need to (i) confirm whether they invest on their own behalf or as a nominee and (ii) provide information regarding the ultimate beneficial owner(s). 4. Family Offices investment vehicles and other highly sensitive structures should consider to apply for authorization to limit access to information filed in the REBECO. 5. Investment vehicles existing under the form of an investment company with variable capital (SICAV) may consider a conversion into a common fund (FCP). 1 Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC (the 4th AML Directive) 2 Bill of law n 7217 establishing a register of beneficial owners, transposing the 4th AML Directive and amending the Luxembourg law of 19 December 2002 regarding the trade and companies register

4 4 Obligation to collect and file information with the REBECO Who is concerned? All types of management companies and all types of investment funds, except for FCPs. All Luxembourg companies and partnerships are required to (i) obtain and hold information on their ultimate beneficial owner(s) and (ii) provide such information to the newly created REBECO which is maintained by the Luxembourg Trade and Companies Register (Registre de Commerce et des Sociétés, RCS). This requirement notably applies to investment funds, as well as their special purpose vehicles, established in the form of a public limited company, private limited company, partnership limited by shares, common limited partnership or special limited partnership (generally further referred to as the entity ). In practice, we expect that the funds and their management companies will arrange for the delegation of these requirements to the transfer agent responsible for collecting investors information. Common funds (fonds communs de placement, FCP) are out of scope. In this context it should be noted that under the Luxembourg laws of 19 December 2010 (UCI law) 3 and of 13 February 2007 (SIF law) 4, investment companies with variable capital (SICAV) may be converted into common funds (FCP) by resolution of a general meeting passed with a majority of two thirds (2/3) of the votes of the shareholders/partners present or represented regardless of the portion of the capital represented. 3 Article 180 of the law of 19 December 2010 on undertakings for collective investment, as amended. 4 Article 70 of the law of 13 February 2007 on specialised investment funds, as amended.

5 Luxembourg register of beneficial owners 5 Unfortunately, the Luxembourg law of 23 July 2016 on reserved alternative investment funds (RAIF law) does not provide for the same flexibility which raises questions with respect to the feasibility of such conversion. 5 Whose data need to be filed? Information to be filed with the REBECO pertains to any natural person who ultimately owns or controls the entity through direct or indirect ownership of a sufficient percentage of the shares or voting rights or ownership interest in that entity, including through bearer shares, or through control via other means (the UBO). A shareholding of 25 % plus one share or an ownership interest of more than 25% in the entity held by a natural person shall be an indication of direct ownership. A shareholding of 25 % plus one share or an ownership interest of more than 25 % in the entity held by a corporate entity, which is under the control of a natural person(s), or by multiple corporate entities, which are under the control of the same natural person(s), shall be an indication of indirect ownership. If, after having exhausted all possible means and provided there are no grounds for suspicion, no UBO can be identified, or if there is any doubt that the person(s) identified are the UBO(s), information has to be provided with respect to the natural person(s) who hold the position of senior management (dirigeant principal). The Bill does not establish any specific regime for nominee set-ups. In this respect, the nominee in principle will need to inform the entity of the identity of the ultimate beneficial owner of the shares/interests it holds/acquires for the benefit of its client where the 25% threshold is exceeded. The board of the investment vehicle should therefore contact or instruct its agent(s) to contact existing shareholders and obtain information on (i) whether they hold a participation in the fund for their own account or as a nominee and (ii) who the UBOs are. This also applies to holders of global certificates (Globalurkunde). 5 A SICAV in the form of a special limited partnership could therefor consider introducing the possibility of its conversion into a FCP in its limited partnership agreement in order to create the flexibility lacking in the law.

6 6 What data need to be filed? The REBECO will contain the name, date and place of birth, nationality and the country of residence, the exact private address or exact professional address of the UBO and the identification number for the individuals registered in the Luxembourg Register of Natural Persons (or for nonresident individuals their national identification number, e.g. the number of the ID card). Detailed information on the nature and the extent of the beneficial interest held should also be included in the REBECO. These data will be kept in the REBECO for a period of five (5) years after the winding-up of the relevant entity. Information kept at the entity s registered office needs to be kept for a period of five (5) years at such place as designated in the liquidation deed. Obligation to keep data accurate and up to date The Bill introduces, in its article 8, an obligation for each person having access to the REBECO to inform the RCS without delay as soon as such person becomes aware that the information filed with the REBECO is either incomplete or wrong or not up to date. Such obligation notably lies with professionals such as credit institutions, professionals of the financial sector, UCITS and AIF management companies, lawyers and notaries. The very broad wording of article 8 of the Bill raises certain concerns regarding professional secrecy obligation.

7 Luxembourg register of beneficial owners 7 Access to information filed with REBECO The Bill provides that personal data filed with the REBECO can be accessed electronically, within certain limits and that the RCS will issue electronic or physical extracts. All information filed with the REBECO can be accessed electronically by Luxembourg national authorities such as, amongst others, the Financial Intelligence Unit (Cellule de renseignement financier), the CSSF and the Tax Administration (Administration des contributions directes). Self-regulatory bodies such as the Bar Association (Conseil de l ordre des avocats), the Chamber of Notaries (Chambre des notaires) and the Institute of Registered Auditors (Institut des Réviseurs d Entreprises) will have access to certain data available in the REBECO upon prior accreditation by the RCS in accordance with a procedure still to be laid down in a future grand-ducal regulation. The Bill further grants access to certain data available in the REBECO to professionals subject to the AML/KYC obligations under the Luxembourg AML law. 6 In this respect, lawyers and notaries, credit institutions, insurance companies and professionals of the financial sector, UCITS and AIF management companies etc will be able to request an accreditation by the RCS (in accordance with a procedure still to be laid down in a future grand-ducal regulation) in order to gain electronic access to certain information available in the REBECO, but only in order to comply with their AML/KYC obligations. Finally, upon specific and motivated request submitted to the RCS and processed by a specific commission (commission de coordination) to be created within the Ministry of Justice, any person or organisation residing in Luxembourg can ask to access certain information pertaining to an identified entity which filed information about its UBO(s) with the REBECO. 6 Law of 12 November 2004 regarding the combat of money laundering and financing of terrorism, as amended.

8 8 The request must evidence the legitimate interest of the person or organisation which wishes to receive access. If the commission confirms that such legitimate interest exists, it will grant the authorisation to access the relevant data and notify such decision to (i) the applicant, (ii) the entity concerned and (iii) the RCS. Limitation of access to exceptional circumstances An entity required to file information with the REBECO may request that the access to such information is limited exclusively to the national authorities. Such request must be duly motivated and addressed to the RCS, which will transmit it for review and authorisation to the specific commission (commission de coordination). In accordance with article 16 of the Bill, the limitation of access will be granted only in exceptional circumstances where access to information available in the REBECO could expose the UBO to a risk of fraud, kidnapping, blackmail, violence, intimidation or where the UBO is either a juvenile or legally disabled (incapable). Data protection The Bill states that personal data will have to be treated in compliance with the Luxembourg data protection law. 7 It remains to be seen how compliance will be ensured with the upcoming General Data Protection Regulation 8 and the relevant EU and Luxembourg case law in this context. 7 Law of 2 August 2002 regarding protection of personal data, as amended. 8 Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data and repealing Directive 95/46/EC.

9 Luxembourg register of beneficial owners 9 Deadlines to file information with the REBECO and applicable sanctions The relevant information has to be filed with the REBECO within one (1) month of such information becoming necessary to be filed in accordance with the Bill. In practice this means that information on the UBO has to be filed with the REBECO within one (1) month of the establishment of the entity as well as within one (1) month after a change in the UBO (for example following a significant subscription or redemption). The filing will be made electronically on a specific platform. The required documents will be specified in an upcoming grand-ducal regulation. The RCS will register the information in the REBECO within 3 business days following the filing. If any data are missing or inaccurate the RCS will either reject the request or ask for additional documents and/or data. The entity must revert to the RCS within fifteen (15) calendar days. If the RCS is still not satisfied with the entity s feedback, it will reject the filing. Legal action against that rejection will have to be filed within eight (8) calendar days before the district court (tribunal d arrondissement). Transitional period Existing entities will need to file the relevant information with the REBECO within six (6) months after the entry into force of the Bill. Sanctions Non-compliance with the obligation to file the relevant information on the UBO(s) with the REBECO, to keep such information accurate and up to date and all the other obligations laid down in the Bill may result in a criminal fine ranging from EUR 1,250 to EUR 1,250,000. These sanctions can be imposed on the entity itself or on its directors/managers.

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11 Contact information Loyens & Loeff Luxembourg S.à r.l. Avocats à la Cour 18-20, rue Edward Steichen L-2540 Luxembourg T F Marc Meyers T M E marc.meyers@loyensloeff.com Thibaut Partsch T M E thibaut.partsch@loyensloeff.com Max Welbes T M E max.welbes@loyensloeff.com Christophe Boyer T M E christophe.boyer@loyensloeff.com Pieter Leguit T M E pieter.leguit@loyensloeff.com Jérôme Mullmaier T M E jérôme.mullmaier@loyensloeff.com Tobias Niehl T M E tobias.niehl@loyensloeff.com Marjorie André T M E marjorie.andre@loyensloeff.com Laure Mersch T M E laure.mersch@loyensloeff.com Veronica Aroutiunian T M E veronica.aroutiunian@loyensloeff.com

12 LOYENSLOEFF.COM As a leading firm, Loyens & Loeff is the logical choice as a legal and tax partner if you do business in or from the Netherlands, Belgium, Luxembourg or Switzerland, our home markets. You can count on personal advice from any of our 900 advisers based in one of our offices in the Benelux and Switzerland or in key financial centres around the world. Thanks to our full-service practice, specific sector experience and thorough understanding of the market, our advisers comprehend exactly what you need. Amsterdam, Brussels, Hong Kong, London, Luxembourg, New York, Paris, Rotterdam, Singapore, Tokyo, Zurich