AED ¦ Lignes directrices PSSF (Version 3.0)

When a director becomes a trust and company service provider in Luxembourg

Luxembourg’s AML/CFT Prevention Committee has published version 3.0 of its guidelines on trust and company service providers (TCSPs), or PSSF in French,, dated March 2026. The guidelines explain who falls within the TCSP definition in Article 1(8) of the Law of 12 November 2004 and who must register as a TCSP under Article 7-2(1). The update concentrates on Article 1(8)(b), the service of acting as, or arranging for another person to act as, director, manager, board member, secretary or partner of a company, and uses a table of typical cases to show when board members, director-placement firms and corporate directors fall within the definition and when they do not.

Who the guidelines address

TCSP activities can be carried out in Luxembourg by many kinds of professionals, including banks, specialised PFS, investment firms, insurance professionals, statutory auditors, chartered accountants and lawyers. Each type has its own AML/CFT supervisor or self-regulatory body. The guidelines address the professionals supervised by the AED, which in this context means business centres and, in some cases, directors, together with the Institut des réviseurs d’entreprises, the Ordre des experts-comptables and the Bars of Luxembourg and Diekirch.

They do not apply to professionals authorised under the Law of 5 April 1993 on the financial sector or the Law of 7 December 2015 on the insurance sector, which are subject to specific rules under the CSSF and the CAA. The guidelines were drafted by the Prevention Committee’s TCSP working group, made up of the AED, the two Bars, the Ordre des experts-comptables and the IRE, with the Institut Luxembourgeois des Administrateurs consulted. The joint drafting also serves the duty of cooperation in Article 7-2(3), which supports a national list of TCSPs. As with any guidance, the guidelines cannot change the scope or meaning of the law, whose interpretation belongs to the courts.

Bastian Schwind-Wagner _Follow

"Version 3.0 of the PSSF guidelines gives Luxembourg directors a clear test: a board mandate makes you a TCSP only when you act in the name and on behalf of someone who instructs you. That brings welcome legal certainty to independent directors who sit on boards in their own name, including through a one-person company.

The flip side matters just as much. Directors introduced through placement firms, mandates arranged for clients and corporate directors acting for a third party fall within the definition, with registration and the full set of AML/CFT duties, including due diligence on whoever stands behind the appointment."

The five TCSP services and the gatekeeper role

Article 1(8) defines a TCSP as any natural or legal person who, in the course of a business relationship, provides one of five services to third parties: forming companies or other legal persons; acting as director, manager, board member or secretary of a company, partner of a partnership or similar position, or arranging for another person to do so; providing a registered office, business, administrative or postal address, premises or related services; acting as fiduciary or trustee of an express trust or similar arrangement, or arranging for another person to do so; and acting as nominee shareholder for another person, or arranging for someone else to do so. The definition follows the FATF glossary and its 2019 risk-based guidance for TCSPs.

A TCSP is subject to the full set of obligations under the AML/CFT Law: a risk assessment, identification and verification of customers and beneficial owners, ongoing monitoring of the business relationship, cooperation with its supervisor and suspicious transaction reporting to the Cellule de Renseignement Financier (CRF). The point of including TCSPs is their gatekeeper role. Directors, nominees and domiciliation agents are often the people who know who really stands behind a company, and their due diligence is what allows information on the customer, the beneficial owner and the relationship to reach the CRF and the prosecuting authorities. A TCSP cannot rely on the fact that other obliged professionals also act for the same client.

Nominee directors, nominee shareholders and beneficial ownership

The guidelines take over the FATF’s definitions of nominee arrangements. A nominator gives instructions, directly or indirectly, to a nominee to act on its behalf as director or shareholder, and is sometimes called a shadow director or silent partner. A nominee director regularly performs the functions of director on behalf of, and under direct or indirect instructions from, the nominator. A nominee shareholder exercises voting rights on the nominator’s instructions or receives dividends on its behalf.

Two consequences matter for beneficial ownership analysis. A nominee director is never the beneficial owner of the legal person, and a nominee shareholder is never the beneficial owner because of the shares held as nominee. The person behind the arrangement is the one who has to be identified, and nominee structures remain one of the classic ways to hide that person and the proceeds of crime that pass through a company.

Business relationship and third parties: the terms that decide the case

A service is provided “in the course of a business relationship” when it forms part of the professional activities of an obliged entity within the meaning of Article 1(13) and has a certain duration. Soliciting clients, for example through a website, and receiving remuneration are indications of a professional service. Services provided outside the professional activity are not covered.

Most borderline cases turn on the notion of “third party”. A third party is the natural or legal person or legal arrangement on whose behalf the professional provides a TCSP service. It excludes the professional itself and, for Article 1(8)(b), also the legal person in which the director function is exercised. The professional acts in the name and on behalf of that third party, who has the power to give instructions on how the service is performed. Legal persons cover companies under the Law of 10 August 1915, civil companies, non-profit associations and foundations and foreign legal persons. Legal arrangements cover fiducies under the Law of 27 July 2003, trusts under the Hague Convention and similar arrangements as defined in the Law of 10 July 2020 on the register of fiducies and trusts.

Three cumulative conditions for directorship services

The Law of 29 July 2022 wrote into Article 1(8)(b) what version 2.0 of the guidelines had already said: “director” means members of the statutory management bodies, such as managers (gérants), board members (administrateurs) and members of the management board (directoire). Members of an audit committee are not part of the management body and are therefore not TCSPs.

A natural or legal person falls within Article 1(8)(b) only when three conditions are met together. It holds one of the listed functions or arranges for another person to hold it, it does so in the course of a business relationship, and it acts in the name and on behalf of another natural or legal person or legal arrangement that gives it instructions in that context. Version 3.0 clarifies the effective scope of Article 1(8)(b) around this third condition: a paid board seat falls within the definition only where someone stands behind the director and instructs them.

Who has to register under Article 7-2(1)

The same logic applies to registration for all five services. A natural or legal person must register as a TCSP with its supervisory authority or self-regulatory body when it provides one or more of the services in Article 1(8)(a) to (e), does so in the course of a business relationship and acts in the name and on behalf of another person or arrangement that gives it instructions.

Natural persons do not have to register when the services are provided in their private life and not as part of a business relationship, when they act as employees of a TCSP and on its behalf, or when they act on behalf of a public authority. Employee representatives who sit on the board of the company where they represent staff are also outside the registration duty.

Natural persons on the board

The table of typical cases starts with individuals sitting on the board of a company, meaning the statutory management body such as the board of directors or management board of a public limited company or the managers of a private limited company. An individual who sits on a board in their own name and for their own account is not a TCSP, because no third party gives instructions. An individual who sits on a board in their own name but on behalf of a client is a TCSP, because they act for a third party that instructs them.

Individuals representing the Luxembourg State on a board under the Law of 25 July 1990 and staff representatives under Articles L. 426-1 and following of the Labour Code are not TCSPs. The same answers apply when a director has set up a one-person company to receive their fees, provided that the director holds 100% of its capital, is its sole manager and is its sole beneficial owner. The principles should also apply, with the necessary adjustments, to non-profit associations and foundations.

Director-placement firms and corporate directors

The second group of cases concerns legal persons that provide directors. A firm that places one or more of its employees on the board of a client company is a TCSP because of the service it offers, while the employees themselves are not TCSPs. The contract may provide that the firm proposes a replacement if a mandate ends, and the director may be paid directly by the client company or through the firm.

A firm whose business is to assist directors, for example by acting as intermediary between independent directors and companies seeking board members, is also a TCSP. It facilitates the provision of directors and may be paid by the client company or by the directors. In this case the directors it introduces, who are not its employees, are TCSPs as well, because they act in the name and on behalf of a third party that gives them instructions. Business introducer agreements and other contractual set-ups do not change that result.

Where a legal person itself sits on the board of a client company, it must appoint a permanent representative, typically an employee, manager or authorised signatory. Whether the legal person is a TCSP depends on whether it acts in its own name and for its own account, in which case it is not, or in the name and on behalf of a third party that instructs it, in which case it is. The permanent representative is not a TCSP. The examples do not cover services to companies supervised by the CSSF or the CAA, for which specific rules apply.

Practical consequences for directors and their firms

For independent directors, the clarified scope comes with a test they should document. An individual who sits on boards in their own name, for their own account and without instructions from anyone other than the company is outside the definition, even when paid through a one-person company. As soon as a client, a promoter, an introducer or a group entity stands behind the appointment and gives instructions, the director is a TCSP, must register and must apply the full AML/CFT framework, including customer due diligence on the person instructing them.

Director-placement firms and intermediaries should check whether their model makes them, their directors or both TCSPs, and whether registration with the right supervisor is in place. Business centres, accountants, auditors and lawyers offering board services should map each mandate against the three conditions and keep the analysis on file. Luxembourg’s national risk assessment treats TCSPs as a high-risk sector, and directorship and nominee services are one way to put a formally compliant board in front of a hidden beneficial owner and the funds that person moves through the company.

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