Determination of Beneficial Ownership for Registration with the Luxembourg RBE

2. Definition (1/2)

2. Definition (2/2)

• Foundations

For foundations, the beneficial owners are any natural persons performing functions equivalent or similar to those referred to in point (b) of Article 1(7) of the AML/CFT Law in relation to trusts, namely:

• the constituent (founder);
• any other natural person exercising ultimate control over the trust by direct or indirect ownership or by other means.

Only foundations governed by Luxembourg law fall within this definition for the purposes of the Law of 13 January 2019. Trusts and “other legal arrangements” are the subject of a separate legislative proposal (Bill No. 7216).

Accordingly, the founder and the members of the board of directors of the foundation must be declared to the RBE.

• Clarifications regarding trustees, fiduciaries and beneficiaries

As regards the functions of “trustee or fiduciary” and “protector”, also mentioned in point (b) of Article 1(7) of the AML/CFT Law, this information is not relevant for foundations governed by Luxembourg law and therefore does not have to be registered in the RBE.

Similarly, as regards the category of “beneficiaries or, where the persons who will be the beneficiaries of the construction or legal entity have not yet been designated, the category of persons in whose main interest the construction or legal entity was established or operates”, also referred to in point (b) of Article 1(7) of the AML/CFT Law, this information is likewise not relevant for Luxembourg law foundations. Their registration in the RBE is therefore not required in this respect, as such foundations are of public utility and general interest.

• Listed companies

Article 3(2) of the Law of 13 January 2019 establishing a Register of Beneficial Owners provides that companies whose securities are admitted to trading on a regulated market in the Grand Duchy of Luxembourg, or on a regulated market in an equivalent country, must enter in the Register only the name and the country of the regulated market on which their securities are listed.

3. Methodology (1/6)

• The suggested approach for identifying the beneficial owners of a registered entity, excluding foundations (see below), is based on a step‑by‑step analysis:
• 1. Determine the percentage of ownership of the capital; and
• 2. Identify the persons who ultimately exercise control over the entity, whether through voting rights or by other means;
• 3. If the 2 previous steps do not determine a beneficial owner, the senior management official(s) is/are considered to be the beneficial owner.
• The assessments in steps 1 and 2 must be carried out in parallel, not one after the other and not in a way that excludes one criterion in favour of the other.

3. Methodology (2/6)

Step 1: Quantitative approach (1/2)

Calculate the percentage of ownership of the capital.

This is a purely quantitative, “mathematical” assessment of the ownership criterion: it requires identifying who owns the capital and in what proportion. Where the shareholding structure involves several layers of indirect ownership, the percentage of capital ultimately held by each individual must be calculated by combining the various indirect holdings — i.e. a weighted calculation of the respective share percentages.

If a natural person ultimately holds more than 25% of the capital, that person is deemed to be a beneficial owner under the above‑mentioned law and must therefore be recorded in the RBE. However, if a natural person holds less than 25% of the capital, that person should not automatically be excluded, as they may still qualify as a beneficial owner under the separate notion of “control” described below.

3. Methodology (3/6)

Step 1: Quantitative approach (2/2)

Example of capital ownership percentage calculation

3. Methodology (4/6)

Step 2: Qualitative approach (1/2)

• Determine the persons who effectively control the entity either through voting rights or through other means.

3. Methodology (5/6)

Step 2: Qualitative approach (2/2)

Example of controlled percentage calculation

3. Methodology (6/6)

Step 3

4. Illustrative diagrams (1/19)

A. Direct holding (1/2)

4. Illustrative diagrams (2/19)

A. Direct holding (2/2)

4. Illustrative diagrams (3/19)

A. Indirect holding (1/4)

4. Illustrative diagrams (4/19)

A. Indirect holding (2/4)