18 April 2024
CJEU ¦ Leasing Property is not enough: A narrowing Line in the EU’s AML Framework
Leasing Property Is Not Enough: EU Court Clarifies Who Counts as a “Company Service Provider” Under AML Rules
The Court of Justice of the European Union (CJEU) has drawn an important boundary in the EU’s anti–money laundering architecture. In Case C‑22/23, decided on 18 April 2024, the Court held that a property owner who leases space to companies and allows those tenants to register their statutory seat at that address does not, by that fact alone, qualify as a “trust or company service provider” under Article 3(7)(c) of Directive (EU) 2015/849 (as amended by Directive (EU) 2018/843).
Why this matters for AML compliance
At stake was whether landlords who provide premises used as a registered office are captured as obliged entities under the EU AML regime. That classification would trigger due diligence, reporting, and other compliance obligations. The Court’s answer is clear: simply leasing property — even where the tenant registers its company seat at that property — does not convert the landlord into a company service provider.
The case: leasing versus corporate service provision
The dispute originated in Latvia, where Citadeles nekustamie īpašumi SIA was fined for allegedly failing to comply with AML obligations applicable to “providers of services relating to the establishment and operation of legal arrangements or legal persons”. The State Tax Authority argued that by consenting in the lease to tenants registering their company seat at the premises, Citadele was providing a service covered by Article 3(7)(c). Citadele pushed back, noting it merely managed and leased its own properties and provided no additional services beyond standard leasing terms.
What Article 3(7)(c) actually covers
Directive (EU) 2015/849, as amended, defines a “trust or company service provider” to include “any person that, by way of its business, provide […] to third parties”, inter alia, “a registered office, business address, correspondence or administrative address and other related services for a company, a partnership or any other legal person or arrangement”.
The Court emphasized several points:
- Providing a registered office or business/correspondence/administrative address is a corporate service that typically involves making available a point of contact for professional and administrative purposes. It commonly goes hand-in-hand with additional services, such as handling correspondence or administrative documents.
- A standard lease, even where the landlord consents to the use of the address as the registered office, is a different transaction. Leasing is, in principle, a commitment to make premises available for rent. It does not inherently include the “other related services” contemplated by Article 3(7)(c).
- The conjunction “and” in the phrase “and other related services” matters: classification turns on more than just the address. Simply enabling an address to be used as a registered office, without accompanying corporate administration, is not enough.
No implicit link to real estate transactions
The Court also looked at the broader AML framework. Notaries, other independent legal professionals, and estate agents are listed as obliged entities in the Directive when they participate in real estate transactions or high-value lettings. By contrast, company service providers are treated separately and are not tied to real estate activity. The EU legislature did not designate landlords, generally or conditionally, as obliged entities under Article 2(1). This supports the conclusion that leasing, as such, is not a company service.
Risk-based flexibility remains — with conditions
Member States still have room to expand coverage. Article 4 permits extension of AML obligations to professions or categories of undertakings engaged in activities particularly likely to be used for money laundering or terrorist financing, and Article 5 allows stricter national rules, within EU law limits. However, such extensions must be explicit and notified to the European Commission. In the Latvian context, the Court noted that, based on the information before it, Latvia had not extended the scope to landlords in the circumstances at issue, nor adopted stricter provisions capturing them solely by virtue of consenting to registered office use.
The holding
The Court concluded that a leasing owner of real estate in which a lessee registers its registered office and carries out transactions does not, by that fact alone, fall within the scope of the concept of a “trust or company service provider” under Article 3(7)(c). Because of that answer, the Court did not address the secondary question concerning whether natural persons who lease property would have to meet the same requirements as legal persons.
Practical takeaways for landlords and tenants
- Landlords across the EU are not automatically obliged entities under AML law simply because their tenants use the premises as a company seat.
- If a landlord goes beyond leasing and offers corporate administration — such as mail handling, registered office services marketed as a business, or similar “related services” — they may cross into company service provider territory.
- National variations matter. Check whether your Member State has adopted stricter rules or extended the Directive’s scope to certain leasing models or address service activities.
Compliance implications for the AML community
For AML compliance teams, this judgment refines the risk classification of address-based services. It distinguishes pure property leasing from corporate service provision and avoids accidental overreach that could dilute supervisory focus. At the same time, it flags that address services bundled with administrative support are squarely within AML oversight, underscoring the need for accurate service mapping in vendor and counterparty risk assessments.
Bottom line
The CJEU has set an important guardrail: an address used as a registered office does not, on its own, trigger AML obligations for the landlord. The decisive factor is whether the business provides corporate address services with “other related services” to third parties. Where it does, AML obligations apply; where it does not, a standard lease remains just that — a lease.
Implications
However, classifying activities under the national transposition of the AMLD is not a straightforward process; it requires consideration of all elements of the legal and factual context. It is especially important to analyse whether a Member State has gold-plated the Directive, as the following section illustrates.
Belgium
Article 3(7)(c) of the Anti-Money Laundering Directive (AMLD) has been transposed into Belgian law as Article 5, 29° of the Act of 18 September 2017 on the prevention of money laundering and terrorist financing, and the restriction of cash use (the Belgian Anti-Money Laundering Act).
Art. 5, 29° of the Belgian AML Act must be read together with Art. 3, 1° of the Act of 29 March 2018 on the registration of service providers to companies, which states:
“Art. 3. Pour l’application de la présente loi, il y a lieu d’entendre par:
1° “prestataire de services aux sociétés”: toute personne physique ou morale qui fournit, à titre professionnel, l’un des services suivants à des tiers:
a) participer à l’achat ou la vente de parts d’une société à l’exclusion de celles d’une société cotée;
b) fournir un siège statutaire à une entreprise, une personne morale ou une construction juridique similaire;
c) fournir une adresse commerciale, postale ou administrative et d’autres services liés à une entreprise, à une personne morale ou une construction juridique similaire;”
“Art. 3. For the purposes of this Act, the following definitions shall apply:
1° “corporate service provider”: any natural or legal person who, on a professional basis, provides any of the following services to third parties:
a) participating in the purchase or sale of shares in a company, excluding those of a listed company;
b) providing a registered office for a company, legal entity, or similar legal arrangement;
c) providing a business, postal, or administrative address and other services related to a company, legal entity, or similar legal arrangement;”*
(This translation is not official; the only authentic text is the one as published by the Service Public Fédéral Justice.)
Thus, the Belgian legislator decided to impose stricter rules, stating that companies that merely provide a registered office (without offering other related services) fall within the scope of the AML Act. In line with the AMLD, companies that provide a business, postal, or administrative address will only fall within the scope of the Act if they also provide other related services.
Due to the Belgian ‘gold-plating’ of Article 3(7)(c) of the AMLD, the above judgement will likely not be relevant when interpreting the transposed provision in the Belgian AML Act.
Furthermore, please note that individuals or organisations that engage professionally in financial leasing activities involving moveable or immoveable goods are obliged entities within the scope of the Belgian AML Act (Article 5, Section 22 of the Belgian AML Act):
“22° les personnes physiques ou morales, établies en Belgique, qui exercent au moins l’une des activités visées à l’article 4, alinéa 1er, 2) à 12), 14) et 15), de la loi du 25 avril 2014 relative au statut et au contrôle des établissements de crédit, sans être déjà assujetties à ce titre sous l’un des points 4° à 21°, ainsi que les succursales en Belgique de personnes exerçant des activités équivalentes relevant du droit d’un autre Etat membre, qui sont désignées par le Roi;”
“22° natural or legal persons, established in Belgium, who carry out at least one of the activities referred to in Article 4, paragraph 1, 2) to 12), 14) and 15), of the Law of April 25, 2014 on the status and supervision of credit institutions, without already being subject to this provision under one of points 4° to 21°, as well as branches in Belgium of persons carrying out equivalent activities under the law of another Member State, which are designated by the King;”
Germany
The provision of Article 3(7)(c) of the Anti-Money Laundering Directive (AMLD) has been implemented in Section 2(1), No. 13 c) of the German Anti-Money Laundering Act (GwG), which does not differ from the European provision.
The mere letting of office space, including furnished office space, does not fall under Section 2(1), No. 13 c) of the Money Laundering Act (GwG), which states:
“Dienstleister für Gesellschaften und für Treuhandvermögen oder Treuhänder, die nicht den unter den Nummern 10 bis 12 genannten Berufen angehören, wenn sie für Dritte eine der folgenden Dienstleistungen erbringen:
c) Bereitstellung eines Sitzes, einer Geschäfts-, Verwaltungs- oder Postadresse und anderer damit zusammenhängender Dienstleistungen für eine juristische Person, für eine Personengesellschaft oder für eine Rechtsgestaltung nach § 3 Absatz 3,”
“Service providers for companies and for trust assets or trustees who do not belong to the professions listed under numbers 10 to 12, if they provide one of the following services for third parties:
c) Provision of a registered office, business, administrative, or postal address and other related services for a legal entity, partnership, or legal arrangement pursuant to Section 3 (3),”
(This translation is not official; the only authentic text is the German one as published in the Federal Law Gazette (Bundesgesetzblatt).)
Under German law, a “service provider” is a natural or legal person who performs activities for a third party — the service recipient — on the basis of contractual, statutory, or other obligations.
Definition and distinction from private letting: Commercial letting occurs when a property is let to an extent that goes beyond the mere management of one’s own assets. This is often the case when letting vacation homes, commercially used properties, or when additional services are offered.
Latvia
Chapter I, Section 1.(1) No. 10 of the Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing [LV, EN], as amended, defines:
“juridiska veidojuma vai juridiskas personas dibināšanas un darbības nodrošināšanas pakalpojumu sniedzējs — fiziskā vai juridiskā persona, kurai ir darījuma attiecības ar klientu un kura sniedz šādus pakalpojumus:
c) nodrošina juridisku veidojumu vai juridisku personu ar juridisko adresi, adresi pasta sūtījumu saņemšanai, darījuma norises vietas adresi, kā arī sniedz citus līdzīgus pakalpojumus,
“provider of services for the establishment of a legal arrangement or legal person and securing its operation - a natural or legal person having a business relationship with the customer and providing the following services:
c) provides a registered office, correspondence address, business address for a legal arrangement or a legal person and also provides other related services;
As ruled by the CJEU, it follows that the mere letting of office space does not fall under Chapter I, Section 1.(1) No. 10 of the Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing.
Luxembourg
Initially, Luxembourg did not gold-plate the AMLD and literally included within the list of obliged subjects ‘persons who, for business purposes, provide a registered office, business address, correspondence address, administrative address and other related services for a company, partnership or other legal person or arrangement’ (Article 1(8)(c) of the Law of 2004). However, the law of Law of 29 July 2022 added «where applicable», meaning that the amended Law of 2004 now defines a ‘trust or company service provider’ as follows:
“Par “prestataire de services aux sociétés et fiducies” au sens de la présente loi, est désignée toute personne physique ou morale qui fournit, au titre d’une relation d’affaires, l’un des services suivants à des tiers:
c) fournir un siège statutaire, une adresse commerciale, administrative ou postale ou des locaux professionnels et «, le cas échéant,» tout autre service lié à une société, à une société de personnes, à toute autre personne morale ou à toute autre construction juridique similaire;”
“Trust and company service providers” shall, in accordance with this law, mean any natural or legal person which by way of a business relationship provides any of the following services to third parties:
c) providing a registered office, business address, correspondence or administrative address or business premises and «, where applicable,» other related services for a company, a partnership or any other legal person or arrangement;”
(This translation is not official; the only authentic text is the one as published in the Journal officiel du Grand-Duché de Luxembourg)
The difference is fundamental: “And” is a conjunction that connects two parts of a sentence or words of equal rank and expresses an addition, while “if applicable” is an adverb that describes a possibility or condition – i.e., “if that is the case,” “under certain circumstances”, or “then”.
As the word “and” was supplemented with “if applicable”, gold-plating must now be assumed; otherwise, this addition would be redundant (i.e. meaningless). This is especially the case since weakening the wording of the AML Directive 2015/849 is not possible under European law. For this reason alone, only tightening the rules can be considered; apart from the possibility that the legislator did not intend to make any changes but nevertheless added to the text.
Looking ahead
Article 2 No. 11 of Regulation (EU) 2024/1624 defines ‘trust or company service provider’ as
“any natural or legal person that, by way of its business, provides any of the following services to third parties:
(a) the formation of companies or other legal persons;
(b) acting as, or arranging for another person to act as, a director or secretary of a company, a partner of a partnership, or a similar position in relation to other legal persons;
(c) providing a registered office, business address, correspondence address or administrative address, as well as other related services for a company, a partnership or any other legal person or legal arrangement;
(d) acting as, or arranging for another person to act as, a trustee of an express trust or performing an equivalent function for a similar legal arrangement;
(e) acting as, or arranging for another person to act as, a nominee shareholder for another person;”
Note that ‘and’ has been replaced by ‘as well as’.
As a reminder, under AML Directive 2015/849, the conjunction “and” in the phrase “and other related services” matters: classification turns on more than just the address. Simply enabling an address to be used as a registered office, without accompanying corporate administration, is not enough. “And” is a simple conjunction that connects elements of equal importance.
Under Regulation (EU) 2024/1624, “as well as” functions like a preposition or conjunction to mean “in addition to”, placing a greater emphasis on the element that comes before it. So “providing a registered office, business address, correspondence address or administrative address” becomes more important than “other related services”.
Dive deeper
- InfoCuria ¦ Case C‑22/23 ¦ Link
What else?
