Luxembourg Clarifies Beneficial Ownership Disclosure Rules for Companies Owned by Trusts and Foundations

The Luxembourg registrar has issued clarifications on how to identify and disclose a company’s beneficial owners when the company is owned by a trust or foundation. The new recommendations are important not only for the founders and managers of such structures, but also for companies whose banking and corporate services depend on up-to-date information about their ultimate beneficial owners.

We explain who must be disclosed, which register the information must be submitted to, and what owners of existing structures should check.

Which Registers Operate in Luxembourg

When dealing with Luxembourg structures, it is important to distinguish between two registers:

• RBE, or Registre des bénéficiaires effectifs, contains information about the beneficial owners of Luxembourg companies and other legal entities
• RFT, or Registre des fiducies et des trusts, is intended for information about trusts and fiduciary arrangements

The new clarification from Luxembourg Business Registers primarily concerns situations where a Luxembourg company is owned by a trust or foundation. In such cases, it is not sufficient to list only the company’s direct shareholder in the RBE: the natural persons behind the relevant structure must be identified.

In other words, the ownership chain should not stop at the name of a trust, foundation, or corporate trustee. The company must establish which natural persons ultimately benefit from or control the structure.

Who Must Be Considered a Beneficial Owner

As a general rule, a company’s beneficial owner is a natural person who directly or indirectly holds a sufficient ownership interest, has voting rights, or controls the company by other means.

If a company is owned by a trust or foundation, the persons who must be disclosed are determined based on the governance structure and the distribution of rights within that arrangement.

The RBE may require information about the following persons:

• the settlor of the trust or founder of the foundation
• the trustee, fiduciary, or other manager
• the protector, if such a role is provided for in the structure’s documents
• current beneficiaries
• potential beneficiaries or the class of persons for whose benefit the structure was established
• other natural persons exercising ultimate control directly, indirectly, or by other means

A person’s title or role does not always provide a complete answer. It is necessary to consider the founding documents, the powers of the participants, the procedures for appointing and replacing managers, the right to issue binding instructions, the distribution of assets, and other mechanisms of control.

For example, a person may not directly own an interest in a company but may have the right to appoint a manager, block decisions, or determine how assets are disposed of. Such powers may also be relevant when establishing ultimate control.

What Information Must Be Submitted

The information required depends on the specific register and the person’s status. As a general rule, the following information must be prepared for a beneficial owner:

• first and last name
• nationality or multiple nationalities
• date and place of birth
• country of residence
• full address
• identification number or details of an identity document
• description of the nature of the ownership interest
• extent of the ownership interest or other property rights
• the basis and manner in which control is exercised

It is important not only to collect the required information but also to ensure its consistency across all documents. Information in the RBE or RFT must not contradict the corporate register, trust documents, bank questionnaires, ownership structure, or information previously provided to local service providers.

Discrepancies in addresses, nationalities, names of participants, or descriptions of control may lead to additional verification.

What Is the Deadline for Updating Information

Beneficial ownership information must be kept up to date. If the composition of participants, address, nationality, nature of control, or other registered information changes, an update must generally be submitted within one month of the relevant event.

This deadline is also relevant for existing structures. The publication of new guidance does not mean that all companies must automatically create a new entry. However, companies owned by trusts or foundations should check whether the information previously submitted is consistent with the registrar’s current approach.

Particular attention is required if only the trustee or corporate manager is listed in the RBE, if the settlor, protector, or certain categories of beneficiaries have not been disclosed, or if the structure includes multiple layers of companies, foundations, or trusts. A review is also necessary where actual control differs from formal ownership or where participants, managers, or asset distribution arrangements have changed since the initial registration.

How Information Is Verified

The registrar may check the completeness and internal consistency of submitted information at the time of registration. Therefore, simply completing the application without analyzing the structure may not be sufficient.

The company may be asked to provide explanations or documents confirming:

• the ownership chain
• the status and powers of each participant
• the manner in which control is exercised
• the grounds for including a person among the beneficial owners
• the reasons why a particular person was not listed in the register

The company must be able to explain not only whom it has listed but also how it reached that conclusion.

For this purpose, it is useful to retain an internal beneficial ownership assessment, an up-to-date structure chart, and copies of the documents used to determine which persons must be disclosed.

What Are the Consequences of Outdated Information

Luxembourg has been consistently strengthening its oversight of the accuracy and currency of information in corporate registers. If violations are detected, the company may first be asked to update its information.

A fine of EUR 40 per day does not apply immediately after the one-month deadline has been missed. It relates to a separate procedure for enforcing compliance with registration requirements and may be imposed at a later stage if the company continues to ignore the registrar’s request.

If the requirements remain unfulfilled for an extended period, the entry may be removed from the register through an administrative procedure. However, such removal does not in itself mean the automatic liquidation of the company or the termination of its legal personality. Nevertheless, it may significantly complicate corporate actions, banking services, and dealings with counterparties.

Does This Mean the End of Trust Confidentiality

A trust or foundation should not be regarded as a tool that allows the ultimate beneficial owner to be concealed from the registrar, a bank, or another entity subject to AML requirements.

At the same time, disclosure of information in the register does not mean that the state gains the ability to automatically track all assets held by the structure and every movement of funds. Nor does it mean that the full scope of information becomes unconditionally accessible to anyone.

The new clarifications strengthen transparency for government authorities and professional entities that have lawful grounds for accessing the information. Their purpose is to ensure that specific natural persons who benefit from or exercise control over a structure can be identified behind the legal arrangement.

Therefore, the changes do not in themselves constitute grounds for urgently transferring a trust to another jurisdiction. A decision on restructuring must take into account the tax consequences, the participants’ places of residence, the location of assets, banking infrastructure, inheritance rules, and the objectives of the structure itself.

What Owners of Existing Structures Should Check Now

Companies with a Luxembourg connection are advised to:

1. Prepare an up-to-date ownership and control structure chart down to the level of natural persons.
2. Determine which information must be included in the RBE and which information belongs in the RFT.
3. Review the settlor or founder, trustees or managers, protector, beneficiaries, and other persons with control powers.
4. Compare the information in the registers with corporate, trust, and banking documents.
5. Ensure that changes made during the most recent period were submitted within the prescribed deadline.
6. Prepare documents explaining the basis of control exercised by each disclosed person.
7. Check whether information also needs to be updated with the bank, registration agent, or another service provider.