Luxembourg companies will have to publish information regarding their beneficial owners by the end of August to comply with the law of 13 January 2019 creating the Beneficial Ownership Register. But STEP Benelux, part of the worldwide advisory and lobbying organisation of lawyers, accountants, family officers, and bankers whose professional interest is in advising families in succession matters, argues that listing in all cases all the persons who have a relationship with a trust that controls a company is the wrong approach.

Paolo Panico, chairman of STEP Europe and Deputy Chair of STEP Benelux, and Andrew Knight, member of the STEP Benelux board, launched a position paper on the subject of trust controlled companies on 26 July at the Hotel Royal.

In a press statement issued after the position paper presentation, STEP Benelux explains that trusts are a preferred legal arrangement for family succession, which can rely on centuries of experience in the Anglo-Saxon world. They have been recognised in Luxembourg since 2004, and can accordingly be used to control shares in a Luxembourg company.

However, the law governing the Beneficial Ownership Register makes no mention of how and who should be listed on the register in cases where a Luxembourg company is controlled by a trust, nor is there any mention of such cases in any of the circulars and guidelines issued so far by the Register, STEP claims in the statement.

Indeed, the law cites a previous law, dating from November 2004, on the fight against money laundering and terrorist financing. This law provides two tests: a "quantitative" one (people owning more than 25% of a company's capital or voting rights) and a "qualitative one" (people who can exercise control "by any other means").

STEP Benelux’s position paper on the approach to be taken to publish in the Beneficial Ownership Register suggests applying these criteria based on the specific case of each trust. In other words, the managing directors of a company acting as trustee must always be indicated as beneficial owners of the company controlled by a trust. “If there are beneficiaries with a fixed interest in excess of 25% of the company they also qualify as beneficial owners,” the paper argues. “If some persons, such as the settlor or a protector, have the power to replace the trustee, or to appoint or exclude the beneficiaries, they are also beneficial owners. On the other hand, STEP Benelux considers that listing in all cases all the persons who have a relationship with the trust is not a correct approach.”