LUXEMBOURG Law and Practice Contributed by: Anna Gassner, Philipp Mössner, Andrea Carraretto and Etienne Weryha, GSK Stockmann SA
scrutiny alongside any notifications required under the FDI Law. 3.5 Listed Companies and Market Disclosure Rules The mere fact that a listed company (ie, whose securi - ties are admitted to trading on a European regulated market), multilateral trading facility (MTF) or organised trading facility (OTF), participates in a JV in Luxem - bourg, will not lead to the applicability of specific rules in Luxembourg beyond those set out in the EU capital market directives and regulations applicable to listed companies in general. 3.6 Transparency and Ownership Disclosure Since the entry into force of the Law of 13 January 2019 establishing the Beneficial Owner Register, as amended, (the “RBE Law”), all legal entities registered with the RCS are required to disclose and submit information about their ultimate beneficial owner(s) (UBO(s)) to the Register of Beneficial Owners ( Regis- tre des bénéficiaires effectifs – RBE). Such information must be updated within one month of any change. To date, the RBE is only accessible by “professionals” as defined in Article 2 of the AML Law for the purposes of fulfilling their AML/KYC obligations, and by enti - ties registered with the RCS with respect to their own information. Under Luxembourg laws, a UBO is any natural person (more rarely a group of natural persons, as described below) who, ultimately, directly, or indirectly, owns or controls a legal entity (including by means of bearer shares), by a percentage of more than 25% of the shares, voting rights or an interest in the capital, or by other means. If, after all possible means, no UBO can be identified (and there are no grounds for suspicion), the natural person holding the position of principal executive officer of a legal entity is considered the UBO. In less common cases, a group of natural persons may also be collectively deemed UBOs of an entity if they together control at least 25% of this entity, such con - trol being considered as “by other means”. A control “by other means” exists when (i) members of a same family holding together more than 25% of the voting rights of an entity act in concert at general meetings,
or (ii) if shareholders holding equal voting percentages enter into a shareholders’ agreement whereby they act in concert at general meetings. 4. Legal Developments 4.1 Notable Recent Decisions or Statutory Developments Apart from the entry into force of the FDI Law and the ex ante merger control regime proposed by Draft Bill No 8296, there have been no significant court deci - sions or legal developments in the past three years relating to JVs or business collaborations. 5. Negotiating the Terms 5.1 Preliminary Negotiation Instruments and Practices Setting up a JV entails a multi-phase process for the participants. The negotiating phase of a JV typically involves: • the completion of a due diligence questionnaire focusing not only on the JV itself, its rationale or commercial goals, but also on the JV participants; • the execution of a mutual non-disclosure agree - ment (NDA); • the execution of a head of terms document, which is crucial as it sets forth the main commercial and legal terms the participants have agreed upon dur - ing the negotiation; and • in most cases, the execution of an exclusivity agreement prohibiting the parties from entering into negotiation with others for a restricted period of time. At a pre-JV agreement stage, the following provisions are typically contemplated and settled in the terms sheet: • the purpose and scope of the JV; • the financial contributions of each participant and
further funding opportunities; • the decision-making structure; • the management structure;
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