LUXEMBOURG Law and Practice Contributed by: Marcus Peter and Kate Yu Rao, GSK Stockmann SA
tutes a violation of the Charter of Fundamental Rights of the EU (the “CJEU Ruling”). Following the CJEU Ruling, the European Directive 2024/1640 (AMLD VI) was introduced to limit access to the RBO only to certain individuals and entities, such as competent authorities, self-regulatory bodies, obliged entities and persons demonstrating a legitimate interest. Sub - sequently, Luxembourg amended its RBO Law on 23 January 2025 (effective from 1 February 2025) to align with the updated EU legal framework. It is also worth reminding that as from 12 Novem - ber 2024, all natural persons must include their Lux - embourg national identification number (LNIN) when being registered with the RCS. For residents of Lux - embourg, the LNIN corresponds to their social secu - rity number. Non-residents, such as foreign managers who do not already have an LNIN, must apply for one The recent implementation of Regulation (EU) 2019/2088 of 27 November 2019 on sustainability- related disclosures in the financial services sector (SFDR) and Regulation (EU) 2020/852 of 18 June 2020 on the establishment of a framework to facili - tate sustainable investment (the “Taxonomy Regula - tion”) led to an increasing impact of ESG matters in the M&A market in the Grand Duchy, especially due to the importance of the Luxembourg investment fund industry on M&A transactions. The implementation of effective environmental, social and governance (ESG) policies and strategies by target companies is likely to influence their attractiveness, and will, in practice, enhance due diligence procedures as investors aim to ensure that companies comply with ESG standards and disclosure requirements. The Taxonomy Regulation and the SFDR have been subject to substantial changes over the past few years. For instance, the European Commission Del - egated Regulation (EU) 2022/1288 (RTS SFDR), appli - cable as of 1 January 2023, provides for more detailed disclosure requirements under the SFDR, with pre - scribed-form reporting templates for Articles 8 and 9 SFDR funds, as well as technical guidance on the obligations under the Taxonomy Regulation and the SFDR. Moreover, starting from 1 January 2023, cer - before completing their RCS registration. Environmental, Social and Governance
tain gas and nuclear activities, upon satisfaction of strict requirements, are being introduced among the transitional activities contributing to climate change mitigation, therefore being subject to the disclosure provisions under the Taxonomy Regulation and to additional disclosure requirements for companies operating in such sectors. Further implementation of substantial and technical aspects of these regulations is currently being discussed, demonstrating the EU’s active efforts to enhance sustainability standards and practices in the financial sector. On the same topic, the Corporate Sustainability Reporting Directive (CSRD) entered into force on 5 January 2023 with the aim of developing a more standardised approach to sustainability reporting across the EU. Among other things, the CSRD requires large companies operating in the EU, as well as listed SMEs and non-EU companies with substantial activi - ties in the EU, to disclose information on the impact of their business on people and the environment and their ESG performance in annual financial reports. The CSRD focuses on the “double materiality” approach, which requires affected companies to assess and report the reciprocal impact between their operations and ESG-related risks and impacts. The first CSRD reporting deadline was 1 January 2025, covering the 2024 financial year, for compa - nies previously subject to the Non-Financial Reporting Directive (NFRD). Companies not previously covered by the NFRD, including certain large corporations, must comply for the 2025 financial year, with their first reports due by 1 January 2026. Moreover, on 5 July 2024, the Corporate Sustainability Due Diligence Directive (CSDDD) was published in the Official Journal of the EU, and came into force on 25 July 2024. The CSDDD aims to introduce a sustain - ability due diligence obligation for large EU compa - nies and non-EU companies with significant EU activi - ties to conduct human rights and environmental due diligence to identify their sustainability impacts and, where adverse actual or potential risks are identified, to take appropriate measures to prevent and mitigate such impacts. The CSDDD will come into force gradu - ally, with the first group of companies (ie, companies with more than 5,000 employees and a net turnover
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