KYC (Know Your Customer) in Luxembourg is a legal obligation for businesses in regulated sectors. It requires companies to verify the identity of their clients, ensure the legitimacy of funds, and comply with AML (Anti-Money Laundering) and CFT (Countering the Financing of Terrorism) regulations.
For accountants, incorporation specialists, and liquidation service providers, a robust KYC framework is essential to comply with Luxembourg law and to maintain trust with clients, banks, and regulators.
KYC refers to the process of verifying a client’s identity before entering a business relationship or conducting significant transactions. In Luxembourg, KYC is regulated by:
The Law of 12 November 2004 on the fight against money laundering and terrorist financing (as amended)
EU AML Directives (AMLD5 and AMLD6)
CSSF (Commission de Surveillance du Secteur Financier) circulars and guidance
Businesses must collect, verify, and securely store client data, making it available for inspection by regulators when required.
Licensed accountants in Luxembourg have a legal duty to perform KYC checks before onboarding clients. This includes:
Identifying beneficial owners of companies
Verifying the source and legitimacy of funds
Monitoring ongoing transactions for suspicious activity
Failure to comply can lead to fines, legal sanctions, and reputational damage. Strong KYC processes protect both the accountant and the client.
When incorporating a company in Luxembourg, KYC is mandatory. The process includes:
Client identification: passport or ID card
Proof of address: recent utility bill or official document
Source of funds: evidence for initial capital contributions
Beneficial ownership declaration: mandatory under the RBE (Registre des Bénéficiaires Effectifs)
Example: when setting up a SOPARFI (Société de Participations Financières), accountants must complete a full KYC file before filing with the Luxembourg Business Register (RCS).
KYC checks are also required during liquidation:
Voluntary or simplified liquidation: liquidators must verify shareholders and creditors
Payments to beneficiaries: must be validated against account ownership
Suspicious transactions: reported to the CRF (Cellule de Renseignement Financier)
This ensures that liquidation processes remain fully compliant with AML laws.
Step 1: Data Collection
Passport or ID card
Proof of residence
Incorporation documents (if applicable)
Step 2: Compliance Verification
Screening against official databases
Sanctions and PEP (Politically Exposed Persons) lists
Step 3: Ongoing Monitoring
Continuous review of transactions
Updating client records as needed
Implementing a robust KYC system in Luxembourg:
Protects against fraud and financial crime
Ensures compliance with local and EU law
Builds trust with banks, regulators, and clients
Speeds up incorporation, liquidation, and account opening
Our licensed firm integrates KYC across all services:
Accounting Services: bookkeeping, payroll, VAT registration, annual accounts, LUX GAAP & IFRS reporting
Company Incorporation: SARL, SARL-S, SA, SOPARFI, SPF, RCS & RBE filings, business licence applications
Liquidation Services: voluntary liquidation, simplified dissolution, judicial liquidation support
AML & Compliance Support: beneficial ownership verification, AML reporting, sanctions screening
"In Luxembourg, KYC is not a box-ticking exercise. It is a cornerstone of accounting, incorporation, and liquidation services. A robust identity verification process protects businesses, ensures compliance, and strengthens Luxembourg’s reputation as a transparent and trusted financial hub."
Mickaël LOC, Managing Director, Financial Services Luxembourg
Our role as a professional always start with KYC. Here an article about us in Le Figaro:
Financial Services Luxembourg – Expert in Company Creation and Accounting Services
Ensure your business is fully compliant with KYC Luxembourg, AML regulations, and identity verification requirements.
Contact our licensed accountants today for support with company incorporation, ongoing accounting, or liquidation services with compliance guaranteed at every step.