Who must register as third-country audit entity in Luxembourg?

Under Article 57 of the Law of 23 July 2016 concerning the audit profession (the "Audit Law"), every third-country audit entity is required to apply for registration with the CSSF if it audits the annual or consolidated accounts of a company incorporated outside the EU/EEA whose transferable securities are admitted to trading on the regulated market of the Luxembourg Stock Exchange, which is operated by Société de la Bourse de Luxembourg (Bourse de Luxembourg).

 
However, under the current legal framework in Luxembourg no registration is required if one of the following applies:

  • the company is an issuer exclusively of debt securities within the meaning of Article 2(1)(b) of Directive 2004/109/EC, prior to 31 December 2010 and, the denomination per unit of which is, at the date of at least EUR 50,000 or, in the case of debt securities denominated in another currency, equivalent, at the date of issue, to at least EUR 50,000;
  • the company is an issuer exclusively of debt securities within the meaning of Article 2(1)(c) of Directive 2004/109/EC from 31 December 2010 and the denomination per unit is, at the date of issue, at least EUR 100,000 or, in the case of debt securities denominated in another currency, equivalent, at the date of issue, to at least EUR 100,000.
  • the audit entity performing the audit of a company incorporated outside the EU/EEA is a registered audit entity already approved by the CSSF in accordance with the Audit Law or is approved in accordance with the Audit Directive by another EU competent authority to carry out audits of annual accounts or consolidated accounts.

What are the different classes of registration as a third-country audit entity?

Third-country audit entities are classified in three groups, according to the country in which they are established. The registration requirements and the regulatory regime that apply differ according to the country:

 

“Equivalent” Countries

 

Equivalence is assessed by the European Commission in cooperation with Member States. Pursuant to Article 46 of the Audit Directive, equivalence of third countries' regulatory systems is determined by the European Commission with regard to the comitology procedure provided for in the Audit Directive.
 
Commission Decision of 19 January 2011 (2011/30/EU) (as amended by Commission Decisions of 13 June 2013 (2013/288/EU), 25 July 2016 (2016/1223/EU) and of 14 July 2016 (2016/1155/EU)) determine that the following countries and territories are equivalent:

 

In respect of audits of financial statements for periods starting after 2 July 2010:

Australia

Canada

China

Japan

Singapore

South Africa

South Korea

Switzerland

United States of America 


In respect of audits of financial statements for periods starting after 31 July 2012

Abu Dhabi

Brazil

Dubai International Financial Centre

Guernsey

Indonesia

Isle of Man

Jersey

Malaysia

Taiwan

Thailand

 

In respect of audits of financial statements for periods starting after 31 July 2016:

Mauritius

New Zealand 

Turkey

 
“Transitional” Countries

 
Commission Decision of 19 January 2011 (2011/30/EU), as amended by Commission Decision of 25 July 2016 (2016/1223/EU) also exempts, for a transitional period, auditors of companies incorporated in certain third countries from most of the regulatory requirements of Article 45 of the Audit Directive, on the condition that they provide relevant Member States with specific information.

 
The following are transitional countries in respect of audits of accounts for periods beginning between 2 July 2010 and 31 July 2018.

Bermuda

Cayman Islands

Egypt

Russia


“Non-equivalent” Countries

 
Third-country audit entities that are established in countries that are neither “equivalent” nor “transitional” are subject to the full requirements of the Article 45 of the Audit Directive.