- Definition of a "beneficial owner"
- Access to the Register of Beneficial Owners;
- Obligation on New companies;
- Obligation on Existing Companies;
- Register of Beneficial Owners; and
As from 1st January 2018, a new regulation in relation to the Register of Beneficial Owners (Companies Act) came into force. The regulation brings with it new obligations for local companies, including, partnerships, foundations, trusts and associations, unless these are exempt, to disclose the ultimate beneficial owner/s (physical person). Such information needs to be disclosed to:
- The Malta Business Register in case of companies;
- The Malta Financial Services Authority (MFSA) in case of trusts; and
- The Registrar for Legal Persons in case of associations and foundations.
These regulations do not apply to:
- A company which is listed on a regulated market; and
- A company whose registered shareholders are exclusively natural persons (not acting in a fiduciary capacity) who are disclosed in the public records at the register of commercial partnerships maintained by the Registrar of Companies.
Definition of a "beneficial owner"
A beneficial owner includes any natural person or persons who:
(i) Ultimately own or control, whether through direct or indirect ownership or control, including, where applicable, through bearer share holdings, more than 25% of the shares or voting rights in that company; or
(ii) Otherwise exercise control over the management of that company.
In the eventuality that no individuals satisfy the above criteria, then the law sets out other criteria to determine the beneficial owner(s).
The information on the beneficial owners of a company held by the Registrar in the register of beneficial owners shall, be accessible to:
- National relevant competent authorities;
- Persons subject to obligations relating to the prevention, combating and detection of money laundering and combating of financing of terrorism; and
- Other persons and organisations who submit a written request and show a legitimate interest in the information they seek to access.
As from 1st January 2018 the documents to be delivered to the Registry of Companies for the registration of a new company are to include a declaration, in the form prescribed (Form BO1), containing information on the beneficial owners of the company. This declaration is to be signed by two of the proposed directors of the company unless the company will have one director. The information, in respect of each beneficial owner, shall consist of the name, the date of birth, the nationality, the country of residence, an official identification document number indicating the type of document and the country of issue, and the nature and extent of the beneficial interest held.
Where a proposed company has no identifiable beneficial owner/s, the Registrar will accept a declaration to this effect, signed as aforesaid.
Obligation on Existing Companies
Existing companies registered in Malta prior to 1st January 2018 has to deliver to the Registrar a declaration by means of Form BO3 as follows:
(i) within forty two days of the company’s anniversary date, or
(ii) within fourteen days after the date on which a change in beneficial ownership is recorded with the company, as the case may be.
Following such first notification to the Registrar of Companies, any subsequent change in the beneficial ownership is to be given by means of Form BO2.
Besides the above obligations, companies and other commercial partnerships registered in Malta prior to 1st January 2018 are required, in terms of regulation 8 of the Companies Act (Register of Beneficial Owners) Regulations, 2017, to set up their own internal register of beneficial owners at the registered office or at a location as specified in the Memorandum & Articles of the company, which shall at least include the following particulars:
- The name, the date of birth, the nationality, the country of residence and an official identification document number indicating the type of document and the country of issue, of each beneficial owner;
- The nature and extent of the beneficial interest held by each beneficial owner and any changes thereto; and
- The effective date on which a natural person became, or ceased to be, a beneficial owner of the company or has increased or reduced his beneficial interest in the company.
Penalties are contemplated for failure to comply with the above obligations. Amongst which, the Second Schedule to the Regulations envisages the following violations:
- Failure to keep record of beneficial owners;
- Failure to provide information to the Registrar about a change in the beneficial ownership of a company;
- Failure to obtain and at all times hold adequate, accurate and up to date information in respect of all beneficial owners within six months from the coming into force of the Regulations; and
- Failure to provide the Registrar with a declaration containing information on the beneficial owners of the company.
Profile: Katya heads the International Corporate Service Department mainly specialising in setting up the new companies, secretarial work and assisting clients with corporate governance matters. She is currently also a Member of the Malta Institute of Accountants.