UBO Registry: New Reporting Requirements for Companies and Trusts

One of the key features of the newly transposed Fourth Anti- Money Laundering Directive (Directive 2015/849/EU) is the imposition of an obligation on all European Union Member States to ensure that all incorporated corporate and other legal entities maintain sufficient and up to date information on their beneficial ownership.

In this regard, December 2017 saw the publication of the Companies Act (Register of Beneficial Owners) Regulations which imposed a requirement on all Maltese Companies (saving the exceptions listed below) to obtain and hold adequate, accurate and current information on beneficial ownership and to provide such information to the Malta Registry of Companies on an annual basis.

Furthermore, in January 2018 the Trusts and Trustees Act (Register of Beneficial Owners) Regulations were published and imposed similar obligations on every express trust which generates tax consequences under their administration

Definition of a "beneficial owner"

In terms of the regulations applicable to Companies the term "beneficial owners" refers to:

In the case of trusts the beneficial owner refers to:

any other person exercising ultimate and effective control over the trust by any means, including any person whose consent is to be obtained, or whose direction is binding in terms of the trust instrument or of any other instrument in writing, for material actions to be taken by the trustee;

Applicability to new Companies
With effect from 1 January 2018, all companies wishing to be registered or re-domiciled into Malta are required to submit a form signed by at least two of the company's proposed directors or the sole director, as the case may be. Such form must clearly identify each ultimate beneficial owner of the company and the nature and extent of the beneficial interest held. The form is to be submitted at incorporation stage along with the draft Memorandum and Articles of Association of the Company.

Applicability to existing Companies
Existing companies have 6 months within which to comply with the new regulations. A specific form containing a declaration signed by relevant company officers must be submitted along with the Company's annual return when such falls due after 30 June 2018. This requirement is applicable to all commercial partnerships, including limited liability companies and private limited liability shipping companies formed and registered under the Merchant Shipping (Shipping Organisations – Private Companies) Regulations.

Procedure to register changes in shareholding
In the case of companies that wish to register any form of change in shareholding which occurs through either a transfer, increase or reduction of shares, transmission, restricting of share capital or changes of voting rights, it is now a requirement to submit a form confirming whether such change in shareholding will result in the change in the ultimate beneficial ownership of the Company.

Obligations for Trustees
Trustees currently authorised under the Trusts and Trustees act shall submit to the Malta Financial Services Authority ("MFSA") information on each beneficial owner of the trust within 6 months from the coming into force of the Trusts and Trustees Act (Register of Beneficial Owners) Regulations.  In the case of a change in the beneficial ownership of an express trust generating tax consequences, the trustee has 14 days from the date of effective change to inform the MFSA and provide information on the new beneficial owner. It must also be noted that a trustee is under the obligation to submit an annual declaration confirming that there have been no changes to the beneficial ownership. 

Exemptions: The Companies Act (Register of Beneficial Owners) Regulations also stipulate that the following companies are exempt from such reporting obligations: Information to be stored
Entities that are required to comply with such obligation are required to maintain an internal database with the following information on each beneficial owner: Accessibility to information

Upon compilation of all information, the Registry of Companies will establish a Register of Beneficial Owners which shall only be accessible to the following:         


Disclaimer
This document does not purport to give legal, financial or tax advice. Should you require further information or legal assistance, please do not hesitate to contact Dr. Katya Tua or Dr. Luke Mizzi.