The Companies Act (Register of Beneficial Owners) Regulations (the “Regulations”) introduced the obligation on all companies constituted under the Companies Act, to submit to the Registrar a declaration containing information on all the beneficial owners of the company. This information submitted to the Registrar is used to compile an electronic register of all the beneficial owners of Maltese companies.
The Regulations exempt certain entities from the obligations established by the Regulations. Exempted entities are companies listed on a regulated market which are subject to disclosure requirements consistent with EU law, or any equivalent international standards which ensure adequate transparency. Moreover, where all the registered shareholders are natural persons who are disclosed in the public records at the register of commercial partnerships maintained by the Malta Business Registry and provided none of the said natural persons are acting as trustee or in any other fiduciary capacity, the Regulations shall not apply.
The Companies Act (Register of Beneficial Owners) (Amendment) Regulations, 2019 (the “Amending Regulations”) were issued recently on the 12th July 2019, introducing changes to the original Regulations.
One of the major amendments introduced, which will come into effect on the 1st January 2020, is that any member of the general public will be eligible to gain access to certain details of the beneficial owner of a company. These details are the beneficial owner’s name, month and year of birth, nationality, country of residence and extent and nature of the beneficial interest in the company.
The Amending Regulations go on to remove the obligation to prove one’s legitimate interest when requesting access to the details of a beneficial owner. Access may, however, be denied to subject persons who are carrying out customer due diligence and members of the general public, where documentary evidence can show that the granting of access to such information will expose the beneficial owner to disproportionate risk, risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation. Where the beneficial owner is a minor or otherwise legally incapable, access may also be restricted upon presentation of documentary evidence. Such restriction to access, shall in no case apply to credit institutions and financial institutions or subject persons.
The Amending Regulations, moreover, introduce the obligation on any natural person who can be reasonably considered to be the beneficial owner of a company to furnish the Registrar with the information requested. Furthermore, measures to ensure adequate, accurate and current information has been provided were introduced in the form of allowing the Registrar to make enquiries with the entity, including on-site visits. If discrepancies are found and the Registrar deems it necessary to update the information, every officer of the company may be liable to pay a penalty up to €10,000.
Finally, the Amending Regulations introduce the requirement that information on the beneficial owner must be held for 5 years after the name of the company has been struck off the register.
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. Anna Grech.