Amendments to the Companies Act (Register of Beneficial Owners) Regulations
Deloitte Malta Tax Alert
21 August 2019
The Companies Act (Register of Beneficial Owners) (Amendment) Regulations (the ‘Amended Regulations’) which came into force on 12 July 2019 (with the exception of one provision which is to come into effect on 1 January 2020) amends the Companies Act (Register of Beneficial Owners) Regulations (the ‘Regulations’) which had come into force on 1 January 2018.
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The main reason for these amendments is to transpose various provisions of the 5th Anti-Money Laundering Directive into Maltese law. The changes are as follows:
- In accordance with the provisions of the Regulations, the onus to provide the required information regarding a company’s beneficial ownership was previously solely on the company itself. The Amended Regulations now also places that onus on any natural persons who have a reasonable cause to believe that they are a beneficial owner of a company and to provide the required information as set out in the Regulations. By placing this responsibility on the beneficial owners themselves, it is subsequently up to them to ensure that the said company is complying with the Regulations.
- Presently, only specific national competent authorities and subject persons (as defined in the Prevention of Money Laundering and Funding of Terrorism Regulations, Subsidiary Legislation 373.01 of the Laws of Malta) (‘Subject Persons’) have access to the information on beneficial owners. From 1 January 2020, the Amended Regulations will give free access to the general public. The access is restricted to the name, the month and year of birth, the nationality, the country of residence and the nature and extent of the beneficial interest of the beneficial owners.
- In exceptional circumstances, access to beneficial information will not be granted if it could expose the beneficial owner to disproportionate risk, risk of fraud, kidnapping, blackmail, extortion, harassment, violence, intimidation, or where the beneficial owner is a minor or otherwise legally incapable. These circumstances must be backed up with documentary evidence and are determined on a case by case basis. Access may be restricted to all or part of the beneficial ownership information. Having said that, access to beneficial ownership information will not be restricted to credit and financial institutions or to Subject Persons.
- The Amended Regulations give the Registrar additional powers to make enquiries with companies where he has reasonable cause to believe that the beneficial ownership information submitted to him may not be accurate or up-to-date. The Registrar has the right to carry out on site investigations at the company’s premises, if needed, to establish the current beneficial ownership.
- In addition, the national competent authorities and Subject Persons are bound to report to the Registrar, any discrepancies between the beneficial ownership information available to them and that held in the register of beneficial owners at the Malta Business Registry. The Registrar may where necessary update the beneficial ownership information in the register and if he deems it appropriate, make specific reference in the register of beneficial owners of the discrepancies until such discrepancies are resolved.
- Each officer of a company shall be liable to a penalty of not more than €10,000 if, following such enquiry or report, the Registrar has deemed it necessary to update the beneficial ownership information in the register as per the Amended Regulations.
- The information regarding the beneficial ownership of a company shall remain available on the register of beneficial owners held by the Registrar and through the interconnection system of central, commercial and companies registers, for 5 years after the name of the company has been struck off from the register.