Authors: Maria DeBono, Associate and Sarah Grima, Associate

These FAQs are the second part of a two-part series regarding Subsidiary Legislation 386.19, entitled the Companies Act (Register of Beneficial Owners) Regulations (the “BO Regulations”). By virtue of these FAQs, we aim to provide the reader with an understanding of who may be considered to be the “beneficial owner” (“BO”) of a company, as well as highlight the obligations and far-reaching implications concerning beneficial ownership under Maltese Law.

Part 1 of the FAQs may be accessed via https://fenechlaw.com/beneficial-ownership-part-1-of-2/.

What are the duties of the Company in terms of the BO Regulations?

Generally speaking, in terms of the BO Regulations, companies are obliged to:

  1. Keep and maintain the internal BO register of the Company which shall always contain, adequate, accurate and up to date information in respect of the Company’s beneficial owners; and
  2. Complete and file the applicable BO Forms with the MBR within the statutory time frames, as further explained below.
What are the forms that need to be submitted to the MBR?

There are currently 6 BO Forms which may need to be filed with the MBR in certain circumstances as further set out below:

  1. BO1: This is required upon the incorporation of a new company (together with other incorporation documents).
  2. BO2: This is required whenever there is a change to the shareholding structure of the company and/or a change in the nature or extent of the beneficial interest. This form must be filed within 14 days from the effective date of the change. However, in the case of an increase in share capital and/or the transmission of shares causa mortis, the filing deadline is 1 month from the effective date of the change.
  3. BO3: This is required for those companies existing prior to the implementation of the BO Regulations and exists to bring companies which are still currently in default, in compliance with same. This form is therefore expected to be phased out once all such companies are brought into compliance with the BO Regulations.
  4. Change in SMO Form: This form is required whenever there is a change to the person(s) originally identified and reported to the MBR as occupying the role of the Senior Managing Official. This has to be filed within 14 days from the effective date of the change.
  5. Annual Confirmation BO Form: This form is required to be filed annually within 42 days from the company’s anniversary date (i.e together with the annual return of the company) to ensure that the MBR’s records regarding the details of the BO or SMO whichever is indicated, is up-to-date and correct. Note that this BO form does not substitute or replace the annual return of a company, but is separate and distinct to same.
  6. Change in details of SMO/BO: This form is required whenever there is a change to the personal details of the BO or the SMO. It is only the form with no penalties or filing deadlines attached to it since such details would in any case be confirmed via the annual confirmation BO Form.

All the above-mentioned forms can be obtained and downloaded directly from the MBR’s online portal via https://mbr.mt/promo/official-registry-forms/

Is there a BO form filing fee?

There is no applicable filing fee to file any of the BO forms with the MBR.

How can one access BO information?

BO Information on every company can be accessed directly from the MBR’s online portal, irrespective whether one is a registered user or otherwise. The information accessible by a member of the general public upon a search  is as follows:

  • full name;
  • month and year of birth;
  • nationality;
  • country of residence;
  • the extent and nature of the beneficial interest of the BOs of a company; and
  • the effective date of ownership.

To carry out a BO search, one can either search by “Company” or by “Beneficial Owners” and access to such information costs €5 in each case.

In terms of the BO information accessible via the MBR’s online portal, it is solely viewing rights that are granted to the requesting user. To this end, please note the MBR does not register any BO Forms on its public online portal and it is therefore not possible to download same.

Are there instances where BO Information will not be available or cannot be obtained?

Yes. There may be instances where no BO information would be available, and this is either because no BO information would in fact have been submitted yet (in which case the company would be in default) or when a company is ultimately owned by a listed company.

Moreover, when a company is in dissolution, BO information can no longer be accessed via the MBR’s online portal. In such case, any interested person is to request such information directly from the MBR.

In addition to the above, access to BO information may be refused in exceptional circumstances that should be justified by documentary evidence and be determined on a case by-case basis, including instances where such access would expose the BO to disproportionate risk, risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation, or where the BO is a minor or otherwise legally incapable. However, kindly note this exemption does not apply to Competent Authorities, which have free and unlimited access to BO information.

Penalties?

The failure and/or delay in filing any required BO forms with the MBR shall give rise to a number of penalties, which have been increased quite drastically as a result of the amendments to the BO Regulations and which are being enforced by the MBR.

Such penalties range from €5,000 to €10,000 as lump sum payments together with daily penalties for everyday in default ranging between €100 and €500.

Please see the table below extracted from the BO Regulations in this regard.

Regulation Default Penalty Daily Penalty
5(5) Failure to keep record of BOs euro 5000 euro 100
6(5) Failure to provide information to the Registrar about a change in beneficial ownership of a company euro 5000 euro 100
6A(2) Failure to provide the Registrar with annual confirmation of details euro 5000 euro 100
6A(3) Failure to provide information to the Registrar about a change in SMOs of a company euro 5000 euro 100
8(2) Failure to comply with regulation 5 within six months from the coming into force of the regulations euro 10,000 euro 500
8(5) Failure to provide the Registrar with a declaration containing information on the BOs of the company euro 10,000 euro 500
Are there any other measures in place to ensure submission of BO information?

As a result of the amendments to the BO Regulations, the Registrar’s powers have widened. These include the power to:

  1. refuse to register any company document if BO information is not submitted or if it is not satisfied that the company has provided accurate and up-to-date information on all the BOs of the company;
  2. restrict new incorporations for directors involved in other Maltese-registered companies that failed to submit BO Information; and
  3. strike off existing companies that failed to file BO

Should you require any further information or assistance on the matter, please do not hesitate to reach out to us personally on sarah.grima@fenechlaw.com and maria.debono@fenechlaw.com.

©Fenech & Fenech Advocates 2021

Disclaimer │ The information provided on this Update does not, and is not intended to, constitute legal advice. All information, content, and materials available are for general informational purposes only.  This Update may not constitute the most up-to-date legal or other information and you are advised to seek updated advice.