The Register of Beneficial Owners

As of 1st January 2018, all Maltese companies (including commercial partnerships and shipping companies) are obliged to identify, record and report details of beneficial owners to the Registry of Companies, in compliance with the recently published Companies Act (Register of Beneficial Owners) Regulations 2017 (Legal Notice 374 of 2017, the “Regulations”).

1. Applicability of the Regulations

The new regulations apply to both new and existing companies (including partnerships en nom collectif, en commandite and limited partnerships) either formed under the Companies Act or registered under the Merchant Shipping (Shipping Organisations – Private Companies) Regulations, as well as to companies domiciled to Malta in terms of the Continuation of Companies Regulations.

The Regulations do not apply to:

  • companies listed on a regulated market being subject to disclosure requirements consistent with EU Law; and
  • companies, the registered shareholders of which are natural persons disclosed in the public records kept by the Registrar of Companies.

2. Registration of New Companies

(i)  As of the 1st January 2018, companies seeking to be registered or re-domiciled in Malta must submit a declaration on beneficial owners (in the prescribed form), which declaration must be signed by at least two proposed directors (unless only one director has been proposed for appointment) together with the other documents necessary for the registration of the company, to the Registrar of Companies in order to be constituted and registered in Malta. Registration or re-domiciliation will not be possible until the Registrar of Companies is in receipt of such document.

The information to be submitted relative to the beneficial owners – name, date of birth, nationality, country of residence, an official identification document number indicating the type of document and the country of issue, and the nature and extent of beneficial interest held – shall then be entered and held by the Registrar of Companies in a separate Register of Beneficial Owners.

(ii)  Companies are further obliged to maintain their own beneficial owners’ register which, aside from recording the details mentioned above in respect of the beneficial owners, must indicate the effective date on which they became or ceased to be beneficial owners of the company or have increased or reduced their beneficial interest in the company. Any change in beneficial ownership must be further notified to the Registrar of Companies within 14 days after the date on which the change is recorded with the company.

(iii)  Notices delivered to the Registrar regarding the transfer or transmission of shares, an increase or reduction of share capital, or a restructuring of a company’s share capital or voting rights will further be accepted and registered only if accompanied by a further notice indicating whether or not there has been a change in the beneficial ownership of the company and providing updated information, if applicable.

3. Existing Companies (those registered prior to the 1st January 2018)

Existing companies have similar reporting obligations, but have been given a six month grace period to comply with the Regulations, as follows:

(i)  All existing companies must set up and maintain their own internal beneficial owners’ register containing the information mentioned above, by the end of June 2018.

(ii)  As from the end of June 2018, existing companies must, either on the anniversary of their registration or where there is any change in beneficial ownership, whichever is the earlier, submit the declaration on beneficial owners in the prescribed form to the Registrar.

4. Access to the Registrar’s Register of Beneficial Owners

Access the Register of Beneficial Owners as held by the Registrar of Companies shall be granted, as of 1st April 2018 to:

(i)  National Competent Authorities with designated responsibilities for combatting money laundering and terrorist financing or that have investigative and prosecuting powers in relation thereto;

(ii)  the Financial Intelligence Analysis Unit (FIAU);

(iii)  National tax authorities;

(iv)  Other national competent authorities under the Prevention of Money Laundering and Funding of Terrorism Regulations.

In addition,

(i)  Subject Persons, for the purpose of carrying customer due diligence in terms of the Prevention of Money Laundering and Funding of Terrorism Regulations providing services in or from Malta; and

(ii)  Other persons or organisations that can satisfactorily demonstrate and justify a legitimate interest;

may also request access to the Register of Beneficial Owners as of the same date.

5. Penalties

Non-compliance with these Regulations may expose the Company and its officers (and in certain cases also it shareholders and beneficial owners), on a joint and several basis, to a liability to the payment of penalties in the amount of Euro 1,000 (together with a penalty of Euro 10 daily for every day that the default continues).  Such penalties apply for failure:

(i)  To keep a record of beneficial owners;

(ii)  To report a change in the beneficial ownership of a company;

(iii)  To obtain and maintain adequate, accurate and current information in respect of all beneficial owners within six months from the coming into force of the Regulations; and

(iv)  To submit a declaration containing information on the beneficial owners of the company.

The submission of misleading, false or deceptive information about beneficial owners to the Registrar constitutes a criminal offence and is subject to a fine up of up to Euro 5,000 or to imprisonment for a term not exceeding six months or to both such fine and imprisonment.

The information provided herein is for general guidance only.  Should you have specific queries or require clarifications with respect to the Regulations, please refer to our colleagues at Fenlex Corporate Services Ltd. on csu@fenlex.com.