Legal Notice 374 of 2017, the Companies Act (Register of Beneficial Owners) Regulations, 2017 (hereinafter referred to as the ‘Regulations’) provide Directive 2015/849 to implement the relevant provisions on beneficial ownership information of the said Directive. The Regulations came into force on the 1st January 2018.
The Regulations do not apply to the following:
- A company listed on a regulated market that is subject to disclosure requirement or to equivalent international standards which ensure adequate transparency of ownership information.
- All the registered shareholders who are disclosed in the public records at the Registrar of Companies (hereinafter the ‘Registrar’)
Declaration of Beneficial Owners
From the 1st January 2018, when a company is incorporated in Malta and documents thereof delivered to the Registrar for registration, a declaration in the form specified in the Regulations, signed by two of the proposed directors of the Company (or one director in case of sole ownership) shall be submitted to the Registrar containing the following information on the beneficial owners of the Company:
- Date of birth
- Country of residence
- Official identification document number, type of document, and country of issue
- Nature and extent of beneficial interest
A proposed company will not be registered unless such declaration is also provided to the Registrar. The information on the beneficial owners of every company provided to the Registrar shall be held by the Registrar in a register of beneficial owners.
Internal Register of Beneficial Owners
Every company shall obtain and at all times hold accurate and updated information in respect of its beneficial owners which shall include:
- The name, date of birth, nationality, country of residence, official identification document number, type of document, and country of issue of each beneficial owner.
- Nature and extent of the beneficial interest held by each beneficial owner and any changes thereto.
- The effective date on which a person became or ceased to be a beneficial owner of the company, or has increased or reduced its beneficial interest in the company.
The shareholders of the company and any person believed to be a beneficial owner of the company shall be bound to provide this information to the company without delay. Additionally, every beneficial owner who acquires, disposes of, increases, or reduces his beneficial interest in the company shall be bound to immediately provide the said information to the company. The latter shall hold a beneficial owners’ register and such shall be kept at the registered office of the company. In default, the company and every officer, shareholder, and beneficial owner of the company shall be jointly and severally liable to a penalty and for a daily penalty also for each day the default continues; albeit an officer of the company shall not be liable if he has exercised all due diligence to comply with the Regulations and the default was not due to an act or omission on the officer’s part.
Changes in a Company
When there is a change in the beneficial ownership of a company, the latter shall, within 14 days from the recorded change, deliver to the Registrar a notice, in the form set out in the Regulations of the change, providing information on any new beneficial owner and updated information including on the nature and extent of the beneficial interest held on each of the other beneficial owners and the effective date of changes and the Registrar shall enter the said changes in the register of beneficial owners.
When there is a transfer or transmission of shares, an increase or reduction of issued share capital, or a restricting of a company’s share capital or changes in voting rights, the company shall together with the relative notice of such change to the Registrar, submit the form set out in the Regulations, indicating if there has been a change in the beneficial ownership of the company and providing the relative information. No such change in the company shall be registered unless the said form is also submitted to the Registrar.
In default, the company and every officer, shareholder, and beneficial owner of the company shall be jointly and severally liable to a penalty and for a daily penalty also for each day the default continues; albeit an officer of the company shall not be liable if he has exercised all due diligence to comply with the Regulations and the default was not due to an act or omission on the officer’s part.
Access to Information on Beneficial Owners Register
The information on the beneficial owners of a company held by the Registrar shall be accessible to:
- National competent authorities with designated responsibilities for combating money laundering and terrorist financing.
- National competent authorities that have the function of investigating or prosecuting money laundering, associated criminal offences and terrorist financing, or of tracing, seizing, freezing and confiscating criminal assets.
- The Financial Intelligence Analysis Unit.
- National tax authorities.
- Any other national competent authority within the meaning assigned to it under the Prevention of Money Laundering and Funding of Terrorism Regulations, not already covered under the above, in a timely manner without any restriction and without alerting the company concerned; and
- Subject persons in terms of the Prevention of Money Laundering and Funding of Terrorism Regulations providing services in or from Malta, for the purpose of carrying out customer due diligence in accordance with the said regulations, in a timely manner.
Any person or organisation that upon a written request can satisfactorily demonstrate and justify a legitimate interest shall, in accordance with data protection requirements, be granted access to the name, the month and year of birth, the nationality, the country of residence and the extent and nature of the beneficial interest of the beneficial owners of a company. A legitimate interest to have access to information on the beneficial owners of a particular company shall be satisfactorily demonstrated if the person or organisation requesting such access can satisfactorily demonstrate that the interest specifically and solely relates and will contribute to the prevention, detection and combating of money laundering or the associated predicate offences or the financing of terrorism and shall be justified on the basis of previous activities and a proven track record of actions in that field by means of relevant documentary evidence. A legitimate interest shall be conclusively determined by the Registrar, and for this purpose the Registrar may request information or seek guidance from or consult with any person or authority as he may deem necessary.
No access to information on a beneficial owner of a company shall be granted, in full or in part, where in exceptional circumstances to be justified by means of documentary evidence and to be determined on a case by case basis, access to such beneficial ownership information would expose the beneficial owner to the risk of fraud, kidnapping, blackmail, violence or intimidation, or where the beneficial owner is a minor or otherwise incapable.
The authorities and the Financial Intelligence Analysis Unit may, in pursuance of their functions in accordance with applicable law, provide information on beneficial owners to competent authorities and to Financial Intelligence Units of other Members States of the European Union and third countries.
Compliance for Companies Already Registered
Every company incorporated and registered before the 1st January 2018 shall comply with the Regulations within 6 months from the 1st January 2018.
In default, the company and every officer, shareholder and beneficial owner of the company shall be jointly and severally liable to a penalty and for a daily penalty also for each day the default continues; albeit an officer of the company shall not be liable if he has exercised all due diligence to comply with the Regulations and the default was not due to an act or omission on the officer’s part.
Every company incorporate and registered before the 1st January 2018 shall, after the 1st July 2018, on the anniversary of its registration or where there is any change in the beneficial ownership of the company, whichever is the earlier submit a form set out in the Regulations, to the Registrar containing the information on the beneficial owners of the company. The said declaration is required to be signed by at least one director of the company or the company secretary delivered to the Registrar within 42 days of the anniversary date of the company or within 14 days after the date on which the change is recorded with the company as the case may be.