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 are 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. It must contain the following information about the company’s beneficial owners:
- 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. It 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 without delay. Additionally, every beneficial owner who acquires, disposes of, increases, or reduces their beneficial interest in the company shall be bound to provide the said information immediately.
The latter shall hold a beneficial owners’ register, and such shall be kept at the company’s registered office. In default, the company and every officer, shareholder, and beneficial owner shall be jointly and severally liable to a penalty. For a daily penalty, the default continues. Albeit an officer of the company shall not be liable if they have exercised all due diligence to comply with the Regulations and the default was not due to any 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 deliver to the Registrar a notice within 14 days from the recorded change., It shall be 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. 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 submit the form set out in the Regulations, together with the relative notice of such change to the Registrar. It shall indicate if there has been a change in the beneficial ownership of the company and provide the relative information. No such change in the company shall be registered unless the said form is also submitted to the Registrar.
Access to Information on Beneficial Owners Register
The information on the company’s beneficial owners 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 offenses, 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, promptly without any restriction and without alerting the company concerned.
- Subject persons in terms of the Prevention of Money Laundering and Funding of Terrorism Regulations providing services in or from Malta, to promptly carry out customer due diligence by the said regulations.
Any person or organisation that, upon a written request, can satisfactorily demonstrate and justify a legitimate interest shall 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 by data protection requirements.
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 to and will contribute to the prevention, detection, and combating of money laundering or the associated predicate offences or the financing of terrorism. It shall be justified based on previous activities and a proven track record of actions in that field using relevant documentary evidence.
A legitimate interest shall be conclusively determined by the Registrar. 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 company’s beneficial owner shall be granted, in full or in part, where exceptional circumstances are to be justified using 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 minor or otherwise incapable.
The authorities and the Financial Intelligence Analysis Unit may, in pursuance of their functions by applicable law, provide information on beneficial owners to competent authorities and 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 six months from the 1st January 2018. They shall submit a form set out in the Regulations to the Registrar, containing the information on the company’s beneficial ownership on the registration anniversary or where there is any change in the company’s beneficial ownership.
The said declaration must 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.