Introduction of the Register of Beneficial Owners for Maltese Companies
 
 

Introduction of the Register of Beneficial Owners for Maltese Companies

 

The Companies Act (Register of Beneficial Owners) Regulations, 2017 (hereinafter referred to as the "Regulations") were introduced by virtue of Legal Notice 374 of 2017. The Regulations, which were enacted to implement the provisions of Directive 2015/849/EU (the Fourth Anti-Money Laundering Directive) have effectively brought into force the Register of Beneficial Owners for Maltese companies. The Regulations came into force on 1 January 2018.

 

A. Statutory Declarations to be submitted to the Registry of Companies in Malta 

  • Upon incorporation and/or re-domiciliation 

In terms of the Regulations, upon the registration of a new company in Malta or the re-domiciliation of a foreign company to Malta, the directors of such company are to submit a statutory declaration (the prescribed Form B01). Such form is to identify each ultimate beneficial owner of the company, including the extent of such beneficial ownership, and the manner how such beneficial ownership is exercised (e.g. by the power to appoint directors to the Board). 

  • On the registration of any documents for a change in shareholding

Similarly, any company seeking to register any change in its shareholding structure is also obliged to register a statutory declaration (on the prescribed form B02). Such form is to be invariably submitted irrespectively as to whether such change is due to a share transfer, issue and allotment of shares or any other transaction that results in a restructuring of the company's issued share capital.

 

B. The implications of the Regulations for companies that existed before 1 January 2018

The Regulations have come into force as from 1 January 2018 and accordingly they are to apply for any company incorporated in Malta or re-domiciled to Malta as from 1 January 2018 onward.

With respect to companies that existed and were already registered with the Registry of Companies in Malta before such date (i.e. 1 January 2018), the provisions of the Regulations are to apply immediately upon the lapse of six months from such date (i.e. from 1 July onward). Upon the lapse of such six month period the Regulations will apply immediately to such companies and as a result such companies are required to submit (within 42 days of their anniversary of registration in Malta or within 14 days from the change of shareholding - as applicable) the statutory declaration prescribed in Form B01 (described in Section A above).

 

C. Who is considered to be a 'beneficial owner'?

The Regulations provide a definition of the term 'beneficial owner'. Such term is defined by means of a cross-reference to the definition of this term in the Prevention of Money Laundering and Funding of Terrorism Regulations (S.L. 373.01). This definition generally refers to an individual (a natural person) who owns or controls the company concerned via a direct or indirect ownership of more than 25% of the company's shares or voting rights, or through any other means (e.g. power to appoint directors to the board) that enable such individual to exercise such control - to the extent of more than 25% over the company. 

 

D. Access to the Register of Beneficial Owners

In terms of the Regulations, the Register of Beneficial owners will be accessible to eligible persons as from 1 April onward and such Register will be inter-linked with other Registers of Beneficial Owners across EU and EEA Member States.

 

E. Exemptions from submission of declaration to Registry of Companies

The Regulations apply to all companies - with the exception of: 

(a) companies listed on a regulated market that is subject to disclosure requirements consistent with the law of the Community or subject to equivalent international standards which ensure adequate transparency of ownership information;

(b) companies all the registered shareholders of which are natural persons who are disclosed in the public records at the register of commercial partnerships maintained by the Registrar of Companies.

 

F. Penalties for non-compliance

Failure of any company to comply with the provisions of the Regulations may give rise to an offence in terms of the Regulations, which may subject the company to a one-time payment of 1,000 Euro and a daily penalty of up to 10 Euro. 

A company shall be jointly and severally liable with its officers for the payment of any administrative penalties imposed under the Regulations.
 
 

For further information contact:

 

David Farrugia                                            

Director – Legal & Tax Advisory                                         

E: david.farrugia@dfkmalta.com           

 

*The objective of this summary is to outline the principal elements of the rules being summarized herein. Accordingly, it is not intended to be provided by way of comprehensive and definitive advice. Readers should seek professional advice by contacting DFK Malta Corporate Services Limited before acting upon any information included in this document.