In conjunction with the recent 5th Anti-Money laundering Directive issued by the European Union in 2018, Malta has updated the regulations on Register of Beneficial Owners.
As a brief overview of the regulations implemented on the 1st January 2018, prior to summarising the new amendments, companies and partnerships, were required to disclose specific information on the ultimate beneficial owners’ to the Registry of Companies (now known as the Malta Business Registry “MBR”).
The regulations considered the ultimate beneficial owners to be those individuals who ultimately own or control a legal entity through direct or indirect ownership. The definition of ultimate beneficial owner is
- any natural person who ultimately own or control through indirect or direct ownership of 25% plus 1 share or more; or
- more than 25% of the voting rights; or
- an ownership interest of more than 25%; or
- through control via other means; or
- after having exhausted all possible means to identify the aforementioned, any natural persons holding the position of senior managing officials.
The information requested by the MBR to be disclosed is:
- official full name;
- date of birth;
- country of residence;
- official identification number (e.g. passport number or identification card number);
- type of the identification document;
- expiry date of the identification document;
- country of issue of the identification document; and
- the nature and extent of the beneficial interest held by each beneficial owner.
The following entities were the only ones who were given access to such database:
- Subject persons for the purpose of customer due diligence;
- Competent Authorities; and
- Any person or organisation that upon written request can satisfactorily demonstrate and justify legitimate interest.
The following changes have been made under L.N.158 of 2019 to the Companies Act (Register of Beneficial Owners) (Amendment) Regulations, 2019 in order to implement all relative changes within the 5th AML Directive:
1. Obtain Information : Any individual who believes to be an ultimate beneficial owner of a particular company must provide the necessary information to the company without delay and 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;
2. Access to Information : The register of beneficial owners will be accessible by any member of the general public, and not limited to authorities, subject persons and anyone who proves legitimate interest. This particular amendment shall come into force on 1 January 2020. The public, shall have the visibility of:
- Year of birth;
- Country of residence; and
- The extent and nature of beneficial ownership.
3. Limitation of Access rights : The Legal notice clarifies the circumstances during which access to the public can be withheld, in full or in part by the MBR. Further to the existing situations, the following exceptions were added:
- in case of disproportionate risk;
- in case of risk of fraud, kidnapping, blackmail, extortion and harassment risk to the beneficial owner; or
- where the beneficial owner is legally incapable;
4. Adequate and accuracy of data : Where discrepancies may exist between the information provided by subjects persons and the MBR, the Registrar may enquire and make physical on-site investigations;
5. Penalties : Every officer of the company may become liable to a penalty of not more than €10,000 if the Registrar identifies that the data is not accurate and/or up-to-date;
6. Record keeping : The data disclosed on the beneficial owners of Companies shall be kept by the Registrar and remain available for 5 years after the name of the company has been struck off the register.
For more information, please contact Rishi Bonello: firstname.lastname@example.org