Mandatory Significant Controllers Register
New Hong Kong Companies Ordinance Amendment: Mandatory Significant Controllers Register
What Is It?
In order to enhance Hong Kong’s regulatory regime for combating money laundering and terrorist financing, Hong Kong has recently joined the global Financial Action Task Force (FATF) and has recently amended the Hong Kong Companies Ordinance to comply with FATF recommendations. These recommendations have or will soon be adopted and enforced by almost every commercially significant country and jurisdiction in the world (the UK, Cayman Islands, BVI and Singapore have already complied).
Under this new amendment, with effect from 1 March 2018, a Hong Kong-incorporated company (unless exempt) must:
- take reasonable steps to identify its significant controllers ( each an “SC”);
- enter the required particulars of each SC in a new Significant Controllers Register (the “SCR”) and keep the SCR up to date;
- make the SCR available for inspection and taking of copies by relevant authorities; and
- appoint a formal Designated Representative (the “DR”) to assist relevant authorites
This is a legal new requirement for every Hong Kong company (unless exempted) to take all reasonable steps to investigate, obtain and maintain this information. Non-compliance with the SC register requirements is a criminal offense and subject to up to HK$25,000 in fines and HK$700 per day.
Who is a Significant Controller?
- A Significant Controller can be a natural person (a "Registrable Person" or "RP") and/or a legal entity (another company, a "Registrable Legal Entity" or "RLE") that:
- Holds, directly or indirectly more than 25% of the issued shares in the company;
- Holds, directly or indirectly more than 25% of the voting rights in the company;
- Holds, directly or indirectly, the right to appoint or remove a majority of the board of directors of the company or
- Has the right to exercise, or actually exercises, significant influence or control over the company (including trustees, members and trusts).
- In the case of a Registrable Legal Entity, the SCR must include the Significant Controllers of the RLE.
What Information Do I Need for each Significant Controller?
- Name of the Registrable Person or Registrable Legal Entity;
- Correspondence address (RP) / principal office address (RLE);
- Number, type and issuer of ID card / RLE's legal form, home country & Co. #
- Date on which the RP or RLE became a RP or RLE
- Nature of RP or RLE's control over the company
Your Company’s New Significant Controllers Register
The Significant Controllers Register:
- Must be kept at the company’s registered address or another place in Hong Kong;
- If the company keeps the SCR in another place, it must notify the Companies Registry within 15 days after the SCR is first kept at that place
- Can be kept in English or Chinese;
- Can be kept in hard copy or electronic form;
- Is CONFIDENTIAL and not open for public inspection;
- SC changes must be updated within seven (7) days from when such changes are confirmed (e.g. if the particulars of an SC are known or confirmed on March 1, 2018, the SCR must be updated by March 8, 2018);
So How Can Hong Kong Commons Help Me?
Hong Kong Commons is ready to:
- Maintain your company’s Significant Controllers Registry;
- Serve as your Designated Representative (collectively the “SCR Service”); and
- Help you keep your SCR Updated and in compliance with the Companies Ordinance
Whether or not we are currently serving as your Company Secretary or providing your a Registered Address. As a new legal requirement and a new undertaking, our SCR Service is a new service and not included in our current Company Secretary or Registered Address packages (future packages may include our SCR Service under new pricing).