Following the transposition of the 4th AML Directive, the Maltese laws (hereinafter “the Regulations”) have been amended to introduce the provisions on beneficial ownership information in order to further promote transparency in corporate structures, trusts, etc.
Effective from 01 January 2018, Malta has introduced a Register of Beneficial Owners (hereinafter “the Register’) that will become public on 01 April 2018.
Definition of “Beneficial Owner”
In context of company or partnership, the term “Beneficial Owner” is defined as the natural person who ultimately owns or controls the company which include any natural person or persons who:
- ultimately own or control, through direct or indirect ownership or control, including more than 25% of the shares or voting rights in the company or partnership;
- otherwise exercise control over the management of the company or partnership.
The law offers an exception to companies that are listed on a regulated market which are subject to disclosure requirements consistent with EU or equivalent international standards.
Register of Beneficial Owners contents
The following information on Beneficial Owners (as defined above) shall be included in the Register:
- the name,
- the date of birth,
- the nationality,
- the country of residence,
- an official identification document stating the country of issue,
- the nature and extent of the beneficial interest held.
The Register will be made available as from the 1 April 2018.
Access to the Register of Beneficial Owners
According to the Regulations, the Register will be accessible to:
- national authorities responsible for combating money laundering;
- national authorities investigating and prosecuting money laundering and associated criminal offences;
- Financial Intelligence Analysis Unit;
- Tax Authorities;
- subject persons under the Anti-Money Laundering Regulations;
- parties having a legitimate interest.
“Legitimate interest” is defined as ability of the person or organisation requesting such access to satisfactorily prove 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 through relevant documentary evidence.
Moreover, according to the Regulations, the authorities mentioned above may provide the information on the beneficial owners to foreign competent authorities.
Requirements
Companies shall be required to hold the information on their beneficial owner(s) in their register created for this purpose and available to the authorities whenever required.
In case of a change in the beneficial ownership, the company is required to deliver to the Registrar a notice within 14 days after the date of the change. Such notice shall contain all information on the Beneficial Owner as presented above.
Penalties of non-compliance
In case of any default in complying with the provisions of the regulations, every officer of the Company, i.e. directors and company secretary shall be personally liable. Penalties for failure to comply are of €1,000 plus a €10 daily penalty.
Moreover, any officer of a company who knowingly provides misleading or false information shall be guilty of an offence and liable on conviction to a fine of up to €5,000 and to imprisonment for a term not exceeding six months or to both.
Exemptions
The regulations do not apply to:
- companies that are listed on a regulated market, and
- companies whose registered shareholders are exclusively natural persons disclosed in the public records at the register of commercial partnerships maintained by the Registrar of Companies.
Time frames
As from the 1 January 2018, information on Beneficial Owners has to be submitted to the authorities prior to incorporation of the company. New incorporations shall not be accepted by the authorities without the declaration.
All active companies incorporated before 31 December 2017 must prepare the register with information on Beneficial Owners by the 30 June 2018.
As from the 1 July 2018 onwards, upon the first Annual Return submission (which falls due upon the anniversary of the company) or upon the change in Beneficial Owners – whichever comes earlier – every company must deliver to the authorities a declaration showing who the Beneficial Owners are.
Disclaimer
This document is for information purposes only and does not constitute legal / tax / business advice. Each situation should be carefully examined to confirm the absence of potential tax implications. Please contact us in order to thoroughly analyse your situation.
About IBC Corporate Solutions Ltd
IBC Corporate Solutions, a firm providing wide range of corporate and fiduciary services in Malta will advise all the clients who should comply with the Regulations. We will also advise and propose re-structuring of relevant entities, so that our clients’ private information is not disclosed to the public. Please feel free to contact us for any kind of assistance in regards to the above.
