Following publication of the Companies Act (Register of Beneficial Owners) Regulations, 2017 (the "Regulations") on the 20 December, 2017, Maltese companies will now be required, as more amply described below, to identify and maintain a register of their ultimate beneficial owners as well as to provide information on their beneficial owners to the Malta Registry of Companies which will be keeping its own beneficial owners register.
By beneficial owners, the Regulations refer to any natural persons having direct or indirect ownership of 25% plus 1 or more of the shares or more than 25% of the voting rights or other ownership interests of the company.
With effect from 1 January 2018, companies seeking to be registered or re-domiciled in Malta must submit, along with the Memorandum and Articles of Association of the Company, a statutory form to be signed by at least two of the company's proposed directors (unless the company is to have only one director) identifying the particulars of each ultimate beneficial owner of the company and clearly indicating the nature and extent of the beneficial interest held by each ultimate beneficial owner. A similar statutory form will also need to be submitted by all companies seeking to register any change in shareholding occurring through a transfer, transmission, increase, or reduction of shares or other restructuring of share capital or changes of voting rights which form will, indicate whether the change in question has brought about any change in ultimate beneficial ownership of the company. Any changes in the beneficial ownership of a company, even if they do not result in any of the above-mentioned notifiable changes, must also be notified to the Malta Registry of Companies within 14 days of the recording of the change with the Company.
On top of these notification requirements, as mentioned earlier above, all companies will now be required to keep their own internal register of beneficial owners. While this requirement applies as from 1January, 2018 to any new companies registered on or after that date, existing companies have been allowed a six month grace period, expiring on 30 June, 2018, within which they are to comply with their obligation of maintaining their own beneficial owners register and to thereafter also start complying with their new annual obligation of filing with the Registry of Companies, together with the annual return to be filed on the anniversary of their registration, a declaration listing information on the companies' beneficial owners.
The regime applies to all commercial partnerships, including limited liability companies, with the exception of companies listed on a regulated market and companies the direct shareholders of which are all natural persons.
Failure to abide by the obligations in the Regulations may attract joint and several liability of the Company and its officers, and in certain case also its shareholders and beneficial owners, for lump sum penalties for default coupled with daily penalties for so long as the default continues.
It is worth noting that the Registry of Companies will be maintaining its own register of beneficial owners which will be accessible as from the 1 April, 2018 limitedly by the persons indicated in the Regulations (mainly relevant competent authorities and persons subject to obligations relating to the prevention, combating and detection of money laundering and combating of financing of terrorism) upon their showing a legitimate interest in the information they seek to access.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.