On 20 December 2017 legislation was published in Malta regarding the transposal of Directive EU 2015/849 of the European Parliament and of the Council of 20 May 2015 regarding the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, i.e. by creating the Register of Beneficial Owners.
In this regard, a Register of Beneficial Owners was created, with legislation published regarding Trusts and Trustees, Foundations, Associations and companies/corporations. In relation to the latter, the changes are made pursuant to the Companies Act and we shall address them below.
As of the date of its coming into force (1 January 2018), whenever a new company is established, in addition to all the documentation that must be submitted to the Registrar, a declaration signed by the company Directors must be submitted containing the following information regarding the Beneficial Owners (UBOs) of the company: name, date of birth, nationality, country of residence, number of the official identification document, and indication of the type of document and country of issue, along with the nature and extension of their interest.
This requirement also applies to companies that have redomiciled to Malta.
Similarly, whenever a change is made to the UBOs, a transfer of shares, reduction or increase in capital, or any restructuring of share capital, or a change in the company voting rights, a declaration containing updated information regarding the UBOs shall be submitted to the Registrar.
All Maltese companies must have an internal UBO register at all times, containing adequate, updated and precise information regarding the respective UBOs.
Companies that already exist in Malta must comply with these obligations within a maximum period of six months, starting from the date when this legislation came into force. In fact, they must submit a declaration to the Registrar containing information regarding the respective UBOs on the anniversary of their registration or when there is any change to their beneficial owners or, at the latest, six months after the date when this legislation came into force.
Annually, all companies shall submit a declaration to the Registrar signed by a Director or by the Secretary with the aforementioned information regarding the UBOs and dates of any changes in that respect.
The company, its governing bodies, shareholders and beneficial owners shall be held responsible for failing to comply with the aforementioned rules. Fines may be imposed and a prohibition may be applied making it impossible to make any entries in the Register regarding the company.
It should be pointed out that access to the Register of Beneficial Owners in Malta is limited to the Financial Intelligence Analysis Unit, the national taxation authority and to any other competent national authority within the scope of preventing money laundering or terrorist financing. This access occurs without restriction and without notification or prior notice given to the respective company.
It is also possible to allow access to people or entities that wish to undertake due diligence in accordance with the applicable legislation against money laundering or terrorist financing.
Lastly, it is also possible for any person or entity to gain access subject to a written request that denotes a legitimate interest that must be duly demonstrated as being specific and uniquely related to the prevention, detection and elimination of money laundering or terrorist financing.
NEWCO is entirely at your disposal to answer any questions you may have regarding the impact of this new legislation on Malta companies.