The Significant Controllers Register for a Hong Kong Companies

The Bill requires every company incorporated in Hong Kong to:

• take reasonable steps to ascertain individuals and legal entities with significant control over it (“significant controllers”);
• obtain accurate and up-to-date information about them; and
• maintain a register of significant controllers (“significant controllers register”) which contains specified particulars.

Listed companies will be exempt as under the Securities and Futures Ordinance they are already subjected to a more stringent regime.

The significant controllers register of a Hong Kong company will NOT be open for public inspection.

An individual is a significant controller if he:

• holds, directly or indirectly, more than 25% of the issued shares 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.

A legal entity is a significant controller of a company if it:

• meets any of the above criteria; and
• is immediately above the company in the ownership chain.

Hong Kong is scheduled to undergo a FATF mutual evaluation in 2018/19. One of the key deficiencies in its AML/CTF regime as against FATF recommendations is the absence of statutory requirements for companies to keep information about their beneficial owners. The Bill seeks to address this deficiency and avoid Hong Kong being blacklisted by FATF. It is important to note that the significant controllers register of a Hong Kong company will NOT be open for public inspection.

For more information please feel free to contact Mr. Francis Chew at francisc@zetland.biz.