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The Hong Kong Companies (Amendment) Ordinance 2018 (the Amendment Ordinance) has introduced new requirements to enhance transparency of corporate beneficial ownership. Companies incorporated in Hong Kong are now required to obtain and maintain an up-to-date Significant Controller Register (SCR) kept at the registered office in Hong Kong. The new legislation will take effect on March 1, 2018.

Under the Amendment Ordinance, all companies incorporated in Hong Kong (except listed companies) are required to:

• identify and ascertain any and all persons who have significant control over the company; and
• maintain an SCR which may be accessible by law enforcement officers upon request.

A ‘significant controller’ is any natural person or legal entity meeting one or more of the following conditions in relation to the company:

• directly or indirectly holding more than 25% of the issued shares, or the right to share more than 25% of the capital or profits;
• directly or indirectly holding more than 25% of the voting rights;
• directly or indirectly holding the right to appoint or remove a majority of directors;
• otherwise having the right to exercise, or actually exercising, significant influence or control; or
• having the right to exercise, or actually exercising, significant influence or control over the activities of a trust or a firm that is not a legal person, but whose trustees or members satisfy any of the first four conditions.

The company’s SCR, in English or Chinese language, must contain the following required particulars of every significant controller of the company:

• For a registrable person (natural person): name, correspondence address, identity card or passport number and the issuing country, the date on which the person became a registrable person and the nature of the person’s control over the company.
• For a registrable person (specified entity): name, address or principle office, legal form and law that governs it, the date on which it became a registrable person and the nature of its control over the company.
• For a registrable legal entity: name, registration number, registered or principle office address, legal form and law that governs it, the date on which it became a registrable legal entity and the nature of its control over the company.

In addition, the SCR must record the particulars of any registrable change with respect to each significant controller of the company; and the name and contact details of at least one designated representative to provide assistance relating to the company’s SCR to law enforcement officers. All information must be entered into the SCR within seven (7) days of confirmation of accuracy.

Failure to comply with the above obligations will result in the company and all responsible persons to be guilty of a criminal offence and liable to a fine of HK$25,000.

Asiaciti Trust will be contacting clients regarding the SCR.