Hong Kong and Significant Control Registry
Hong Kong Companies Ordinance 2018 – SCR: Hong Kong shall comply with new obligations put in place to fight money laundering and terrorism financing. New regulations will take place starting from March 1st - 2018 and will modify the company law (Cap. 622) in order to provide Hong Kong Authorities more transparency concerning the actual ownership of the corporates and identify the actual corporate control.
For the following unlisted companies incorporated in Hong Kong:
companies limited by shares
companies limited by guarantee
it will be legally mandatory to identify the actual owner of the company (natural or legal person) and keep the “Significant Control Registry” (SCR) that provides information about the companies’ actual owner and significant influence. A person exercises significant influence on a company if one of the following case is met:
the person owns, directly or indirectly, more than 25% of all the outstanding total shares
the person owns, directly or indirectly, more than 25% of the total votes in the company
the person owns the right to exercise, through subsidiaries, direct or indirect influence on the company
Under the new directive, every company needs to have a representative person who meets one of the following requirements:
a person who registered his residency in Hong Kong
the company’s manager, shareholder, employee
a certified public accountant, legal advisor, or trustee
Under the new SCR framework, every company is required to include information about the management control’s managers. Moreover, information regarding the company’s actual owner must be confirmed before being included into the SCR. After confirmation, the company has 7 days to include the information into its SCR and comply with the new regulations. Situations of non-compliance with the new restrictions could results in fines ranging from $HK25,000 and $HK100,000 and detention until 2 years.