This article is to give a brief outline on the new legislative requirement (with effective on 1 March, 2018) of keeping and maintaining Significant Controllers Register (SCR) of all Hong Kong companies at the company's registered office or any other place in Hong Kong (where NR2 is required to specific and file to registry) .
Background of Significant Controllers Register (SCR)
The mandatory requirement to keep SCR is to fulfil the Anit-Money Laundering and Counter-Terrorist Financing (Financial Institutions) (Amendment) Ordinance 2018 and Companies (Amendment) Ordinance 2018, such that all companies registered in Hong Kong is required to identify persons who have significant control over the company ("Significant Controllers"), then obtaining and maintaining up-to-date beneficial ownership information by way of keeping a Significant Controllers Register.
Therefore, although the SCR is not a mandatory form to file at the Companies Registry, this is an essential record to keep as certain law enforcement officers have the authority to access the SCR anytime without prior notice to the company, and failure to comply, a fine at level 4 (i.e. HKD25,000.00) with a further daily fine of HKD750.00 could be imposed.
Elements of the Significant Controllers Register
There are two (2) main parts of the Significant Controllers Register:-
Particulars of the Significant Controllers
For an individual person (a registrable person)
Correspondence address, HKID Card / Passport number and issuing country
For a corporation (a registrable legal entity)
Legal form, registration number, place of incorporation (governing law) and address of registered office
Date of becoming a significant controller; and
Nature of control over the company
Particular of designated representative
Name and contract details in Hong Kong;
In relation to “Nature of Control”, the easiest step to identify is any individual (natural) person directly or indirectly, holds more than 25% of the issued shares in the target Hong Kong company, other than that, there are also other rules to identify the significant controllers, yet, we highly recommend the company should consult professional agent for the necessary identification process if the company structure has more than three (3) layers or the company has doubt during the process.
Elements of Designated Representative
A company must designate at least one person as its representative to provide assistance relating to the company's SCR, such person shall be a natural person resident in Hong Kong and is a director, employee or member of the company; or is an accounting professional, a legal professional, or TCSP licensee. Where TCSP licensee refers as “Trust or Company Service Provider Licensee” in full, a new licensing requirement for all business carry on a trust or company service in Hong Kong with effective on 1 March, 2018.
For detail about TCSP licensee, such will be discussed in a separate topic, but any client seeking professional assistance on company setup or any business advisory service in Hong Kong, you may asking the agent whether they have obtained the TCSP license with relevant proof as a reference before engagement.
Any additional information you would like to know, please feel free to drop us an email:- firstname.lastname@example.org. In addition, we dig out below materials in case you need a little more insights.
Guideline on the Keeping of Significant Controllers Register by Companies
FAQ on Significant Controllers Register
Specific section on SCR by Companies Registry