Hong Kong has stood out from its peers both in Europe and globally too as one of the most desirable destinations for investment. The administration stops at nothing in advancing the business economy. Once investors incorporate their companies in Hong Kong, the second step is opening a bank account before starting to operate. Now, there is a third step that involves preparing and maintaining a register of beneficial owners Hong Kong. However, many investors have been asking a lot of questions about the new requirement. Here are some of the answers to these questions.
Who exactly is the person or entity referred as the significant controller in a company?
The significant controller of a company should be considered a person or entity that has substantial influence on a company. This influence is measured using the shareholding that the person or the legal entity holds in the company. That person or entity should have 25% or more of the issued shares in that company.
The person is also deemed to have significant control in a company if he controls about 25% of the total voting rights. He can also have direct influence such as veto powers on appointments of company staff.
How does a company identify the significant controller/s?
After the Companies Ordinance was amended and the new requirements became law, every Hong Kong Company is now required to take some efforts in identifying SC (significant controllers). These efforts involve reviewing the company’s members register as outlined in the Articles of Association, the shareholder’s agreements, and issuing notices. Note that once you identify the significant controllers, you have to send them notices for confirmation of their details.
If a company has two shareholders each having 50% of the shareholding, who should be included in the SCR?
The requirement of the Hong Kong beneficial ownership register is that any person with significant control of the company should be included. In this scenario, both shareholders have to be included in the register because each controls 50% of the company. Even in a situation where more shareholders are involved but each has over 25% significant control, all their details must be captured well in the register.
Is it possible to change the location of the significant controllers register Hong Kong?
Once the beneficial ownership register Hong Kong has been prepared, the company ordinance requires the company to maintain it in the registered office. However, the law does not delimit your company from storing the register elsewhere. In such a situation, you only need to notify the Hong Kong authorities by signing Form NR2 within 15 days after the change.