Hong Kong is mulling a legislative amendment that, if approved, will mean companies incorporated there will need to identify their beneficial owners and register their details with the island’s Companies Registry.

The Financial Services and Treasury Bureau (FSTB) has now issued a consultation document on the proposed amendment.

Legislative scope

The new legislation would apply to all companies incorporated in Hong Kong, including those limited by shares or guarantee as well as unlimited companies.

Publicly listed companies will be exempt from the proposed requirements as they are already governed by rules requiring listed companies to register shareholders.

Definition

According to the FSTB’s definition, a beneficial owner directly or indirectly holds more than 25 per cent of the shares, or more than 25 per cent of the voting rights, or holds the right to appoint or remove a majority of directors, or has the right to exercise, or actually exercises significant influence or control.

When registering beneficial ownership information, a company needs to accurately file a register of people with significant control, essentially an individual who meets one or more of the specified conditions set out in the above definitions of beneficial owners.

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