In what could be the biggest change in transparency for a generation, Hong Kong’s registrar of companies is looking to adopt increased openness by requiring all firms incorporated in the city to publish their beneficial owners by 2018. This bold new move follows efforts from Singapore and the UK to prevent cases of fraud and money laundering and, if implemented, would include both publicly traded and privately owned companies.
Following on from a public consultation earlier in the year, the act was suggested for the first time by Hong Kong’s Financial Services and Treasury Bureau. The move would require that all Hong Kong companies disclose their beneficial ownership and keep the information within the registers, with the simplified access to data becoming a key playing card for regulators to combat money laundering and fraud.
The consultation paper classes beneficial owners as defined individuals who:
• indirectly or directly hold shares of more than 25%;
• hold voting rights in a company;
• hold the right to appoint and remove directors;
• have significant influence or control in a company, regardless of whether they carry titles.
In June 2016, the UK became the first country to introduce the beneficial ownership regime, making all information available to the public. In a similar effort, Singaporean law was amended earlier this year to make the data accessible to law enforcement.
Company registrars are also optimistic about the simplicity of this process, due to recent developments in mobile devices and technology. With the possibility of electronic filings comes the hope that not only can companies be spared the “red tape” as they start their businesses, but law enforcement agencies will also be able to easily check on the data.