The Companies (Amendment) Ordinance 2018 and the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) (Amendment) Ordinance 2018 were passed by the Legislative Council on 25 January 2018 and came into force on 1 March 2018.
Hong Kong Companies (Amendment) Ordinance 2018: Introducing Significant Controllers Register (SCR)
The requirement to keep a SCR applies to all companies formed and registered in Hong Kong. It will not apply to Non-Hong Kong Companies registered under Part 16 of the HK Companies Ordinance and publicly listed companies.
Each company will be required to keep a SCR; even if it does not have a Significant Controller.
How it could affect you
Each company will be required to keep its SCR at its registered office or a place in Hong Kong. A company will be required to notify the Companies Registrar the place where the register is kept and any change to that place within 15 days of the change1. The Company will be required to give a written notice within 7 days where it knows or has reasonable cause to believe that:
- A person is a significant controller of the company
- A particular person knows the identity of another person who is a significant controller of the company.
The addressee is given 1 month from the date of the notice to comply with requirements. There is an exception where the company has already been informed of the status as a registrable person or registrable legal entity and the required particulars have been provided to the company.
The company will also be required to keep information in the SCR up-to-date. The company must give a written notice within 7 days where it knows or has reasonable cause to believe that there is a registrable change in relation to a significant controller.
All entries relating to a significant controller in the SCR may be destroyed only after 6 years from the date on which such person ceased to be a significant controller of the company.
Failure to comply with the new requirements and obligations is a criminal offence. The company and every responsible person of the company are subject to a fine of HKD25, 000 and a further daily fine of HKD700.
In addition, any person who knowingly permits the contravention may be liable on conviction on indictment to a fine of HKD300, 000 and to imprisonment for 2 years; or on summary conviction to a fine at maximum of HKD100, 000 and to imprisonment for 6 months.
What actions a Hong Kong company should take?
- Identifying significant controllers
- Notifying the significant controllers the new rules and considering any relevant overseas data / privacy protections provisions
- Giving notices to significant controllers and others
- Obtaining all the information required
- Creating and entering particulars in a compliant SCR
- Notifying the Companies Registrar of the location of the SCR
- Appointing a designated representative to assist compliance with the SCR rules and to facilitate with inspection by law enforcement officers and the Companies Registry
- Updating information in the SCR
Please do not hesitate to contact us or your account manager should you have any queries. In the meantime, please refer to our Frequently Asked Questions (FAQs) for further requirements and obligations on SCR.
1There is no need to give notification to the Registrar if since the SCR came into existence; it has been kept at all times at the company’s registered office or at the same place where the company’s register of members has been kept.