Malta’s Economy, Investment and Small Businesses Minister Silvio Schembri announced on 17 July that the Malta Business Registry (MBR) had so far removed 10,000 inactive companies as part of an extensive process of cleaning up the registry in line with new international standards. Malta now has 96,000 companies on the registry.
“The action taken by the MBR shows that the amount of inactive companies has decreased drastically. In fact, from time to time, reports are issued to companies that do not have appointed officials, or that have failed to enter their annual reports, or have not provided the necessary information relating to beneficial ownership. When one fails to meet these criteria, it is then followed by the procedure of removing the company from the register,” said Schembri.
He said the Maltese government was dedicated to strengthening existing structures, as it has done already, and would continue to do as required. Important changes were introduced via Legal Notice 247 of 2020, which amended the Companies Act (Register of Beneficial Owners) (Amendment) Regulations, 2020, with effect from 16 June.
Whenever a declaration containing information on the beneficial owners (BOs) of a company is submitted to the MBR, including any change in the beneficial ownership, a certified true copy of the official identification document of every beneficial owner must also to be submitted.
On each anniversary of a company’s registration, it must file a form showing any change in details of the BO, or confirming that there has been no change, within 42 days. The return must be signed by at least one director of the company or the company secretary.
If there is any change in the senior managing officials of a company, a form must be filed with the Registrar within 14 days of the date of the change.
If there is any change in the details of BOs at any time – such as name, country of residence or official identification document (ID) number – a form indicating the change must be filed with the Registrar, together with a certified true copy of the ID.
The Registrar has been given enhanced powers in relation to registration, including the power:
- To refuse to register any document of a company if the BO information is not submitted or if the Registrar is not satisfied that the company has provided accurate and up to date information on all BOs;
- To restrict new incorporations for directors involved in other companies that have failed to submit BO information;
- To take any steps and require any information/documentation it deems necessary to ascertain the correctness of the BO submitted, including a physical on-site investigations, before registering a new company or return.
The penalty imposed on every officer of the company where the Registrar deems it necessary to update the BO information in terms of the Principal Regulation has been increased significantly to €100,000. The administrative penalties have also been increased to a maximum flat penalty of €10,000 and €500 for every day of default.
Where a company fails to provide BO information, the Registrar will send a warning letter. If the company fails to submit the BO information within one month of the letter, the Registrar can publish a notice in the Gazette and, within three months from the publication, proceed to strike the company off the register.
“Sovereign welcomes the steps taken by the Malta Business Registry to enhance the company registry and implement the recommendations of the Council of Europe’s anti-money laundering body MONEYVAL, which last year called on the Maltese authorities to strengthen the practical application of their measures to combat money laundering and financing of terrorism,” said Stephen Griffiths, Managing Director of Sovereign Trust (Malta). “Malta is an important jurisdiction for doing business in Europe and it is good to see that the government is determined to commit even more resources to its institutions and regulations to ensure that it is meeting all its international responsibilities.”