Financial Crime World

GHANA LEADS THE WAY IN BENEFICIAL OWNERSHIP DISCLOSURE IN AFRICA

African countries are increasingly introducing robust disclosure requirements for Ultimate Beneficial Owners (UBOs) of companies, trusts, and partnerships in a bid to counter money-laundering activities, increase transparency, and combat tax abuse.

The Rise of Beneficial Ownership Disclosure in Africa

Key Statistics:

  • Over 40% of African states have laws or regulations requiring the disclosure of beneficial owner information.
  • Several countries are updating their legislation to compel disclosure, with some requiring foreign companies with domestic presence to disclose information on beneficial owners.
  • Incorporation of a local entity is one trigger for UBO disclosure in some cases.

The Implications of Beneficial Ownership Disclosure

Double-Edged Benefits:

  • Stringent transparency laws boost investor confidence by reducing the risks of money laundering and illicit financial flows.
  • Certain disclosure requirements may interfere with binding confidentiality agreements, potentially hindering capital raising efforts.

Ghana’s Lead in Beneficial Ownership Disclosure

  • The Companies Act 2019 requires companies to disclose information on beneficial owners, including employment details, marital status, and social security numbers.
  • Foreign UBOs are required to register for a taxpayer identification number (TIN), providing further transparency.

Investing in Africa: Anticipating Country-Specific Disclosure Requirements

  • Investors and foreign companies with presence in Africa must anticipate country-by-country the level of disclosure required by local entities to avoid operational hindrances on the continent.
  • The push for beneficial ownership disclosure is expected to have far-reaching implications for investors and companies operating on the continent.

Conclusion

Ghana’s lead in beneficial ownership disclosure sets a precedent for other African countries to follow suit. As the move towards greater transparency gains momentum, it remains to be seen how countries will balance transparency with confidentiality requirements.