Malta Introduces Beneficial Ownership Requirements to Enhance Transparency

As of January 1, 2018, Malta has implemented a new measure aimed at increasing transparency and combating money laundering and terrorist financing by requiring entities in the country to disclose their ultimate beneficial owners.

Disclosure Requirements

The disclosure needs to be made to the respective registries:

Companies: Registrar of Companies
Trusts: Malta Financial Services Authority (MFSA)
Associations and Foundations: Registrar for Legal Persons

The information contained in the register will be accessible from April 1, 2018, to various national competent authorities, financial institutions, and other organizations.

Definition of Beneficial Owner

A beneficial owner is defined as an individual who ultimately owns or controls a legal entity or arrangement through direct or indirect ownership of a sufficient percentage of shares or voting rights or ownership interest. In the case of companies, a shareholding of 25% plus one share or an ownership interest of more than 25% in the entity held by an individual is an indication of direct ownership.

Implementation and Compliance

The implementation of this measure necessitates an in-depth analysis of the ownership structure of entities to determine adequate disclosure of information. Entities are required to set up and maintain an internal beneficial ownership register, which must include:

Official full name
Date of birth
Nationality
Country of residence
Identification number
Type of identification document
Country of issue
Nature and extent of the beneficial interest held by each beneficial owner
Any changes to the beneficial interest

Companies, partnerships, foundations, and associations formed in Malta prior to January 1, 2018, have a period of six months to comply with the new regulations. Trusts do not have such compliance term as it needs to generate tax consequences.

Timeline for Compliance

The measures are immediately applicable for:

Companies
Partnerships
Trusts that generate tax consequences
Foundations
Associations formed as of January 1, 2018

Consequences of Non-Compliance

Non-compliance and non-disclosure with this obligation may lead to a fine or imprisonment in certain circumstances.

Assistance from Grant Thornton

Grant Thornton is well-equipped to assist clients with the implementation of these requirements, including:

Preparation and submission of beneficial ownership forms
Preparation and updating of internal beneficial ownership registers
Compliance with the General Data Protection Regulations (GDPR)