Financial Crime World

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Beneficial Ownership Determination in Singapore: A New Era of Transparency

In the wake of the Panama and Paradise Papers scandal, governments worldwide have been forced to re-examine their approaches to offshore companies and beneficial ownership determination. The Financial Action Task Force (FATF) has emphasized the need for enhanced transparency in this area, particularly with regards to Singapore.

New Regulations in Singapore

In response to these recommendations, the Accounting and Corporate Regulatory Authority (ACRA) in Singapore has implemented stricter regulations on corporate entities and corporate secretaries. These changes aim to ensure higher standards of compliance and prevent the misuse of companies for money laundering and terrorist financing purposes.

Key Changes: Effective March 31, 2017

Under the new regime, Singapore-registered companies, limited liability partnerships (LLPs), and foreign companies will be required to maintain a register of controllers. This register must include information such as:

  • Full name
  • Residential address
  • Nationality
  • Identification particulars
  • Date of birth
  • Date on which the person becomes or ceases to be a controller

Who is the Beneficial Owner?

According to FATF, the beneficial owner is defined as the natural person who ultimately owns or controls a customer, or the natural person on whose behalf a transaction is being conducted. This definition centers on effective significant control and ownership, which includes individuals who exercise ultimate effective control over a legal person or arrangement.

Key Obligations under the New Regime

Companies and LLPs required to maintain a Register of Controllers must:

  • Take reasonable steps to identify their controllers and obtain information on their controllers
  • Maintain registers of controllers at prescribed places
  • Ensure that registers are up to date by updating within 2 days of receiving information on controllers
  • Declare in their annual return filed with ACRA that their registers of controllers are kept up to date
  • Make registers available to the Registrar and law enforcement authorities upon request, but not to the public

International Developments

Singapore is not alone in its efforts to enhance beneficial ownership determination. Other jurisdictions have also implemented or proposed similar measures:

  • Hong Kong: Mandatory register of persons with significant control (PSC)
  • USA: State-level register of beneficial ownership and plans for a central non-public register
  • Germany: Beneficial Ownership Register (BOR) for all German companies
  • United Kingdom: Central public register of BOs in 2016
  • France, Netherlands, Nigeria, Australia, New Zealand, Ireland, BVI: Exploring or committed to implementing central public registers

As the global fight against money laundering and terrorist financing continues, Singapore’s efforts to enhance beneficial ownership determination serve as a significant step forward.