Singapore Tightens Grip on Beneficial Ownership with New Act
In a move aimed at increasing transparency in tracing the beneficial ownership of companies and foreign companies, Singapore’s Parliament has passed the Companies and Limited Liability Partnerships (Miscellaneous Amendments) Act.
Expanding Definitions of Nominee Shareholders
The Act seeks to expand the scope of persons deemed “nominee shareholders” under Section 386ALB(7) of the Companies Act. This includes individuals who are accustomed or obligated to vote in accordance with the directions of another person, or those who receive dividends on behalf of another individual. This revised criteria aims to capture intermediate holding companies within a group structure, which may not meet current definitions but still fulfill certain obligations.
Central Register of Nominee Shareholders
The Act also proposes the creation of a central register of nominee shareholders maintained by the Accounting and Corporate Regulatory Authority (ACRA). Companies and foreign companies will be required to lodge particulars of nominee shareholders with ACRA, along with any updates, failing which they may face penalties.
- This new requirement aims to increase transparency and provide authorities with more information for anti-money laundering efforts.
- While this may result in increased compliance costs, it is intended to ensure that companies maintain accurate records of their beneficial ownership.
Increased Penalties for Non-Compliance
The Act increases the penalties for a company’s or foreign company’s failure to maintain or update its register of nominee shareholders from S$5,000 to S$25,000. This change aims to deter non-compliance and ensure that companies take their obligations seriously.
A Step in the Right Direction
The new legislation is seen as a step in the right direction by authorities, who are working to address concerns surrounding money laundering. While it may result in additional costs for companies operating in Singapore, it is intended to increase transparency and provide a more accurate picture of beneficial ownership.
Overall, the Companies and Limited Liability Partnerships (Miscellaneous Amendments) Act aims to strengthen Singapore’s anti-money laundering regulations by increasing transparency and providing authorities with more information about beneficial ownership.