In today’s business world, there is a greater than ever demand for transparency. Primasia Corporate Services, as well as other companies incorporated in Hong Kong, will need to follow new regulations that took effect on March 1, 2018, with the changes in regards to the Significant Controller Register (SCR) and Designated Representative (DR) within each of those companies. The changes are known as the Hong Kong Companies Ordinance Agreement 2018 and are there to paint a clearer picture of the corporate beneficial ownership within each company that incorporates and does business in Hong Kong.
The new Ordinance has a lot of details included, and it begins with each company being asked to clearly define the people who have significant control over their company. This also means that an up to date SCR must be maintained, with the details contained within made available to law enforcement officers should the need arise.
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A Designated Representative has to be named, with the person chosen expected to be able to assist law enforcement officers whenever they need information pertaining to the SCR. The Significant Controller Register is expected to be updated whenever changes are made, and the details of the SCR need to be held in the registered office of each company, or in a prescribed location within Hong Kong.
In order to be deemed a significant controller, that person or entity needs to meet at least one specific condition outlines in the ordinance. These conditions include the following:
- Own more than 25% of the shares issued by the company, either directly or indirectly.
- Has more than 25% of the voting rights in the company, which can again be either directly or indirectly.
- Is able to appoint or remove members of most of the board of directors.
- Can, or already does, hold a significant amount of influence on the decisions made within the company.
Those are just a few or the requirements needed to become a significant controller, and while things are not quite so strict when choosing the DR, there are still condition in place, which includes:
- A company employee, member, or director of the company who is native to Hong Kong.
- A professional in the accounting or legal profession.
It should be noted that if there is no-one within the company who meets the requirements of the DR, a third-party service provider is allowed to fill the role.
Failing to comply with the new requirements is a criminal offence, a company, as well as every responsible person within, can be subjected to a fine of $25,000. Transparency is very serious business, and this new Ordinance, as well as the fines attached to it, prove just how serious it is. Primasia Corporate Services has taken every step to ensure that our clients are compliant with the new Ordinance. If you have any questions or need our support, we would be happy to assist.
Connect with Primasia Corporate Services Limited
Hong Kong Headquarters: Suite 1106-08, 11/F., Tai Yau Building, No. 181 Johnston Road, Wanchai, Hong Kong
Website: https://www.primasia.hk/
Twitter: https://twitter.com/PrimasiaHK
Credit: Prosperity Research Digital Agency(PRDA) provides branded content catered to your business, in English, and Traditional or Simplified Chinese.
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