UK Companies House reform

Companies House, the United Kingdom companies’ registry, will be reformed. Based on results of the public discussion, the reform will include the following:  

  1. In regard to the information on company directors and controlling persons:
    • compulsory identity verification for all directors and people with significant control (PSC) of UK registered companies;
    • compulsory identity verification for all individuals who file information on behalf of a company;
    • company incorporations and filings will still be allowed to be made via agents. However, in future only properly supervised agents will be able to file information.
  2. In regard to the accuracy and usability of data on the companies register:
    • Registrar of Companies will be allowed to query information submitted to Companies House;
    • powers of the Registrar to remove information from the register to better ensure its accuracy will be extended;
    • some aspects of accounts filings, including the exemptions that allow companies to submit micro or dormant accounts will be reviewed;
  3. In regard to personal data protection:
    • restrictions on removal of personal information from the register will be lifted;
  4. In regard to measures to prevent abuse of corporate entities:
    • entities subject to AML regulations will be obliged to report discrepancies between the public register of companies and the information they hold on their customers;
    • Companies House will be able to carry out cross-referencing their data against other dada sets;
    • limited partnerships (LPs) will be allowed to be “struck off” following a court order;
    • Companies House will have a power to query, and possibly reject, company names;
    • The procedure and circumstances of issue of certificates of good standing will be revised.
    • It is emphasized that the reform will not affect the usual incorporation timeframes for UK companies, most of which are currently registered within 24 hours.

Seychelles to launch AML/CFT three-year strategy

The Government of Seychelles announced the launch of the National Anti-Money Laundering and Countering the Financing of Terrorism Strategy. It aims to close the gaps that have been pointed out recently by international organizations and separate countries.

Such gaps lead to increased costs for business when interacting with foreign partners, obstacles with correspondent banks when making international payments, and also cause reputation damage to the jurisdiction.

The strategy provides for changes to a number of existing laws and the adoption of new ones in accordance with international AML/CFT standards. The strategy is to be fully implemented by the end of 2022.  

The Seychelles currently has the Anti-Money Laundering Act, 2006 and the corresponding Regulations 2012.

BVI: public access to the register of beneficiaries

The Government of the British Virgin Islands (BVI) has announced its commitment to provide public access to the country’s beneficial ownership register, with some exceptions, by 2023. The regime will be based on the standards set in the EU 5th Anti-Money Laundering Directive, but will not completely follow the British model.

Other UK Overseas Territories and Crown Dependencies have already announced their plans to open their beneficial owners’ registers to the public. The original deadline set by the UK for the establishment of public BO registers by the Overseas Territories was December 2020, but this timeline was subsequently extended by three years following protests from those Territories). While the BVI have been showing uncertainty in this matter for quite a long time.

The BVI Government pointed out that the already established Beneficial Ownership Secure Search System (BOSS) is one of the best systems of its kind and allows law enforcement agencies to receive the necessary information in real time. In March 2019, the BVI Government said it intended to convince the UK (that insists on opening the register to the public) that BOSS was the best alternative to public registers being created under the pressure of the United Kingdom. 

According to the BVI Prime Minister, the obligation to make the register public is accepted with a number of reservations and involves proportionate data protection measures. This is caused by concerns that the information about beneficial owners, if disclosed, may be used for improper purposes, as well as may reduce the popularity of BVI for registering a business and result in the move of companies to other jurisdictions.

Changes to the UAE economic substance rules

The United Arab Emirates has made important changes to economic substance rules that have been in force in the country from 1 January 2019.

The revised economic substance rules are set forth in the Cabinet of Ministers Resolution No.57 of 2020 and in the Guidance for their implementation approved by the Ministerial Decision No.100 of 2020.

According to the new rules some licensees are exempt from economic substance requirements:

  1. investment funds;
  2. companies resident for tax purposes in a jurisdiction outside the UAE;
  3. companies wholly owned by UAE residents and:
    • that are not part of a multinational group; and
    • operating only in the UAE;
  4. branches of foreign companies the income of which is subject to tax in a jurisdiction outside the UAE; 
  5. other licensees which may be determined by a decision of the Minister of Finance.

At the same time, belonging to these categories does not mean exemption from the annual obligation to notify the regulator about the relevant activity and income from it, as well as to provide information and documents supporting the right to exemption.

Also new penalties have been introduced for failure to submit “economic substance” notifications and reports and a number of other changes.

The UAE companies should review whether the updated requirements apply to them and resubmit the appropriate notifications for 2019 financial year to the regulator.

Read more about the new rules in our review.  

Cayman Islands: more information to be submitted to company register

Amendments to the Companies Law of the Cayman Islands provide for the obligation to submit to the Registrar of Companies some additional company information from 1 September 2020. From 1 October 2020, the online access to such information will be provided to any person upon their request, subject to the payment of a fee of KYD 50 (around USD 61).

From 1 September 2020, the Registrar will maintain a register that includes information contained in a company’s memorandum of association, in particular:

  1. the name of the company;
  2. the part of the Cayman Islands in which the registered office of the company is proposed to be situated;
  3. the amount of the company’s capital, the number of shares into which it is divided and the fixed amounts thereof;
  4. the names and addresses of the subscribers to the memorandum and the number of shares taken by each subscriber;
  5. the date of execution of the memorandum of association;
  6. the date of filing of the memorandum of association;
  7. the number assigned to the company;
  8. in the case of a company limited by guarantee or a company that has no limit placed on the liability of its members – the relevant statement;
  9. the nature of the business; and
  10. the date of the end of the company’s financial year.
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