EU Legal Update
The Court of Justice of the European Union in its ruling delivered on 22nd November, 2022 declared invalid the provision which provides that Member States must ensure that information on the beneficial ownership of companies and of other legal entities incorporated within their territory is accessible in all cases to any member of the general public.
Before this ruling, the information regarding the ultimate beneficial owner of companies and of other legal entities incorporated within their territory was accessible to the general public in accordance with EU Directive 2018/843, which was declared invalid in so far as it amended point (c) of Article 30(5) of Directive (EU) 2015/849.
As a result of this judgement, the Malta Business Registry has now limited access to the register of beneficial owners to competent authorities and to subject persons only. A 'subject person' is any legal or natural person carrying out either relevant financial business or relevant activity.
As highlighted by Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, the Ultimate Beneficial Owner is:
- The natural person/s who ultimately own/owns or control/controls that body corporate or body of persons through the direct or indirect ownership of a sufficient percentage of shares, voting rights or ownership interest. Direct ownership or control of the body corporate or body of persons means:
- A natural person(s) who exercise(s) control via other means.
- The natural person(s) holding the position of senior managing official(s) – if, after having exhausted all possible means, no beneficial owner as defined under the previous paragraphs above is identified.
- Effectively this means that any natural person who directly or indirectly holds or controls more than 25% of a company is a UBO.
The above update is a welcome change, and it strengthens the privacy of UBOs, limiting the exposure to parties with a genuine interest as opposed to the general public having access to the UBO registry.
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