Is it possible to remain anonymous when it comes to the Register of beneficial owners?

анонимность бенефициаров.jpg

The FATF requirements clearly prescribe the factor of necessity to disclose the beneficial owners, that in turn is explicitly a "wake-up call" for those people who are the owners of the companies in the Foggy Albion, and if more specifically - for the owners of British companies (LTD), as well as partnerships (LLP).

Within the framework of fulfilling the above mentioned requirements, it is obligatory to submit information about controlling persons of all operating partnerships and companies in England until 30 June of the current (2017) year. The data is entered in the PSC Register (Special Register of persons with significant control).

Despite the fact that the FATF requirementsdo not currently concern owners of the SLP partnerships in Scotland, the processes of public discussions of reform, aimed at tightening the requirements to SLP that include the requirement to disclose the beneficial owners, have already begun.

Companies (LTD) and partnerships (LLP, SLP) are the most commonly used instruments for taxation in corporate structures.

The House of Commons of the United Kingdom approved Brexit, so that a number of reasons has appeared due to which business owners are already starting to think about the problem of submitting information to the Register. UK legislation, due to start of the process of Brexit, will become more autonomous in relation EU laws.

Requirements for establishment of registers of the Beneficial owners according to the pattern of "anti-money laundering" Directive of the European Union will no longer cover the United Kingdom.

It is probable that the establishment of centralized registers of Beneficial owners will affect the following British Overseas Territories:

  • Anguilla;
  • Bermuda;
  • Gibraltar;
  • British Virgin Islands;
  • Cayman Islands;
  • Turks and Caicos Islands.

As well as crown dependencies:

  • Isle Of Man;
  • Bailiwick of Jersey;
  • Bailiwick of Guernsey;
  • Alderney.

In April 2016, Great Britain concluded a number of agreements with the above mentioned jurisdictions, and the latters, in turn, pledged to create a registers similar to those existing in the UK for collection and exchange of information on Beneficial owners. In certain of these countries the legislative frameworks have already been developed, the electronic platforms and the implementation of this type of exchange are inthe condition of practical completion.

Loss of confidentiality of assets’ ownership and banking secrecy is considered as helplessness and vulnerability of business.

Public access to information about the owners obviously demonstrating the facts of information hiding has a provocative character for the tax authorities.The owners of business can be imputed with adding knowingly false data to tax declaration, violation of currency laws and other serious infringements.

In addition, the divergence of data concerning the Beneficial owners of the company in the PSC register and in the bank can result in blocking of account of the company by the bank and other similar problems with the company’s account.

Interim solution may be such as liquidation of operating companies with subsequent registration of new ones in other jurisdictions, or application of so-called "dilution" (when the number of Beneficial owners increases). In rare instances the company's redomiciliation is applied, which leads to the preservation of the company name, but at the same time change of its residency.

Used solutions are imperfect and have a number of shortcomings:

  • There is a necessity to reshape the entire corporate structure;
  • The need for opening new accounts;
  • The need for changes in trade flows.

In turn, alienation of the right of ownership, while retaining the right to obtain benefits from it, is an effective way to solve the problem being discussed. Such solution is possible/achievable using the trust institutions, for example - a trust or a private foundation. When using them in business structure, anonymity of the Beneficial owners of the company is preserved.

Proper selection of the trust instrument’s structure may even allow its owner to obtain such status as: “No persons with significant control”.

The founder can legally disassociate himself from his property, while continuing to obtain benefits from the assets, and this is the main feature of trusts and private foundations. Trustee or foundation will be title owner of the property, which was transferred to trust or private foundation.

Taking into account full legitimacy and effectiveness of ownership of the British company by means of trust or foundation, this method of preserving the anonymity of persons with significant control (PSC) over the company can be fairly considered as optimal and correct.

Worldwide trendsof deoffshorizationand establishment of tax and banking transparency require new solutions for the business, which should necessarily be focused on the long term.Contact the lawyers of the company Law&Trust International.

We will help you make the right choice of suitable instrument regarding confidentiality that will have impact on the safety of your business.