News: Hong Kong licensed the activity of service providers

Changes that influenced ordinance on the companies of 2018 in Hong Kong

Aspiration of the international community to bring offshore jurisdictions to a more controlled functioning, force business to revise its own structural features in the direction of transparency and openness.

To this end, the recent changes to Ordinance on companies dated January 24, 2018, demonstrate Hong Kong's intention to  comply scrupulously with the demands made on it by the Financial Action Task Force on Money Laundering (FATF).

In addition, some adjustments have been made with regard to measures to combat money laundering activities, as well as counteracting the financing of terrorist activities.

Thus, the following amendments have come into force:

• need to identify, as well as to maintain a register of persons holding significant control over the company,
• providing of information on such persons to Hong Kong law enforcement officials on their first request.

The register will contain detailed information on persons who have significant control over the company, i.e. who have an advantageous opportunity to manage the company, due to the possession of a large shareholding or other influence on the board of directors. Such information will not be publicly available, with the availability of data only about direct directors and shareholders.

If the abovementioned requirements are not met, the company may be subject to the fine of  50 000 HKD.

In connection with the introduction of new changes, providers of any corporate and other consulting services are required to issue a license from the registrar of the company before carrying out direct activities.

Thus, providers are obliged, within a period of 180 days from the moment of adoption of amendments to the Law on Companies, to apply for testing in order to obtain a license. If this requirement is violated, it will be possible for the company to impose a fine in the amount of up to 100,000 HKD and apply imprisonment against the person in charge for up to six months.

The availability of the license can be checked  online: https://www.tcsp.cr.gov.hk/tcspls/index.

The application of the adopted amendments  will result in  certain increase in the cost of the services of the responsible registrar, that will be included in the total cost of annual maintenance of companies registered in Hong Kong.