Hong Kong Significant Controllers Register: What is It & Navigating Compliance

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Welcome to our guide on the Hong Kong Significant Controllers Register (SCR). If you’re running a company here, it’s important to know about the SCR. This register is all about who has significant control over your company. We’ll explain what the SCR is, why it matters, and how you can make sure your business follows the rules. Plus, we’ll introduce how TopFDI can help you with this process, especially if you’re a multinational company. Let’s dive in!

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What is the Hong Kong Significant Controllers Register?

The Significant Controllers Register (SCR) is a key part of Hong Kong’s efforts to boost transparency in business operations. Introduced under the Companies (Amendment) Ordinance 2018, the SCR is a record that companies in Hong Kong must keep. Its main purpose is to list out individuals or legal entities that have significant control over the company. This move is part of a larger plan to meet international standards in fighting against money laundering and terrorism financing.

Who is a Significant Controller?

A significant controller in Hong Kong is either a person or a legal entity that has a considerable influence on the company. But what does this mean exactly? Here are some clear examples:

  • Shareholding or Capital Interest: If a person or entity owns more than 25% of the company’s shares or capital, they are considered a significant controller.
  • Voting Rights: Holding more than 25% of the voting rights in the company also makes one a significant controller.
  • Board Control: If a person or entity can appoint or remove a majority of the board of directors, they have significant control.
  • Influence or Control: Even without direct shareholding or voting rights, if someone can significantly influence or control the company’s decisions, they are deemed a significant controller.
  • Control over Trusts or Firms: If a person has influence or control over trusts or firms that meet any of the above conditions in relation to the company, they are also considered significant controllers.

In simple terms, a significant controller is someone who has a big say in how the company is run, whether through ownership, voting rights, or other forms of influence. Identifying these individuals or entities is crucial for maintaining transparency and adhering to legal requirements in Hong Kong’s corporate world

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Hong Kong’s Legal Requirements for Significant Controllers Register

In March 2018, Hong Kong introduced the Companies (Amendment) Ordinance 2018, a significant step towards enhancing corporate transparency. This amendment brought into effect the requirement for companies to maintain a Significant Controllers Register (SCR).

Key Requirements for Companies

  • Identifying Significant Controllers: Companies must take reasonable steps to figure out who their significant controllers are. This involves looking at shareholdings, voting rights, and other forms of control or influence over the company.
  • Maintaining the SCR: Once identified, these details must be recorded in the SCR. This register should include names, contact details, and the nature of control the significant controllers have over the company. It’s not just a one-time task – the SCR must be kept up-to-date.
  • Location of the SCR: The SCR needs to be kept at the company’s registered office or another place in Hong Kong. If it’s not at the registered office, the company must inform the Companies Registry about its location.
  • Accessibility for Law Enforcement: The SCR isn’t just an internal document. It must be accessible for inspection by law enforcement officers upon request. This means companies need to be ready to show their SCR if asked by authorities.
  • Appointing a Designated Representative: Companies are required to appoint a person responsible for assisting in SCR matters. This person can be a member, director, or employee who resides in Hong Kong, or a professional like an accountant or lawyer.

The Hong Kong Significant Controllers Register Process

Navigating the process of identifying and registering significant controllers in Hong Kong can seem daunting, but it’s a crucial step for compliance. Here’s a straightforward, step-by-step guide to help you through this process:

Step 1: Identifying Significant Controllers

  1. Review Company Documents: Start by examining your company’s records, such as the register of members, articles of association, and shareholder agreements. This will help you identify individuals or entities that may have significant control.
  2. Consider Various Interests: Look at all forms of control or influence, including shareholdings, voting rights, and rights to appoint board members.
  3. Check for Joint Arrangements: Sometimes, control or influence might be exercised through joint arrangements or multiple parties. Be sure to consider these scenarios.
  4. Issue Notices if Necessary: If you believe someone is a significant controller, or if someone might know who the significant controllers are, send them a notice to confirm their status or seek information.

Step 2: Preparing the Significant Controllers Register

  1. Gather Required Information: For each identified significant controller, collect full name, contact details, ID or passport number, the date they became a significant controller, and the nature of their control.
  2. Choose a Format: The SCR can be maintained in English or Chinese. Ensure it’s clear and legible. Click here for the Significant Controllers Register form.
  3. Record Even if No Controllers are Identified: If you’re still in the process of identifying significant controllers, or if there are none, this should be explicitly stated in the SCR.

Step 3: Appointing a Designated Representative

  1. Who Can Be Appointed: The designated representative must be either a member, director, or employee of the company who resides in Hong Kong, or a professional like an accountant or lawyer.
  2. Responsibilities: This person will be responsible for assisting law enforcement officers in matters related to the SCR.

Step 4: Maintaining and Updating the SCR

  1. Keep it Updated: Regularly review and update the SCR to reflect any changes in the significant controllers’ information.
  2. Location of the SCR: Keep the SCR at the company’s registered office or a prescribed place in Hong Kong. If it’s not at the registered office, notify the Companies Registry of its location.
  3. Accessibility: Ensure that the SCR is readily accessible for inspection by law enforcement officers.

Step 5: Compliance and Reporting

  1. Notify the Companies Registry: If the SCR is kept at a location other than the registered office, file Form NR2 to inform the Registry.
  2. Respond to Law Enforcement Requests: Be prepared to show the SCR to law enforcement officers upon request.

By following these steps, companies in Hong Kong can effectively identify their significant controllers and maintain a compliant Significant Controllers Register. Remember, this isn’t just a legal requirement; it’s a step towards greater corporate transparency and integrity in the global business environment.

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TopFDI Can Be Your Designated Representative in SCR Compliance

Navigating the Significant Controllers Register (SCR) requirements in Hong Kong can be complex, especially for multinational companies unfamiliar with the local legal landscape. This is where TopFDI steps in, offering expert assistance to ensure seamless compliance with SCR regulations.

TopFDI’s SCR Compliance Services

  • Expert Guidance on Identifying Significant Controllers: TopFDI provides professional advice on how to identify significant controllers within your company, ensuring that all relevant individuals or entities are accurately pinpointed.
  • Assistance in Preparing and Maintaining the SCR: Our team helps in compiling and maintaining the Significant Controllers Register, ensuring that all the necessary information is correctly recorded and regularly updated.
  • Legal and Regulatory Updates: With ever-evolving laws and regulations, TopFDI keeps you informed about any changes in SCR requirements, helping your company stay compliant at all times.

Designated Representative Services

  • Appointment of a Designated Representative: TopFDI can act as your designated representative, a requirement under the SCR regulations. Our representatives are well-versed in Hong Kong’s legal requirements and can efficiently liaise with law enforcement agencies.
  • Handling Law Enforcement Inquiries: In case of any inquiries from law enforcement regarding your SCR, TopFDI’s designated representatives will handle these interactions, ensuring that your company responds appropriately and in a timely manner.

In summary, TopFDI is not just a service provider but a partner in ensuring that your business navigates Hong Kong’s corporate regulations smoothly and efficiently. Our dedicated team is committed to providing tailored solutions that cater to the specific needs of your company, ensuring peace of mind and allowing you to focus on growing your business in Hong Kong.

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Conclusion

In conclusion, understanding and adhering to the Significant Controllers Register (SCR) requirements is more than a regulatory necessity for companies in Hong Kong—it’s a commitment to corporate transparency and a stand against financial crimes. The SCR is a crucial tool in the global fight against money laundering and terrorism financing, and its importance in the corporate landscape of Hong Kong cannot be overstated.

For multinational companies operating in this dynamic business environment, navigating the SCR requirements can seem daunting. However, with the right guidance and support, it becomes a manageable and integral part of your business process. This is where the expertise and services of TopFDI become invaluable. By partnering with TopFDI, companies gain not only compliance assurance but also a strategic advantage in understanding and navigating the complexities of Hong Kong’s corporate regulations.

TopFDI’s comprehensive approach, which includes expert assistance in identifying significant controllers, maintaining the SCR, and providing a designated representative, ensures that your business stays ahead of legal obligations. This support extends beyond SCR compliance, encompassing a range of services crucial for successful business operations in Hong Kong.

As we move forward in an era where transparency and compliance are at the forefront of international business standards, having a knowledgeable and reliable partner like TopFDI can make all the difference. Embrace these requirements not as a burden, but as an opportunity to reinforce your company’s commitment to ethical business practices and to thrive in Hong Kong’s vibrant economy.

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