What have been the Malta Business Registry’s most significant achievements in the two years since its establishment?
While the MBR was established two years ago, it is important to remember that the Registry of Companies has been in operation since 1965. Company law was introduced in Malta with the Commercial Partnerships Ordinance of 1962. The Register was originally the responsibility of the Commerce Department, a governmental unit. Then, following the introduction of the new Companies Act in 1995, the Registry of Companies was housed within the Malta Financial Services Authority (MFSA) in 1997. In April 2018, the Registry of Companies became a stand-alone agency as the Registry of Companies Agency, which was later renamed the Malta Business Registry in June 2019.
The MBR’s road to independence wasn’t without its challenges. The de-merging from the MFSA was a milestone, as was moving to the MBR’s new premises in Żejtun. A new set-up was organised with a team of professionals hailing from many different areas of expertise and backgrounds.
The MBR has also widened its role and introduced, among others, the Beneficial Owner Register, following EU directives. The MBR also took over the responsibility of the Register of Foundations and Associations and included within its premises an office for the administration of international taxation and capital gains in order to provide a one-stop-shop to clients. Furthermore, these two years have been characterised by the implementation of the MoneyVal recommendations, which led to over 10,000 inactive companies being struck off the Register.
Last year, the MBR launched a five-year Strategic Plan. What are the main aims of this plan and how will they be achieved?
We used our first year to lay our foundations as a new agency. The next natural step for the MBR was to develop our strategy and vision for the next five years. The Strategic Plan has four pillars: Internationalisation, ICT, Changing Purposes, and Knowledge and Learning. The strategic objectives developed from these four pillars aim to keep the MBR abreast of continually evolving legal frameworks as well as regulations and measures regarding anti-money laundering and the fight against financial crime.
Our Strategic Plan also provides the tools to improve the MBR’s processes and provision of service excellence via the implementation of distributed ledger technology (blockchain) in a new online system. This change is to be implemented swiftly and will create a business-friendly relationship with relevant stakeholders. Finally, the Strategic Plan outlines what the MBR must do to acquire more exceptional talent and to strengthen the existing team by expanding employees’ knowledge through learning.
What legislative amendments were implemented in 2020?
Following the 2020 Amendment Regulations, additional investigative powers have been granted to the Registrar of Companies (the “Registrar”) and the requirement of filing an annual BO form has been introduced with immediate effect.
Previously, the Regulations imposed no obligation for the filing of supporting documentation for a beneficial owner. Now, the 2020 Amendment Regulations provide that when submitting a declaration containing information on the beneficial owner, a certified true copy of an official identification document for each beneficial owner (such as a passport or identity card) must also be submitted to the Registrar. Furthermore, the Registrar has the power to ask for any document/information in order to verify information submitted.
A culture of continuous improvement, effective decision-making and orderly transition
The powers of the Registrar have been extended. Regulation 9 had already provided the Registrar with the power to refuse to register any company document in which the beneficial ownership information was not accurate or up to date. However, following the amendments in 2020, the Registrar may also restrict a newly proposed company from being incorporated if the proposed directors already act as directors in other Maltese companies that have failed to submit information on beneficial owners.
The Registrar is also now empowered to take the necessary steps and ask for any information or documentation deemed essential to ascertain the correctness of the beneficial ownership information submitted both prior to incorporation and on an ongoing basis. In fact, a total of 300 applications for new companies have been rejected and 11 applications for other legal organisations (such as foundations and associations) have also been rejected. Failure by a Maltese company to disclose its beneficial owners will lead to its name being struck off the Register.
What mechanisms and regulations has the MBR introduced to help companies address the difficulties they are facing due to the COVID-19 pandemic?
For companies affected by the COVID-19 pandemic, we extended the period for filing annual returns and financial statements. No fines were imposed for the late filing of these documents, provided they were filed within a stipulated period.
This same approach was also applied to companies unable to submit other statutory notifications with the Registrar because of the restrictions imposed to limit the pandemic’s spread and effects.
The Companies Act (Public Companies – Annual General Meetings Regulations) 2020 applied to those public companies whose annual general meeting was due during the COVID-19 pandemic. Due to the closing of venues and restrictions on gatherings imposed by the Superintendent of Public Health, the annual general meetings of public companies could not be held because of the large number of shareholders needing to attend. So, the new Regulations applied to such companies. The period for holding the annual general meeting was extended by five months and the meeting could be held virtually. We also started accepting documents signed electronically instead of in wet ink.
How critical is the Register of Beneficial Ownership held by the MBR, including legal entities (foundations and associations)?
Article 30 of the 4th AMLD and 5th AMLD, relating to the Register of Beneficial Owners of Commercial Partnerships, was transposed into Maltese law under the Companies Act (Register of Beneficial Owners) Regulations (LN 374 of 2017), which among other things require commercial partnerships to maintain information on their beneficial owners and to file this information with the MBR.
The Register of Beneficial Owners’ purpose is to improve corporate trust and transparency in Maltese-registered commercial partnerships by making it clear – to law enforcement agencies, regulators, obliged entities, other businesses and the public – who ultimately owns and controls Maltese commercial partnerships.
The MBR’s role is to ensure there is adequate, accurate and timely information on the beneficial ownership and control of commercial partnerships, and that the information can be obtained or accessed promptly by competent Authorities, subject persons and the public. The same applies to other legal entities, such as foundations, associations, voluntary organisations and sports organisations.
The Register of Beneficial Owners of all legal entities is easily accessible via the MBR’s portal, where there is a centralised register of all commercial partnerships (including companies and other legal organisations as specified above).
The sector in which the MBR operates is a highly dynamic one. How does the MBR adapt to this constant change while planning for the future?
The corporate industry is indeed a dynamic one. As a public sector entity, new roles, such as the registration of other legal organisations, compel us to adapt in a structured manner. That was the drive behind the creation of the MBR’s Strategic Plan. In fact, it was brand-named ahead2025 to reflect the need to think and plan. The MBR adapts to constant change by accepting the need to change in order to evolve and adapt. Such acceptance instils a culture of continuous improvement, effective decision-making and orderly transition. Through bottom-up participation, we achieve change within our workforce and can involve our clients in our approach to adaptation and evolution.