Every Hong Kong company — including the one you incorporated last month — must keep a Significant Controllers Register. It is not filed with the government and it is not public, which is exactly why it gets forgotten. It is also one of the first things a bank, an auditor or the Companies Registry will ask to see. Here is what the register is, who goes in it, and what non-compliance costs.
What the SCR is
Since 1 March 2018, under the Companies (Amendment) Ordinance, every company incorporated in Hong Kong is required to identify the people who ultimately own or control it and record them in a Significant Controllers Register. The only material exemption is for companies listed on the Hong Kong Stock Exchange. Private companies of every size — trading, holding, dormant — are all in scope.
The point of the register is transparency of beneficial ownership for anti-money-laundering purposes. The register itself is kept by the company, not lodged with the Registry, and it is not open to the public.
Who counts as a significant controller
A significant controller is any individual or legal entity that meets at least one of five tests in relation to the company:
- holds, directly or indirectly, more than 25% of the issued shares (or of the capital or profits, for a company without share capital);
- holds, directly or indirectly, more than 25% of the voting rights;
- holds the right to appoint or remove a majority of the board;
- has the right to exercise, or actually exercises, significant influence or control over the company;
- has significant influence or control over a trust or firm that itself meets one of the tests above.
The tests look through corporate layers. If your Hong Kong company is owned by a BVI holding company that is in turn owned by you, both the BVI entity (as a “registrable legal entity”) and you (as the individual controller) may need to appear. Getting this chain right is where most registers go wrong.
What the register must contain
- the controller’s full name and correspondence address;
- identity details — HKID or passport number for an individual; legal form, registration number and governing law for an entity;
- the nature of control (which of the five tests applies) and the date the person became registrable;
- the name and contact details of the company’s designated representative;
- if the company genuinely has no significant controller, a statement to that effect.
An empty register is not the same as a compliant one. A company with no identifiable controller must record that fact explicitly.
The designated representative
Every company must appoint at least one designated representative whose job is to assist law-enforcement officers with the register on request. The representative must be either a director, employee or member of the company who is a natural person resident in Hong Kong, or a Hong Kong accounting professional, legal professional, or a licensed Trust or Company Service Provider. For foreign-owned companies with no local staff, a licensed TCSP typically fills this role — it is one of the standard services we provide as part of a company-secretary engagement.
Where it is kept and how it is maintained
The register is kept in English or Chinese, in paper or electronic form, at the company’s registered office in Hong Kong. If it is kept at another address in Hong Kong, the company must notify the Registry on Form NR2 within 15 days. In practice, when we act as registered office, the register lives with us and is produced on request.
Maintenance has real deadlines. When a controller is identified or their details change, the particulars must be entered within seven days of being confirmed. The company must take reasonable steps to identify its controllers — including serving notices on people it believes are registrable — and recipients of those notices must respond within one month. Entries must be retained for six years after a person ceases to be a controller.
Who can inspect it
Only two groups have a right to inspect the SCR: the significant controllers already entered in it, and specified law-enforcement officers — the police, Customs, the Inland Revenue Department, Immigration, the financial regulators and the ICAC among them. It is not a public document, but it must be available to those officers on demand.
What non-compliance costs
- Failing to keep or properly maintain the register: a fine at Level 4 (currently HK$25,000), plus HK$700 per day for a continuing offence.
- Failing to comply with an SCR notice within one month: a fine at Level 4.
- Knowingly or recklessly making a false or misleading statement in the register: on summary conviction up to HK$100,000 and six months’ imprisonment; on indictment up to HK$300,000 and two years.
Liability attaches to the company and to every responsible person — in practice, its directors. For a small private company this is one of the few areas of company law that carries a genuine personal exposure.
Where NGL comes in
For every company we act for as company secretary, we set up the SCR at incorporation, map the ownership chain correctly through any holding entities, act as designated representative where required, and keep the register current as the shareholding changes. It is routine work — but only if it is actually done.
This article is general information on Hong Kong company law, not legal advice. The tests and penalties are those in force at the time of writing; we’ll advise on the position for your specific structure.