According to the new terms proposed yesterday, the days of shadow ownership or control of the company will be numbered to enhance the transparency of the corporate sector.
Money laundering is one of the main goals, but the recommendations will extend to many corners of corporate life here.
The changes will be widespread and affect non-listed and non-financial institutional firms, as well as foreign companies and LLPs registered here.
Listed companies are exempted as they are subject to the Securities and Futures Act and the Monetary Authority of Singapore regulates financial institutions.
The amendment addresses the main obstacles to transparency by requiring those entities to maintain a register of their beneficial owners or controllers.
This would be an upgrade to the current system and there is no statutory requirement for the maintenance of the Register of Ownership Information.
This means that these entities must maintain a clear and up-to-date record of direct or indirect control of the business, giving the authorities a clearer understanding of their ownership.
The proposed change is an amendment to the Companies Act and the Limited Liability Partnership Act, filed yesterday by the Ministry of Finance (MOF) and the Accounting and Corporate Regulatory Authority (Acra), for public consultation.
The aim is “to ensure that Singapore’s transparency levels are in line with international standards,” the Treasury and Acra said.
In a September report, the Financial Action Task Force noted that Singapore’s current measures were not sufficient to ensure timely and accurate and up-to-date information on the beneficial owners.
Gibson Dunn partner Robson Lee said: “Unknown owners (foreign companies and LLPs) may be a means of illegal capital inflows and warehousing through Singapore or through Singapore.
“They could, for example, pool these illicit funds into companies in Singapore for office and industrial property purchases and even set up an investment holding company to buy other businesses – all money laundering.
However, the company may have additional compliance costs.
Stefanie Yuen Thio, co-managing director of TSMP, noted that while these new provisions would enable Singapore to adopt the best global approach to combating money laundering and the financing of terrorism, it could also produce “thick paperwork”.
For full story, read here.
whwong@sph.com.sg
This article was first published on Dec 28, 2016.
Get a copy of The Straits Times or go to straitstimes.com for more stories.
