Hong Kong SCR Requirements: Compliance Under Cap. 622

Hong Kong SCR Requirements Guide

The Significant Controllers Register (SCR) is a statutory requirement for all companies incorporated in Hong Kong under the Companies Ordinance (Cap. 622). Effective from 1 March 2018, every company must identify its significant controllers, maintain a register at its registered office or a prescribed place in Hong Kong, and appoint a designated representative to assist law enforcement. Understanding the hong kong scr requirements is essential for compliance, as the register is not open to public inspection but must be available for inspection by law enforcement officers upon request.

What Is the Hong Kong SCR?

The Significant Controllers Register is a record that every Hong Kong company must keep, listing individuals or entities that have significant control over the company. The requirement was introduced by the Companies (Amendment) Ordinance 2017 and came into effect on 1 March 2018. The register forms part of the company's statutory registers, alongside the register of members, register of directors, register of company secretaries, and register of charges. The purpose of the SCR is to enhance corporate transparency and assist law enforcement in identifying the ultimate owners and controllers of companies, in line with anti-money laundering (AMLO) objectives under Cap. 615.

Significant Controller 25% Threshold

A significant controller is generally an individual or a legal entity that holds more than 25% of the issued shares or voting rights in the company. The 25% threshold is the primary test for determining significant control. A person who holds, directly or indirectly, more than 25% of the company's issued shares or more than 25% of the voting rights is a significant controller. Additionally, a person who has the right to appoint or remove a majority of the board of directors, or who otherwise exercises significant influence or control over the company, also qualifies as a significant controller. The company must take reasonable steps to identify all significant controllers and record their particulars in the register.

Hong Kong Designated Representative

Every Hong Kong company must appoint a designated representative to assist law enforcement officers with access to the Significant Controllers Register. The designated representative is the person whom the company designates to provide the register for inspection when requested by a law enforcement officer. The designated representative must be a member, director, or company secretary of the company, or a person who is ordinarily resident in Hong Kong and is authorised by the company. The company must ensure that the designated representative is available during business hours to produce the register. The designated representative's name and contact details must be recorded in the register.

Hong Kong Significant Controllers Register Requirements

The requirements for maintaining the Significant Controllers Register are set out in the Companies Ordinance (Cap. 622). The register must contain the following information for each significant controller: full name, correspondence address, identity document number (e.g., Hong Kong identity card or passport number), the date on which the person became a significant controller, and the nature of the control (e.g., holding more than 25% of shares or voting rights, or exercising significant influence). The register must be kept at the company's registered office or at another prescribed place in Hong Kong. If the register is kept at a place other than the registered office, the company must notify the Companies Registry using Form NR2. The register is not open to public inspection, but law enforcement officers have the right to inspect it. The company must update the register within seven days of becoming aware of any change in the particulars of a significant controller.

Practical Steps for Initial Setup and Annual Review

To comply with the SCR requirements, a company should take the following practical steps:

1. Identify significant controllers: Review the company's shareholding structure, voting rights, and any arrangements that give a person significant influence or control. Send notices to all members and any other persons who may be significant controllers, requesting them to confirm their status.

2. Record particulars: Enter the required information for each significant controller in the register. Ensure that the register is kept at the registered office or another prescribed place in Hong Kong.

3. Appoint a designated representative: Designate a person to assist law enforcement with access to the register. Record the designated representative's name and contact details in the register.

4. Annual review: At least once every financial year, review the register to ensure that it is accurate and up to date. If any changes have occurred, update the register within seven days. The company should also send annual reminders to significant controllers to confirm their details.

5. Maintain records: Keep the register for at least seven years after the date on which the person ceases to be a significant controller. The register must be available for inspection by law enforcement officers during business hours.

Compliance and Enforcement

The Companies Registry enforces the SCR requirements. Failure to maintain the register, to keep it at the registered office or prescribed place, or to appoint a designated representative is an offence. The company and every responsible officer (including directors and the company secretary) may be liable to a fine. The register is not open to public inspection, but law enforcement officers, including officers of the Companies Registry and the Hong Kong Police, have the right to inspect it. The designated representative must produce the register for inspection within a reasonable time. The SCR requirement is part of Hong Kong's anti-money laundering framework under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615), and compliance is essential for maintaining corporate transparency.