The Hong Kong Company Registry to soon better protect privacy?

The Hong Kong Company Registry to soon better protect privacy?

The Hong Kong Company registry is allowing the public, after payment, to access the particulars of directors and shareholders of a Hong Kong Company.

This situation was reflecting a new era of full transparency, incepted by the Paris based OECD team and, less to say, endangering rights to privacy and business confidentiality.

Law enforcement agencies have anyway a full access on the register of significant controllers and the new proposal to restrict access to information is of course challenged by journalists’ associations.

There is no real public interest to access the particulars of directors and shareholders on the company registry Hong Kong but there is without doubt additional risks for the directors and shareholders to, being publicly exposed, be subjected to multiple pressures, criminal or not.

The possible new access restrictions, remaining to be fully recorded, are very good news and could be interpreted as a show of force against FATF rules and OECD recommendations.

Transparency is not inevitable, the evolution of Anti-Money Laundering laws and regulation and more specifically their drastic implementation by Financial Institutions is sufficient. The professionals and law enforcement agencies are better equipped and trained in the pursuit of fighting criminals, there is no need for the journalists to access a passport number and a private address.

Easy tools to protect privacy and business confidentiality for a Hong Kong company:

  1. Local “nominee” director with unique bank signatory power
  2. Seychelles company as corporate shareholder
  3. Declaration of Trust from an individual or a corporate entity
  4. Option agreement etc.

The above are a perfect illustration that a public access on the particulars of directors and shareholders is totally useless for a journalist’s investigation, with the understanding that Financial Institutions and law enforcement agencies have a full access on the Ultimate beneficial Owners particulars.

The timing is well chosen, wealthy individuals are facing extremely dangerous times, because of travel restrictions and forced immobility. Being captive at home with your private address publicly displayed is a source of stress.

Individuals in favor of an era of transparency are not taking into accounts the risks, and the absence of state protection, in most of the countries where exposed individuals are located.

The topic of privacy and business confidentiality is also dividing the world, between a European side avid of social and tax justice and the East which adopt a more pragmatic and realistic approach. The US considering new rules that they will not apply to themselves, as usual, and counting the points.

Raphael

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