Significant Controller Register

Key Takeaways: 

• The Significant Controllers Register (SCR) is a mandatory internal record indicating the individuals or legal entities that have ultimate control over the organization.
• A Significant Controller is an individual or entity with major control through shares, voting rights, or influence.
• The Significant Controllers Register is not publicly filed but must be prepared at incorporation and kept at the registered office.

Introduced by Companies (Amendment) Ordinance in 2018, the Significant Controllers Register (SCR) was implemented to improve corporate transparency in Hong Kong. It requires companies to document and maintain accurate records of those who hold ultimate control or beneficial ownership. While the register is not available to the public, local authorities can access it upon request.

What is a Significant Controllers Register?

The Significant Controllers Register (SCR) is a mandatory internal record required for all private companies incorporated in Hong Kong. Businesses must maintain an accurate and up-to-date list of the individuals or legal entities that have ultimate control over the organization.

By ensuring beneficial ownership transparency, the SCR prevents the misuse of corporate structures for:

• Terrorist financing activities.
• Tax evasion and illicit financial flows.
• Money laundering through anonymous shell companies.

Who is a significant controller of a company?

A Significant Controller is defined as either:

• A Registrable Person: An individual who has significant control over the company.
• A Registrable Legal Entity: A corporate shareholder that holds significant control over the company.

The Five Criteria for Significant Control

1. A person or entity is considered a “Significant Controller” if they meet one or more of the following five conditions:
2. Trust/Firm Control: Has the right to exercise, or actually exercises, significant influence or control over the activities of a trust or a firm (that is not a legal person), where the trustees or members satisfy any of the first four conditions listed above.
3. Share Ownership: Holds, directly or indirectly, more than 25% of the company’s issued shares. (If the company has no share capital, this applies to those with a right to more than 25% of the capital or profits).
4. Voting Rights: Holds, directly or indirectly, more than 25% of the company’s voting rights.
5. Board Appointment: Holds, directly or indirectly, the right to appoint or remove a majority of the board of directors.

What steps must a company take to identify Significant Controllers?

A company is legally required to take “reasonable steps” to identify its controllers. This process typically involves:

• Internal Review: Auditing the Register of Members, Articles of Association, and any existing Shareholders’ Agreements.
• Issuing Statutory Notices: Sending formal notifications to any party believed to be a significant controller.

What happens if a controller fails to respond? If a party fails to reply within one month of receiving a notice, the company must add a specific note to the SCR. This note must state that a notice was issued but the significant controller failed to comply within the one-month period. In cases of persistent non-compliance, the company should consider reporting the matter to the Companies Registry.

Do I need to file the SCR with the Companies Registry?

No. The Significant Controllers Register is an internal document and does not need to be delivered to the Companies Registry for public filing.

However, there are strict rules regarding its location:

• Timing: The register must be prepared immediately after Hong Kong company registration.
• Storage: It is typically kept at the company’s registered office address in Hong Kong.
• Notification (Form NR2): If the register is kept at a location other than the registered office, you must notify the Registrar using Form NR2 within 15 days of moving the document.

The Role of the Designated Representative

Every Hong Kong company must appoint a Designated Representative to be listed in the SCR. This individual or entity acts as the primary liaison for law enforcement officers.

To qualify, the representative must be a Hong Kong resident or a professional (such as an accounting firm or legal professional) holding a Trust or Company Service Provider (TCSP) License such as Get Started HK. If you use our company secretary service, we will automatically act as your designated representative, manage your Significant Controllers Register in full compliance with the law, and ensure it is always ready for inspection. Should you require assistance in preparing this Register, please contact our Hong Kong company formation team at info@getstarted.hk.

Frequently Asked Questions