September 2019 - Komsec Limited

Central Register of Beneficial Ownership of Companies and Provident Societies – Opening Postponed

The common understanding of Beneficial Ownership is that companies must provide details of any individual with an ultimate shareholding of 25%+1 share in any company registered in Ireland.

Providing a detailed understanding of the intricacies involved or, obtaining the pertinent information required is not easy.

The history in implementing EU Anti-Money Laundering Directives in Ireland is almost as long as the name of the Irish Central Register. Some of the key points relating to Anti-Money Laundering and Beneficial Ownership are noted below.

November 2016 Statutory Instrument No. 560 requiring companies to create and maintain a Register of Beneficial Ownership

July 2018 5^th Anti-Money Laundering Directive entered into force in EU

November 2018 Criminal Justice (Money Laundering and Terrorist Financing) (Amending) Act 2018

March 2019 Statutory Instrument No. 110 requiring companies to file their Beneficial Ownership details with the Central Register

June 2019 Central Register to be open for electronic filings by companies

November 2019 Deadline for all companies to complete their filings on the Central Register

January 2020 Transposition of 5^th Anti-Money Laundering Directive by all Member States

It should have been possible from 22.06.2019 for companies to start electronically filing in the Central Register. Unfortunately, the Central Register have advised that the opening of the Register has been postponed temporarily.

Regardless of whether or not one can file on the Central Register companies must still maintain and update their own internal Register of Beneficial Owners.

Since the New Year KomSec Limited has experienced a sustained level of increased queries from UK based organisations with interests in Ireland, looking for advice on the choices available to them post-Brexit – Branch Registration or Company Incorporation.

Branch Registration – of interest to some as once registered a Branch has fairly basic statutory filings. Also, Branches file the same financial statements as those filed in the country of origin (i.e. country where company registering Branch was incorporated).

Downside for some is an unease at having to appoint an Authorised Person (resident in the State) representing the Branch where he/she can have as much control over the Branch as any Company Director.

Company Incorporation – of interest as once incorporated the company only needs to either have one individual Director resident anywhere within the EEA or a Bond (S.137 Companies Act 2014). Companies can apply for exemption from the residency rule/Bond on the grounds that the company has “a real and continuous link with one or more economic activities being carried on in the State”. This statement must be supported by the Irish Revenue Commissioners stating it has reasonable grounds to believe the company has such a link.

Downside for some is that once set up the company has a life of its own requiring it to make regular annual filings throughout its corporate history, including preparing and filing financial statements specific to the Irish company.

Which option is ultimately selected will most likely be driven by tax advice. To date, KomSec Limited has found client interest split fairly evenly between both types of entities. To explore options available for your specific organisation contact KomSec Limited directly.