Ultimate beneficial owners: Foreign companies required to provide details

The Securities and Exchange Commission of Pakistan (SECP) has made it mandatory for foreign companies operating in Pakistan to provide details of their ultimate beneficial owners. The SECP has issued SRO 81 (I)/2020 here on Thursday to issue draft amendments to Foreign Companies Regulations, 2018. The purpose of the revised regulations is to seek details of the ultimate beneficial owners of the foreign companies under the SECP regulations.

According to the revised regulations for foreign companies, the particulars of each corporate body, which is member/director/secretary of the foreign company would now also include details of the ultimate beneficial owners in case a member is the corporate body.

The companies would provide information about the direct shareholding, control or interest, if ultimate beneficial owner himself has shares, control or interest in the member of the foreign company or indirect shareholding or control (through legal persons or legal arrangements in the chain of ownership, whether in Pakistan or abroad).

In case of indirect shareholding or control, particulars of all the legal persons or legal arrangements through whom shareholding or control exercised, whether in Pakistan or abroad, would be provided to the SECP. The particulars included name, company /LLP /partnership firm /trust/ any other body corporate, date of incorporation/ registration, name of registration authority, business address and country and email address.

The SECP added that the ultimate beneficial owner means a natural person who ultimately owns or controls a foreign company and includes the person who exercise ultimate effective control through a chain of ownership or by means of control other than direct control of not less than 25 percent of shares, voting rights or controlling interest in the foreign company.