Vancouver, October 28, 2019 - The government of British Columbia says it is taking the next step in its fight against money laundering and tax evasion.
The province will now require all private BC businesses to keep detailed records of beneficial owners, a move that aims to crush the ability of those who use anonymous shell companies to hide their assets.
Currently, businesses operating in the province can hide their ownership behind numbered companies and trusts located both domestically and offshore. This hurts communities throughout the province that are dealing with the consequences of criminal activity and high home prices.
B.C.’s Expert Panel on Money Laundering in Real Estate report identified disclosure of beneficial ownership as the “single most important measure that can be taken to combat money laundering,” with an estimated $5 billion laundered through the real estate industry in 2018.
The new requirement will come into effect on May 1, 2020, through amendments to the Business Corporations Act. Business records will need to show details of individuals who have direct or indirect control of the company or its shares. Information collected includes full legal name, date of birth, citizenship and last known address.
The province says this will end hidden ownership by requiring companies to maintain accurate information on who owns and/or controls the business. Such information can then be shared with law enforcement and other agencies.
Is this a positive for the real estate industry in BC? Only time will tell if these new measures help to curb money laundering, or if the culprits will find another way around the rules.