The Cyprus AML Law has been amended on 18 February 2021 in order to introduce into local law the provisions of the 5th AML Directive 2018/843.
The Law provides for the establishment of the following registers as to ultimate beneficial owners:
- The Central Registry of real Beneficiaries of Companies and other legal entities (BO Register);
- The Central Registry of real Beneficiaries of legal bodies (“Legal Bodies Register”); and
- The Register of Express Trusts and similar legal arrangements (“Trusts Register”)
*Legal Bodies refer to bodies not registered with the Registrar of Companies which include clubs, federations, unions, and charitable foundations.
The BO Register will be kept by Registrar of Companies. the Legal Bodies Register will be kept by the General Commissioner (who is also the general director of the Ministry of Interior) and the Trusts Register will be kept by Cyprus Securities and Exchange Commission (CySEC).
On 12 March 2021, the Registrar of Companies issued Directive Κ.Δ.Π. 122/2021 and a Practical Guidance Manual on which the Companies Central BO Register launched on 16th March 2021 is based on. CySEC has not issued any official announcement yet.
WHAT INFORMATION SHALL BE INSERTED IN THE REGISTER?
Every company and its officers (including directors and secretary) must obtain and keep at the registered office adequate and current information about their BO’s. As per the AML Law, a “UBO” means any physical person who ultimately owns or controls a legal entity through direct or indirect shareholding ownership of 25% plus one share.
Every company and its officers must submit electronically the following information to the Companies BO Register:
IF THE BO IS A NATURAL PERSON:
- Date of birth
- Residential address
- Identity Card or Passport
- Nature and extent of the beneficial interest held directly or indirectly by each beneficial owner, including through percentages of shares, voting rights, or the nature and extent of the significant influence or control with other means exercised by each controlling person.
IF THE STRUCTURE LEADS TO A TRUST, FOUNDATION OR LISTED COMPANY:
- Name of Trust/ Foundation/ Listed Company
- Registration Number (if any)
- Country of jurisdiction and business address (not applicable for Trust)
- Nature and extent of the beneficial interest held directly or indirectly by the Trust, Foundation or Listed Company.
WHERE NO BO IS IDENTIFIED:
In case where no natural person is identified as the beneficial owner based on the ownership rights or when there is doubt that the person identified is the beneficial owner, the details of the senior management official must be submitted, indicating whether the person is a director of the company or whether it holds another position, by declaring that position. In this case, the nature and extent of the beneficial interest is not submitted.
WHEN TO REGISTER?
Every company and its officers must submit electronically the above information to the Companies Central BO Register until 12 March 2022.
For companies incorporated on or after the 12th of March 2021 filing of the above information to the Companies BO Register must be completed within 30 days from incorporation.
Companies and their officers must file any changes of their BO to the Companies BO Register within 14 days from the date of change.
Companies and their officers must confirm annually (during the period of 1st December to 31st December of each year) to the Registrar of Companies the information registered for their BOs.
WHAT ARE THE PENALTIES FOR NON-COMPLIANCE?
Non-compliance with the above obligations would give rise to criminal liability and administrative fines making the company and its officers liable to pay 200 EUR as first penalty, and 100 EUR for each passing day of non-compliance. The cap of this penalty will be 20,000 EUR.
An officer shall not be subject to an administrative fine if he/she has applied due diligence on the BO for compliance purposes and the breach has not been caused by his/her omission or inaction.
No penalties will be imposed during the first 12 months form the opening of the BO register.
WHO WILL HAVE ACCESS TO THE COMPANIES CENTRAL BO REGISTER?
The following bodies shall have immediate access to the information held at the Companies BO Register by submitting a written request to the Registrar of Companies:
- Competent Supervisory Authorities (e.g. ICPAC and Cyprus Bar Association).
- The FIU.
- The Customs Department.
- The Tax Department.
- The Police.
After 12 March 2022, obliged entities e.g. banks and service providers as well as the public will have access to certain information kept at the registry as follows:
- Name of the UBO
- Month and year of birth
- Country of residence, and
- The nature and extent of the interest held.
A BO may file a written request (duly accompanied by supportive evidence) to the Registrar of Companies seeking restriction to access of his/her information by obliged entities or the public on the basis that such access would expose him/her to disproportionate risk of fraud, kidnapping, blackmail, extortion, harassment, violence, or intimidation or where the BO is a minor or otherwise legally incapable.
WHICH COMPANIES ARE EXEMPTED FOR THE REGISTRY?
The obligation to file BO information to the Companies Central BO Register does not apply to:
- Companies listed on a regulated market which are subject to disclosure requirements consistent with EU Law.
- Companies which are subject to equivalent international standards which ensure adequate transparency of beneficial ownership information.
- Companies for which a strike off application has been filed or liquidation proceeding has commenced before 12th March 2021.
- Overseas companies as described by the guidance issued by the Registrar of Companies.
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We will take you through a step by step process from A to Z in creating the perfect business structure in Cyprus.
Can’t wait any longer? Become even more successful by working with accountants you can count on and be among the thousands business that already did.