Ultimate Beneficial Owners Register
As of the 16th of March 2021, according to both the European Union and the Cyprus Law, all companies which are duly incorporated under the laws of Cyprus, are obliged to keep a register of their beneficial ownership and companies which might not comply with the said obligation may face fines and/or penalties.
The European Union Law
On May 2015, according to the issued EU Directive 2015/849 (the “4th Anti-Money Laundering Directive”), EU Member States were required to keep a central register of the beneficial or true owners of companies within their respective jurisdictions.
In 2018, according to the issued EU Directive 2018/843 (the “5th Anti-Money Laundering Directive”) which amended the 4th Anti-Money Laundering Directive, the EU Member States were required to launch publicly accessible registers of beneficial ownership of companies.
The 5th Anti-Money Launder Directive was transposed into Cyprus Legislation through the Prevention and Suppression of Money Laundering Activities Laws of 2017-2021 (the “Law”) on the 23rd of February 2021.
According to the Law, companies incorporated in the Republic of Cyprus must obtain and hold adequate, accurate and current information on their beneficial ownership, including details of the beneficial interests held.
The Law provides the establishment of a central beneficial owner register of the companies, trusts, foundations and other such legal entities (the “Legal Entities”). The beneficial owner register is a centralized register that contains information about the beneficial owners of companies that fall under the Law.
Obligations of Cyprus Legal Entities under the Law as of the 16th of March 2021.
1. The Beneficial Owner Register:
Legal Entities are obliged to identify and record electronically in the beneficial owner register all relevant information of the beneficial owner(s) who own or control the Legal Entity – at least 25% of shares ownership.
In case where no natural person is identified as the beneficial owner of the Legal Entity based on the ownership rights or when there is doubt as to the person to be identified as the beneficial owner, the details of the senior management official or of the controlling person of the Legal Entity shall be submitted instead.
The Legal Entities are also obliged to always keep the beneficial owners register updated.
2. Timing of filings:
- A period of 6 months, starting from the 16th of March 2021, will be given to all existing entities to submit their beneficial owners’ data into the system (the “Interim solution period”).
- In case of a change in the information of a beneficial owner, the company and its officers must, within fourteen (14) days from the change, file into the beneficial register the information regarding the new beneficial owner or the change on the details of an existing beneficial owner.
- Companies registered following the 16th of March (new entities), must, no later than thirty (30) days from the date of their registration, file electronically to the beneficial owners register, all information in respect of each of their beneficial owner.
3. Penalties (not applicable during the Interim solution period)
The responsibility for the true and accurate submission of the beneficial owner(s) information, lies with the Legal Entity itself and any of its officers.
Potential fines and penalties may be imposed to Legal Entities and their officers that do not comply with the Cyprus Registrar of Companies’ Directives and the provisions of the Law regarding the recording of all requested beneficial owner(s) data to the beneficial owners register.
*During the Interim solution period no penalties will be imposed*
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