The Registrar of Companies and Intellectual Property Department has recently conducted an information campaign. The campaign was inviting all legal entities in the Registrar of Companies, to disclose their UBOs in the UBOs Register. The deadline to complete this procedure is the 12 March 2022. At CX Financia we get lot of enquiries in relation to the UBO Register, so we are providing the main provisions of the submission requirement.
The Register is an important tool introduced by the recent AML legislations. It aims at transparency and the prevention and control of the use of companies for money laundering and terrorist financing. Please refer to our previous articles in relation to the Register
In the case where there is a failure to comply with the reporting obligations there is a penalty of
- Two hundred euros (€ 200) and a further financial penalty of one hundred euros (€ 100) for each day of continuation of the violation
- With a maximum charge of twenty thousand euros (€ 20,000).
Obligations of Obliged Entities
Obliged Entities must identify and record electronically on the UBO Register, all relevant information of the ultimate beneficial owner/s who own or control them. This is also applicable to companies that provide administrative (including nominee shareholder) services to their clients. Obliged Entities need to always keep the UBO Register updated. The responsibility for the submission of information lies with the legal entity and its officers.
The process of submitting the data of real beneficiaries to the Register is either by creating a profile of the company itself at the government portal “Ariadni” and providing identification documents with a physical presence at the KEP, KEPO and Company Registrar or at its District Offices Ministry of Energy, or through the profile of the natural person in “Ariadne”, for the company / cooperative in which he / she is responsible.
What do we mean by UBOs?
- Any natural person who actually owns or actually controls a legal entity, or
- The natural person on whose behalf a legal entity transacts or operates.
As far as legal entities are concerned, their UBOs are:
- The natural person who has the final ownership or final control of the legal person, directly or indirectly in a sufficient percentage of the shares or voting rights or the ownership of that legal person, inter alia, through shares in the bearer or through control with instruments other than a listed company in a regulated market.
- An indication of direct ownership constitutes a 25% participation plus a 1 share or ownership of more than 25% to the customer held by a natural person, and (b) an indication of indirect ownership constitutes a 25% participation plus a 1 share or ownership of more than 25 % to the customer held by a legal entity, which is under the control of a natural person or persons or by several legal entities which are under the control of the same natural person or persons.
- The natural person who holds the position of senior manager in case there is a doubt that the person identified is the real beneficiary.
Information to be filed
For UBOs of Companies
- Name, surname, date of birth, nationality and residential address;
- Nature and extent of the beneficial interest held directly or indirectly by each beneficial owner, including through percentage of shares, voting rights, or the nature and extent of the significant influence or control with other means exercised by each controlling person;
- Identification document number indicating the type of document and the country of document issuance (Identity card or passport);
- Date on which the natural person was entered in the register as an ultimate beneficial owner;
- Date on there were changes in the particulars of the natural person or the date on which the natural person ceased to be an ultimate beneficial owner
For Trusts as UBO (with the Registrar of Companies)
In cases where the shareholding structure of a Cyprus company, leads to trust/s, other similar legal arrangements or listed companies as an ultimate beneficial owner(s), the information to be submitted in the UBO Register is the following:
- Name of the trust;
- Registration number (if any);
- Nature and extent of the beneficial interest;
- Country of Jurisdiction of the trust.
Kindly note that for the UBOs of Trusts, the responsible Authority for the administration of their Register, is the Cyprus Securities and Exchange Commission (the “CySEC“). Find more info below.
In cases where the shareholding structure of a Cyprus company, leads to foundations or other similar legal arrangements as an ultimate beneficial owner(s), the information that you need to submit in the UBO Register is the following:
- Name of the foundation;
- Registration number (if any);
- Nature and extent of the beneficial interest;
- Business address;
- Country of Jurisdiction of the foundation.
The notification of true beneficiaries in the Register relates both for:
- natural persons holding administrative shares (management shares) and
- natural persons holding investment shares (investor shares)
Where the Investment Fund is an “umbrella type” fund with more than one investment division, the definition of beneficial owner applies to the legal entity registered in the company register, at umbrella level. Please note that the “Umbrella type” Investment Fund constitutes a single legal entity.
To determine the beneficiaries who hold more than 25% of the value of the shares of an Investment Fund, you should take into account the last official calculation of the Net Asset Value (NAV).
In the event that you:
- cannot identify the actual beneficiary or
- if there is a doubt that the person you have identified is the actual beneficiary,
the person or persons holding the position of the senior executive are the actual beneficiaries in the Register.
In the case of externally managed Investment Funds, after all possible means have been exhausted and provided that there are no reasonable suspicions, no person has been identified as the actual beneficiary or if there is a doubt that the person identified is the actual beneficiary, the natural person to be declared as The Real Beneficiary in the Register is the General Manager of the External Administrator.
If you have any enquiries for the information to be filed in relation to funds, contact our advisors at CX Financia at [email protected]
CySEC Register for Trusts
On 18 June 2021, CySEC published its directive, with immediate effect, for the prevention and suppression of money laundering and terrorist financing in regards to the register of beneficial owners of express trusts and similar legal arrangements (the ” Trust Register“), which provides information and guidance in relation to the registration of express trusts and similar legal arrangements in the Trust Register.
CySEC shall keep the Trust Register and individuals must register any express trust or similar legal arrangement therein provided that:
(a) its trustee is located or residing in the Republic of Cyprus, or,
(b) its trustee, which is located or residing outside the EU, establishes a business relationship or acquires immovable property on behalf of the express trust in the Republic of Cyprus.
If you have any enquiries for the information to be filed in relation to trusts, contact our advisors at CX Financia at [email protected]
Access to the Trust Register
CySEC can provide access of the Trust Register to the following:
- Cyprus Tax Department, the Cyprus Customs Department and the Cyprus Police with no restrictions;
- Any liable entity, in the context of due diligence and identification measures for their client;
- Any natural or legal person who can demonstrate a legitimate interest. This will be subject to acceptance by the Cyprus Securities and Exchange Commission; and
- Any natural or legal person who has a controlling interest in a company or other legal entity, inter alia, either directly or indirectly, indirect ownership, or through shares in the bearer or through control by other means. This will be subject to acceptance by the CySEC
If access is granted, any natural or legal person will have access to the name, month and year of birth, the country of residence and the nationality of the people involved in the trust and the type and extent of the rights they hold in the trust. The public will not have access unless an official application is lodged with CySec, with justification and supporting documents as to why a 3rd party needs access to the information and have to prove legitimate interest
How can CX Financia help you?
- We can help you with your due diligence and collection of information required for the UBO register. CX Financia can provide consultation services for strengthening your compliance practice. Our team can assist you with:
- organising and collecting the information required by the Registrar;
- maintaining your company’s records in good order through our secretarial services;
- complying with your AML obligations;
- creating effective policies and procedures;
- conducting a compliance audit;
- providing tailored training to your employees, board of directors and compliance officers.
Do not hesitate to contact us at [email protected]