In our previous article titled “Register of Ultimate Beneficial Owners in Cyprus – what you should know“, we talked about the UBO register, what changed, who is affected but also about who will have access to the UBO register. Here, you can find the Cyprus Beneficial Owners (UBO) Register Guide and relevant Information for 2021.
On the 12th of March 2021, according to Article 61A of the Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2021 (the “AML Law”), the Registrar of Companies has issued a regulation (Regulatory Administrative Act 112/2021) (the “Directive”), identifying the obligations, methodology and procedure companies and legal bodies that will have to follow in order to register their Beneficial Owners with the register it created accordingly. The beneficial owner register (the ‘BO register’) is a centralised register that contains information about the beneficial owners of Entities that fall under the Law.
With reference to our previous article titled “Register of Ultimate Beneficial Owners in Cyprus – what you should know” the team at CX Financia has created this article to give you some additional information.
Who is considered a Beneficial Owner?
Before proceeding on the actions that need to be taken by the relevant entities, let’s clarify who is considered a Beneficial Owner under this framework.
According to the Law, Beneficial Owner (the “BO”) means any natural person(s) who ultimately owns or controls the entity and/or the natural person(s) on whose behalf a transaction or activity is being conducted. This is further clarified as follows:
Natural persons that own a shareholding or voting rights in the corporation, directly or indirectly through other corporate vehicles or structures, of 25% plus one share.
In the case of trusts, control may differ depending on the structure, and the law defines BOs to be one or more of the following:
• the settlor;
• the trustee(s);
• the protector, if any;
• the beneficiaries, or where the individuals benefiting from the legal arrangement or entity have yet to be determined, the class of persons in whose main interest the legal arrangement or entity is set up or operates;
• any other natural person exercising ultimate control over the trust by means of direct or indirect ownership or by other means;
Are there any exceptions?
We should also mention that the Directive specifies some exceptions, which are:
• Companies listed on a regulated market that are subject to disclosure requirements consistent with Union law;
• Companies whose directors submitted an application for strike off pursuant to Article 327 (2A) (a) of the Companies Law, prior to the commencement of the Directive, namely 12/03/2021;
• Companies whose liquidation has been enacted before the commencement of the Directive; and
• Overseas companies subject to equivalent international standards which ensure adequate transparency of ownership information.
Data to be reported
The information to be submitted in the relevant register for the BOs for the companies liable to comply as above is the following:
• 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);
• The date on which the natural person was entered in the register as beneficial owner; and
• The date on there were changes in the particulars of the natural person or the date on which the natural person ceased to be a beneficial owner.
Trusts, foundations, other similar legal arrangements or listed companies & information to be filed
In accordance with the Guidance published by the Registrar, it is clarified that in the event that the shareholding structure of a Cyprus company liable to file the information as per the Directive, leads to Trusts as beneficial owner(s), the information that must be submitted with the Registrar of Companies is limited to the following:
• Name of the trust;
• Registration number (if any);
• Country of the jurisdiction of the trust.
The information to be submitted to the BO register kept with the Registrar of Companies is limited in the case of trusts as details in relation to the beneficial owner. The register will be kept with the Cyprus Securities and Exchange Commission, (CySEC) and the information will not be open to the public UNLESS the interested person can show a legitimate interest.
What is the Registration Procedure?
The Department of Companies and Official Receiver has issued detailed guidelines regarding the procedure and systems to be used for registering BOs to the register found here. The process is summarized below:
• The company creates a unique e-mail address only for government gateway portal purposes.
• With this e-mail address only, the company signs up in the portal to obtain the company identification number.
• Book an appointment at one of KEP offices (Citizen Service Centres).
• Visit one of KEP offices (Citizen Service Centres) to do the verification and provide the relevant documents (company identification number, Certificate of Incorporation and Certificate of Directors and Secretary, ID or passport of the director / the secretary / authorised person and the authorisation letter, if applicable).
• After successful verification at the KEP office, UBO details can be submitted through the government portal.
• The UBO will receive the e-mail stating that all the details have been reported successfully. The management of each company is obliged to submit the details of the UBOs at their own discretion.
What are the time-frames for submitting the information?
According to the Directive, entities that were registered or incorporated before the 16th of March 2021, are required to submit electronically with the Registrar of Companies relevant information on BOs within six (6) months (with an extension of another 6 months) from the above date the latest.
Entities that are registered or incorporated after the 16th of March 2021 are required to submit electronically with the Registrar of Companies relevant information on BOs within thirty (30) days from their date of incorporation or registration at the latest.
Each December, i.e., 1st of December until 31st of December of each calendar year, all entities must confirm electronically to the Registrar that their BOs and relevant information remain the same.
What happens in the event of changes?
In the event that a change is made in relation to the BO’s information already filed, the new information must be submitted within at least fourteen (14) days from the date that the entity received notice of such change.
Responsibility for submitting the information and penalties
The responsibility for submitting the necessary information in the register lies with the companies or other legal entities and their officers, as such the framework has set some penalties for enforcement against non-compliant entities.
Details about penalties will be provided soon. The government has proposed a penalty of 20.000 EUR for non-compliance.
Who has access to the information?
Let us now answer the most important question regarding this Directive and this is who can access the BOs details. As a general rule, everyone can access the information following payment of three euros and fifty cents (€3,50) fee per company, however the Directive specifies some access rules as follows:
• Competent Supervisory Authorities, the Financial Intelligence Unit (the “FIU”), the Customs Department, the Tax Department and the Police have fast and unlimited access with electronic means without the submission of a fee and notifying the company or other legal entity;
• Obliged entities, in the context of conducting due diligence and identification measures for the client as defined in the Law, have fast access to the name, month and year of birth, nationality and country of residence of the BO as well as to the nature and extent of the beneficial interest held;
• All other members of the general public have access with electronic means ONLY to the name, month and year of birth, nationality and country of residence of the beneficial owner, as well as the nature and extent of the beneficial interest held.
It is worth noting that during the six (6) months’ period available to existing entities for the submission of the BOs’ data, (b) and (c) above will not have access to any information.
How can CX Financia help you?
Registration to the relevant system which is a prerequisite to the submission of the data (Ariadni Portal).
➢Collection and or submission of all relevant information through the system on your behalf.
➢Support with ongoing compliance requirements to update theUBORegister.
We will create an email structure for all companies managed by our company, for which we will inform our clients directly.
At CX Financia, we provide support to investment firms, execute training sessions within organizations and obtain licenses for our clients. If you have any questions you can contact us at [email protected].
Interested in finding out more about our tailored services? Contact our team.
The information provided in this article is for general information purposes only. You should always seek professional advice suitable to your needs.