UBO REGISTRATION in CYPRUS: Here is what you should be aware to be in compliance!
INTRODUCTION:
In a global landscape increasingly focused on transparency and combating financial crimes, Cyprus has taken a significant step forward with the launch of its Ultimate Beneficial Owner (UBO) Registry. This registry serves as a pivotal tool in the fight against money laundering, terrorist financing, and other illicit activities by providing crucial insights into the individuals who ultimately control and benefit from companies or any other legal entities operating within the Republic of Cyprus.
WHO IS THE UBO AND WHAT DATA ARE COLLECTED:
In the context of corporate entities, the UBO refers to the individual(s) who ultimately own or control a legal entity. This may include individuals who own more than 25% of the shares or voting rights, or individuals who otherwise exercise control over the management of the company.
The UBO Registration in Cyprus refers to the requirement for companies and other legal entities to disclose information about their UBOs. The UBO Registration in Cyprus is mandated by the Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2018, which aligns with the European Union’s Fourth Anti-Money Laundering Directive (AMLD4).
Under this legislation, entities incorporated in Cyprus are obligated to identify and maintain accurate and up-to-date information about individuals who ultimately own or control them.
Key Information Requirements for UBO Registration in Cyprus:
- Identification Documents of the UBOs: Collection of IDs for Cypriot Nationals and Passports for EU and Third-Country Nationals.
- Proof of Residence Address: By providing a recent Utility Bill of the UBO(s) residence address either within the Republic of Cyprus or abroad.
- Percentage of Share Interest within the Legal Entity: The percentage of shareholding held by each UBO within the specific legal entity shall be disclosed.
- Submission of Information to the Registrar of Companies: Obliged Entities are required to submit the aforementioned UBO information to the UBO Registry through the Republic’s online system within a specified timeframe, as seen below under paragraph D. Failure to comply with these requirements may result in penalties or sanctions.
WHO IS CONCERNED:
In Cyprus, the obligation to comply with the UBO Registration falls primarily on companies and other legal entities registered within the Republic. This includes:
- Companies Limited by Shares: Private or public companies limited by shares incorporated in Cyprus must identify and register their ultimate beneficial owners.
- Partnerships: Limited partnerships (LPs) and general partnerships (GPs) operating in Cyprus are also subject to UBO registration requirements.
- Trusts and Foundations: Trusts and foundations established in Cyprus are required to identify and register their ultimate beneficial owners.
- Other Legal Entities: Any other legal entities registered in Cyprus, such as branches of foreign companies, must comply with UBO Registration obligations.
HOW IT APPLIES:
- Newly incorporated Legal Entities: UBO information should be submitted to the UBO Registry as part of the incorporation process and the latest within 1 (One) month from the Incorporation Date.
- Already Existing Legal Entities: As per the Announcement of the Registrar of Companies dated 31/01/2024, all existing legal entities shall finalize the UBO Registration in Cyprus by the end of March and specifically the 31/03/2024.
NON-COMPLIANCE:
Non-compliance with UBO registration requirements may result in penalties (starting from €1,500-), sanctions, and reputational damage for companies. Therefore, it is essential for entities operating in Cyprus to understand and adhere to these regulations to maintain compliance with the law and uphold the integrity of the financial system.
CONCLUSION:
In conclusion, the UBO Registration in Cyprus represents a crucial step forward in Cyprus’ efforts to combat financial crimes, enhance transparency, and uphold its reputation as a reputable global financial center. By requiring companies to disclose information about their beneficial owners, Cyprus demonstrates its commitment to international standards and its resolve to combat illicit activities effectively.
Our Law Firm stands ready to provide guidance and support in fulfilling your obligation to complete the UBO Registration in Cyprus prior the stipulated deadline, thereby mitigating the risk of potential penalties.