The phased implementation process of the final electronic system solution of the Cypriot Register of Beneficial Owners of companies and other legal entities (the "UBO Register"), which commenced on 14 November 2023, will be completed on 1 April 2024. The shift to the new platform is expected to enhance the efficiency of the UBO Register and to align it further with the transparency obligations stemming from the underlying EU AML Directives and the Cypriot Prevention and Suppression of Money Laundering Activities Law (the "AML Law").

In anticipation of the final implementation, this article aims to serve as a practical guide of the steps that need to be taken to ensure compliance with the relevant regulatory requirements.

I. Which entities are liable to submit information

All:

  • companies incorporated or registered under the Companies Law, Cap. 113;
  • European public limited liability companies (SE); and
  • partnerships,

unless covered by the exemptions below, are liable to disclose beneficial ownership information in the UBO Register.

Companies currently undergoing a liquidation or strike off process, which commenced on, or following, 12 March 2021 (being the date on which the interim system solution of the UBO Register was implemented), are included in the scope of the term "companies" above, and are thus obliged to make the relevant disclosure. Overseas companies which have established a place of business (branch) in Cyprus, are outside the scope of the relevant regulations.

Pursuant to the AML Law and the directives issued by the Registrar of Companies, the following are exempt from the obligation to disclose beneficial ownership information in the UBO Register:

  • companies which are listed on a regulated market that is subject to disclosure requirements under European Union law; and
  • companies which are subject to equivalent international standards that ensure sufficient transparency of proprietary information.

II. What information should be submitted

The information to be disclosed for each individual beneficial owner includes:

  • personal information, such as the name, date of birth, nationality, residential address and identification document details;
  • the nature and extent of the beneficial interest held, directly or indirectly; and
  • the date on which the relevant person became or ceased to be a beneficial owner, or on which the information previously disclosed changed.

In cases where the structure of an entity leads to a trust, a foundation or other similar legal arrangement, information will also need to be submitted:

  • for each settlor, trustee and beneficiary (and, in certain cases, for each protector or other person exercising control) of the trust; and
  • for the founder and/or members of the board and management of the foundation.

III. Who is a beneficial owner

Under the AML law, a "beneficial owner" is any person who ultimately owns more than 25% of a company or legal entity, or otherwise controls the same, whether through ownership, directly or indirectly, of a sufficient percentage of shares, through voting rights or through any other means.

In cases where no individual beneficial owner can be determined, the details of one or more senior management officials need to be declared instead.

IV. Important deadlines

All companies and other legal entities which are liable to disclose their beneficial ownership information in the UBO Register, must do so by 31 March 2024. This obligation applies irrespective of any action previously taken for registering relevant information in the interim system of the UBO Register, which had been implemented from 12 March 2021 onwards.

Companies which are exempted from the above disclosure obligation must nonetheless also take action by 31 March 2024 in order to declare the grounds for their exemption on the system.

Newly incorporated or registered companies or other legal entities must disclose their beneficial ownership information in the UBO Register within 90 days from the date of their incorporation or registration.

Changes to the beneficial ownership information previously disclosed must be notified to the UBO Register within 45 days from the date on which the relevant change became known to the entity involved.

Any discrepancies in the beneficial ownership information identified and flagged to an entity by the Registrar of Companies will need to be addressed and rectified within 30 days from the date of the relevant notification.

V. Annual reporting obligation

An annual reporting obligation will be implemented, with effect as from 1 April 2024. Between 1 October and 31 December of each calendar year, each company and other legal entity liable to disclose its beneficial ownership information in the UBO Register will need to take action to re-confirm the accuracy of the information previously disclosed.

VI. Consequences of non-compliance

With effect as from 1 April 2024, the automatic imposition of fines will commence, as will the possibility of initiation of criminal proceedings against entities and officers who fail to comply with the disclosure obligations relating to the UBO Register. These will amount to an administrative fine of EUR 200 plus a further fine of EUR 100 per day of continuation of the default, up to a maximum amount of EUR 20,000.

It is important to note that any applicable fines will be imposed separately and in full against each entity in default, as well as against each of its officers, unless the latter exercised due diligence to comply with the reporting obligations, and the failure to do so is not due to any act or omission or negligence on their part. Officers to whom this applies are urged to make a relevant declaration in the final system of the UBO Register by 31 March 2024, providing supporting documentation for assessment by the Registrar of Companies.

VII. Access rights

Implementation of the final system solution will not affect access rights to the UBO Register. As a reminder, access to the UBO Register is currently being provided:

  • to competent and supervisory authorities; and
  • to obliged entities, in the context of performing customer due diligence.

The Registrar of Companies suspended access to the UBO Register by the general public with effect as of 23 November 2022, following the Judgement issued by the Court of Justice of the European Union (CJEE) in joined cases C-37/20 and C-601/20 on 22 November 2022.

The above is intended to provide a general guide on the matter and does not constitute legal advice. Our team remains available to advise further on the steps which should be taken for compliance with the above requirements and to provide any relevant assistance required.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.