The submission of data concerning beneficial ownership is due by 12 March 2022 in accordance with the relevant announcement of the Department of Registrar of Companies and Intellectual Property.
LEGAL BACKGROUND
In early 2021, the Cyprus government transposed the 5th EU Anti-Money Laundering (AML) Directive into Cyprus legislation, amending the Law for the Prevention and Suppression of Money Laundering Activities.
Consequently, all companies and other legal entities that are incorporated or registered in the Republic of Cyprus are now obliged to identify and record onto the Beneficial Ownership (BO) Register all relevant information about their beneficial ownership.
DEFINITION OF BENEFICIAL OWNER
In accordance with the law, a beneficial owner is defined as any natural person(s) who ultimately owns or controls the Obliged Entity and/or the natural person(s) on whose behalf a transaction or activity is being conducted and includes at least:
a. for corporate entities: the natural person(s) who ultimately owns or controls a legal entity through direct or indirect ownership of a sufficient percentage of the shares or voting rights or ownership interest in that entity, including through bearer shareholdings, or through control via other means. A shareholding of 25% plus one share or an ownership interest of more than 25% in the customer held by a natural person shall be an indication of direct ownership.
b. for trusts: the settlor; the trustee(s); the protector, if any; the beneficiaries, or where the individuals benefitting 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 and any other natural person exercising ultimate control over the trust by means of direct or indirect ownership or by other means.
c. for legal entities such as foundations and legal arrangements similar to trusts: the natural person(s) holding equivalent or similar positions to those referred to in point (b) above.
OBLIGED ENTITIES
Entities considered as ‘obliged entities’ are the following:
• Companies incorporated or registered under the Companies Law Cap. 113
• European Public Limited Liability Companies Based on a legal opinion recently obtained from the Attorney General’s Office, partnerships are considered to be legal entities and as such they must disclose BO details in the register. This will be implemented with system amendment for which a relevant announcement will be published by the Registrar of Companies in due course.
The Directive does not apply to the following entities:
• Companies listed on a regulated market that is subject to disclosure requirements consistent with EU 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 (12 March 2021)
• Companies whose liquidation has been enacted before the commencement of the Directive (12 March 2021)
• Overseas companies (branches).
All entities whose strike off or liquidation has been enacted after 12 March 2021 are obliged to record the details of their beneficial owners in the BO Register.
The law also provides for the creation of a BO Register for trusts. The information to be entered in the register shall include the identity of the settlor, the trustee, the protector, the beneficiaries and any other natural person exercising effective control over the trust. The information will not be accessible to the public, but it can be accessed only by competent regulators or supervising authorities. This register shall be maintained by the Cyprus Securities and Exchange Commission (CySEC); however, no official guidance has been issued yet.
Full version of this article is available at www.cy.andersen.com
