Nicosia, January 27th, 2021,
On December 16th, 2020, the Council of Ministers of the Republic of Cyprus, in consideration of EU 5th AML Directive 2018/843 and Law 188(I)2007 on Preventing and Combating Money Laundering and Terrorist Financing, has decided to appoint the Registrar of Companies and Official Receiver for the management of the upcoming UBO Register regarding the beneficial owners of Cyprus legal entities and the collection of all necessary and related information for this matter.
According to Section 61(a) of the Law (Law 188(i)/2007) as amended, the purpose of the UBO Register is to provide transparency and a stable and updated database to the corporate industry, implying the obligation for every company, or any other legal entity incorporated in Cyprus, to maintain adequate information on its beneficial owner.
The Registrar of Companies has informed that the data collections on UBOs for companies will begin starting from the 22.02.2021 until the 19.07.2021.
The Law does not provide an exhaustive list of information that must be transferred to the UBO Register. It is understood that Law Firms/companies should provide adequate, accurate and current information on the beneficial ownership of the company.
The Law defines a UBO as a natural person who has ultimate control or ultimate ownership in a company, with the UBO being:
- a natural person who ultimately controls or controls a legal entity through a direct or indirect ownership of a shareholding of 25 per cent plus one share: or
- an ownership interest of more than 25 per cent in a company.
As a first step, a Central Register is to be created to hold the data and be accessible by the relevant authorities including the Cyprus Bar Association, the Cyprus Securities and Exchange Commission (CySec), the Central Bank as well as the department and the Unit for Combatting Money Laundering and Terrorist Financing (MOKAS).
As second step, the information collected will be then transferred to the final platform in the second half of 2021 (second stage) and access to it will be granted to any person or organisation who can provide legitimate interest with evidence.
With regards to Trusts and as per Section 61(b) of the Law, a separate Trust Registry is to be created under stricter conditions, with the obligation to disclose the settlor, the trustee, the protector, the beneficiaries, and any other person exercising effective control over the trust, with legitimate interest as a condition to data access.