05.03.21
COMMENCEMENT OF THE BENEFICIAL OWNERS REGISTER WITH THE REGISTRAR OF COMPANIES
Procedure to be Followed

INTRODUCTION

On the 12th of March 2021, the Registrar of Companies and Official Receiver (the “Registrar”) pursuant to Article 61A of the Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2021 (the “AML Law”) issued a regulation (Regulatory Administrative Act 112/2021) (the “Directive”), identifying the obligations, methodology and procedure companies and legal bodies will have to follow in order to register their Beneficial Owners with the register it created accordingly.

In addition, it issued a Guidance note, (the “Guidance”), in relation to the way the registration of Beneficial Owners (the “BO”) will be filed with the electronic system assisting in this respect the compliance with the directive and the law.

Meaning of UBO: as per the AML Law a ‘UBO’ means any physical person who ultimately owns or controls a legal entity through direct or indirect shareholding ownership of 25 per cent (25%) plus one share.

COMPANIES AND OTHER LEGAL ENTITIES

As per the Directive, every company and other legal entity along with their officers is obliged to collect and maintain adequate, accurate and current information regarding their real beneficiaries.

Further, the Registrar of Companies shall maintain and publish relevant information regarding beneficial ownership of companies and other legal entities exclusively in electronic form and filling of information on BOs will be performed electronically through an online portal without the submission of paper forms or filing fees.

The Directive applies to:

  1. Companies incorporated or registered under the Cyprus Companies Law, Cap.113; and
  2. European public limited liability companies incorporated or registered under the Cyprus Companies Law, Cap. 113.

However, the following companies do not fall within the scope of the Directive:

  1. Companies listed on a regulated market that are subject to disclosure requirements consistent with Union law;
  2. 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;
  3. Companies whose liquidation has been enacted before the commencement of the Directive; and
  4. Overseas companies subject to equivalent international standards which ensure adequate transparency of ownership information.

 

Information to be filed for the Companies for which the Directive is applicable to them

The information to be submitted in the relevant register for the Bos for the companies liable to comply as above, is the following:

  1. Name, surname, date of birth, nationality and residential address;
  2. 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;
  3. Identification document number indicating the type of document and the country of document issuance (Identity card or passport);
  4. Date on which the natural person was entered in the register as beneficial owner; and
  5. 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 relation to Trusts

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:

  1. Name of the trust;
  2. Registration number (if any);
  3. Country of 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 of the trust and its structure will be filed with the register to be set up and kept by the Cyprus Securities and Exchange Commission which will not be open to the public unless legitimate interest is proved.

Information to be filed in relation to foundations, other similar legal arrangements or listed companies

In the event that the shareholding structure of a Cyprus company liable to file the information as per the Directive, leads to foundation/s, other similar legal arrangements or listed companies as beneficial owner(s), the information that must be submitted with the Registrar is the following:

  1. Name;
  2. Registration number (if any);
  3. Country of jurisdiction;
  4. Business address;
  5. 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;
  6. Date on which the foundation, other similar legal arrangements and listed company was entered in the register as beneficial owner and;
  7. Date on which changes in the particulars of a foundation, other similar legal arrangements and listed company were made or the date on which it ceased to be a beneficial owner for BO register purposes.

 

*Significant influence means the influence or control by a natural person over the company through other means such as agreements with the owners or due to other close relationship and influence.

The options available in the website of the Registrar under the section ‘significant influence or control with other means’ are the following:

  1. Through shareholder’s agreement;
  2. Through the exercise of dominant influence, influence through family links or other types of connection with decision-makers;
  3. Through the holding of negotiable shares or convertible stock;
  4. Through the power to appoint senior management;
  5. Other (Details to be provided accordingly).

 

It is further clarified that in the event that no natural person is identified as the beneficial owner, the details of the senior management official must be submitted declaring also his position in the company i.e., whether it is a director or whether it holds another position.

Timeframes

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 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 the latest.

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.
Each December, i.e., 1st of December until 31st of December of each calendar year, all entities must confirm electronically to the Registrar that theirs BOs and relevant information remain the same.

Access

The following persons shall have access to the information concerning the beneficial owner(s) through the electronic BO register:

a) 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;

b) Obliged entities, in the context of conducting due diligence and identification measures for the client as defined in the Law, have fast access with electronic means 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, following payment of three euros and fifty cents (€3,50) fee, per company or other legal entity;

c) All members of general public have access with electronic means ONLY as to the following:

  1. to the name,
  2. month and year of birth,
  3. nationality and country of residence of the beneficial owner,
  4. as well as the nature and extent of the beneficial interest held,

 

There will be a fee for inspection of three euros and fifty cents (€3,50), per company or other legal entity.

It is worth noting that during the six (6) months’ period available to existing entities for the submission of the BOs’ data, unrestricted access to the information concerning the BOs through the electronic BO register is granted only to the Competent Supervisory Authorities, the FIU, the Customs Department, the Tax Department and the Police upon submitting a written request to the Registrar.

Penalties

The responsibility for submitting the necessary information in the register lies with the companies or other legal entities and their officers. As per the Directive, the penalties applicable for failure to comply with the obligation to file information in relation to their BOs are EUR 200,00 (Euro Two Hundred) and a further monetary charge of EUR 100,00 (Euro One Hundred) for each day of non-compliance. The maximum amount payable for non-compliance is EUR 20.000,00 (Euro Twenty Thousand). The officers/officials of the companies or any other legal entities will not be subject to any monetary charge in the event that they had acted with due diligence in complying with the Directive and considering that non-compliance is not due to inaction, omission or negligence. The said penalties are not applicable during the six (6) months’ period available to existing entities for the submission of the BOs’ data.

Procedure

Companies and other legal entities and their officers must register and obtain access through the government gateway portal “ARIADNE” in order to be able to submit information regarding their BOs. It is noted that in order for each company to register the data of the BOs in the system, it must obtain identification codes through “ARIADNE” and then proceed with the authentication of the company’s profile. For companies and other legal entities, the authentication is made only at the following authorised centres (i) Point of Single Contact, (ii) District Post Offices and (iii) Citizens Service Centres where the below listed documents must be presented:

  1. Company Registration Certificate;
  2. An official document from the company that created the profile, authorizing the individual presenting the documents, to submit the documents on behalf of the company. The name and Civil ID of the authorized individual shall be stated in the document and the document shall be signed by the director of the company;
  3. Authorized individual person’s Civil ID;
  4. Profile ID (16-digit number provided by email along with a copy of the said email).

It is clarified that authentication can be made only through physical visit of the authorised individual to the above-mentioned authorised centres and it cannot be performed electronically. To this end and as per point 2 above, each company is required to authorise an individual who will visit personally the designated places and proceed with the authentication of the codes on behalf of the company.

Once the authentication is completed, the BO data will be possible to be registered in the system.

 

DISCLAIMER
This publication has been prepared as a general guide and for information purposes only. It is not a substitution for professional advice. One must not rely on it without receiving independent advice based on the particular facts of his/her own case.  No responsibility can be accepted by the authors or the publishers for any loss occasioned by acting or refraining from acting on the basis of this publication.

 

March 2021

 

Authors

 

Maria Pavlou
Associate Lawyer - Corporate Department
Maria.Pavlou@kinanis.com
CorporateLegal1@kinanis.com

 

Androniki Onisiforou
Associate Lawyer – Corporate Department
Androniki.Onisiforou@kinanis.com
CorporateLegal1@kinanis.com

 

OUR FIRM

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