Background
Over the past few years, the European Parliament has succeeded to introduce significant changes and upgrades in the Forth AML Directive (hereinafter referred to as the “Directive”) which, under the decision of the Council of Ministers has now been transported into a national law.
Under the said decision, the Cyprus Authorities shall establish and maintain a central register of ultimate beneficial owners for all Cyprus companies and other legal entities.
The beneficial ownership registrar
The competent authority for the maintenance of the central register of ultimate beneficial owners of companies and other legal entities is the Department of Registrar of Companies and Official Receiver (hereinafter referred to as the “Registrar”). The Registrar shall be responsible to collect the relevant information of the beneficial owners as well as to store and further handle the said Register.
The collection of the information is to commence on the 22th of February 2021 and a grace period of six months will be given to companies and other legal entities for submitting the necessary information into the system.
It is noted that the platform developed (which is a temporary system) shall be managed by the Registrar and shall only be accessible by competent authorities and only upon submission of a formal request to the Registrar.
The platform shall not be accessible by any other party and under no circumstances shall be considered as a public register.
who is considered to be a beneficial owner?
According to the Directive, a beneficial owner is considered to be any natural person(s) who ultimately owns or controls the customer and/or the natural person(s) on whose behalf a transaction or activity is being conducted and includes at least:
a. in the case of 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. A shareholding of 25 % plus one share or an ownership interest of more than 25 % shall be an indication of direct ownership. A shareholding of 25 % plus one share or an ownership interest of more than 25 % held by a corporate entity or multiple corporate entities, which are under the control of a natural shall be an indication of indirect ownership.
- if, after having exhausted all possible means and provided there are no grounds for suspicion, no person under point (i) is identified, or if there is any doubt that the person(s) identified are the beneficial owner(s), the natural person(s) who hold the position of senior managing officials, the obliged entities shall keep records of the actions taken in order to identify the beneficial ownership.
b. In case of trusts:
- the settlor;
- the trustee(s);
- the protector, if any; (iv) the beneficiaries, or where the individuals benefiting 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;
- any other natural person exercising ultimate control over the trust.
c. in the case of legal entities such as foundations, and legal arrangements similar to trusts, the natural person(s) holding equivalent or similar positions.
It is expected that the Registrar shall soon release more details regarding the data collected, the method of submission and any other administrative informatio
how we can help
ConnectedSky Legal & Corporate Consultants Limited, through its dedicated team of business consultants, lawyers, accountants and tax experts will be happy to advise any client as to the obligations deriving from the launching of the Beneficial Owner Register and/or to undertake the relevant submission at the Registrar.
