Updating the Register of Beneficial Owners in Cyprus

Updating the Register of Beneficial Owners in Cyprus

Definition of beneficial owner
Pursuant to Section 2 of the Money Laundering Prevention and Suppression Act 2007-2021, hereinafter referred to as the “Law”, the “beneficial owner” of a legal entity is the natural person who has ultimate ownership or control over the legal entity. Ownership or control may be exercised either directly or indirectly or both through:

• Owning a sufficient percentage of shares.
• Voting right.
• Significant influence or control through other means.

In the event that an individual is not identified as the beneficial owner based on ownership rights, or where there is doubt that an identified individual is the beneficial owner, the details of the senior management officer must be provided.

Direct ownership
Means a block of shares in the amount of 25% plus one share or an ownership interest of more than 25% in the authorized capital of a company owned by an individual.

Indirect ownership
Means a block of shares in the amount of 25% plus one share or an ownership interest of more than 25% in the authorized capital of the company, which is owned by an individual through a legal entity.

Direct and indirect ownership
Direct ownership (by an individual) and indirect ownership (on behalf of a legal entity) results in the individual owning at least 25% of the ownership interest.

Obligation to provide information to the register
According to the Registrar of Companies Directive, each legal entity (eg company, partnership) and each of its officers/partners are required to provide information about their beneficial owners to the registry.

According to the interpretation of the Companies Act, the officers of a legal person are a director, a manager and a secretary.

Thus, information about the beneficial owner should be submitted to the registry by the entity’s own officer/partner, and not by a person acting on its behalf, unless he/she is an officer/partner in that legal entity.

In particular, these objects include:

• Cypriot companies incorporated or incorporated under the Companies Law.
• European companies.
• Partnerships.
• The following persons are exempt from the obligation to disclose.

Information about the beneficial owner:

1. Foreign companies.
2. Trade names.
3. Company or other legal entity:
4. The company is listed on a regulated market subject to disclosure requirements under European Union law; or
5. Subject to equivalent international standards ensuring adequate transparency of ownership or
6. Those who submitted an application for exclusion before 03/12/21 or whose liquidation began before 03/12/21.

For the purpose of exclusion:

• In case of exclusion, the date of submission of the relevant application to the Department is taken into account.
• In the case of voluntary liquidation, the date of the decision to approve the liquidation of the company is taken into account.
• In case of liquidation by a court decision, the date of filing an application to the court for liquidation.

Please note that this article is for informational purposes only. For further advice, please contact us at the contacts listed on the site.