Nominee Shareholder Services is an essential aspect of Cyprus’s corporate landscape, providing confidentiality and privacy for businesses in a compliant manner.
In line with Cyprus’s commitment to international transparency and regulatory standards, Nominee Shareholder Services allow companies to maintain privacy without compromising their adherence to the country’s legal framework. This article aims to provide a general overview of Nominee Shareholder Services in Cyprus, focusing on the relevant laws and obligations.
Nominee Shareholder Services in Cyprus are governed primarily by the Companies Law, Cap. 113, which provides the legal foundation for company formation, management, and dissolution. The Companies Law outlines the roles and responsibilities of shareholders, including the duties of Nominee Shareholders, and mandates that every company registered in Cyprus must have at least one shareholder.
Additionally, the Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2007 (as amended), together with the Cyprus Securities and Exchange Commission’s (CySEC) Directive DI144-2007-08, establishes the framework for the proper conduct of corporate service providers, including those offering Nominee Shareholder Services. These regulations ensure that businesses in Cyprus maintain the highest level of transparency and compliance with international anti-money laundering (AML) and combating the financing of terrorism (CFT) standards.
Nominee Shareholders act as a legal representative for the beneficial owners, holding shares in a company on their behalf, and providing a layer of privacy.
A Nominee Shareholder has the same legal obligations and fiduciary duties as other shareholders, including acting in the best interests of the company and maintaining confidentiality.
Nominee Shareholders are responsible for fulfilling the company’s legal requirements, such as participating in general meetings, voting on resolutions, and exercising their rights as shareholders in accordance with the company’s Articles of Association.
A Declaration of Trust is a document signed between an Ultimate Beneficial Owner and a Nominee Shareholder to protect the right of the Beneficial Owner in terms of any dividend and income generated by the shares.
Under a Declaration of Trust, the nominee shares are held by the nominee shareholder on trust for the beneficial owner and the nominee has no beneficial interest in those shares.
Companies utilizing Nominee Shareholder Services in Cyprus must ensure that their Nominee Shareholders comply with all applicable laws and regulations. This includes conducting proper due diligence on the Nominee Shareholder and ensuring that they are a suitable candidate for the role. Additionally, the company must provide the Nominee Shareholder with all necessary information and documentation to fulfil their duties effectively.
Companies using Nominee Shareholder Services must also abide by the provisions of the Prevention and Suppression of Money Laundering and Terrorist Financing Law of 200.
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