With reference to our article, we would like to inform you that the Registrar of Companies (RoC) has announced on 12 March 2021 that the electronic service for registration of beneficial owner details for companies and other legal entities is now available as from 16 March 2021.
Ultimate Beneficial Owner – definition
According to the Law an ultimate beneficial owner (UBO) is defined as any natural person who ultimately owns or controls the customer and/or the natural person on whose behalf a transaction or activity is being conducted and includes at least in the case of:
- Corporate entities:
The natural person 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 in that entity.
An indication of direct shareholding is 25% plus one share or an ownership interest of more than 25% in the customer held by a natural person. A shareholding of 25 % plus one share or an ownership interest of more than 25% in the customer held by a corporate entity, which is under the control of a natural person, or by multiple corporate entity, which is under the control of the same natural person(s), shall be an indication of indirect ownership.
If, after having exhausted all possible means no other person is identified or if there is doubt that the person identified is the beneficial owner, the natural person who holds the position of senior managing official.
Please note that in cases where the shareholding structure of a company leads to another legal entity (except Trust/s, Foundation/s, other similar legal arrangements or listed companies) the UBO is a natural person who owns the entity according to the above rules.
- Trusts:
The settlor, the trustee, the protector (if any) the beneficiary or class of persons in whose main interest the legal arrangement or entity is set up or operates, and any other natural person exercising ultimate control over the trust by means of direct or indirect ownership or by other means.
- Legal entities such as foundations, and legal arrangements similar to trusts:
The natural person holding equivalent or similar positions to the person referred to in the case of trusts (2.).
Data to be reported
The information to be filed in the UBO register for individual person beneficial owner is the following:
- Name, surname, date of birth, nationality and residential address;
- Nature and extent of the beneficial interest held directly or indirectly by each UBO, 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;
- ID details for Cypriot national and passport details for foreigners;
- Date on which the person was entered in the register as UBO;
- Date on there were changes in the particulars of the person or the date on which the person ceased to be a beneficial owner.
In cases where the shareholding structure of a company leads to Trust/s, Foundation/s, other similar legal arrangements or listed companies as beneficial owner(s),the information to be submitted in the register is the following:
- Name;
- Registration number (if any);
- Country of Jurisdiction;
- Business address (not applicable to trust);
- 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;
- Date on which the entity was entered in the register as beneficial owner;
- Date on which there were changes in the particulars of the entity or the date on which it ceased to be a beneficial owner for UBO register purposes.
Deadlines imposed
As per an earlier announcement made by the RoC on 19 February 2021, companies and other legal entities could start submitting their beneficial owner’s details into the Intermediate System Solution from 16 March 2021. For all companies and other legal entities incorporated before 12 March 2021 will be granted a period of twelve (12) months to submit their beneficial owners’ details into the system. Therefore, the reporting deadline is on 12 March 2022.
Entities that are registered after 12 March 2021 inclusive (new entities) must submit all required information with respect to each of their beneficial owners to the UBO Registry no later than thirty (30) days after the incorporation date.
The responsibility for the true and correct submission of the information on the beneficial owner(s) rests with the company or other legal entity itself and its officers. In the event of a change in the details of a beneficial owner, the company or other legal entity and its officers must submit to the UBO Register the details of the new beneficial owner or any change in the details of an existing beneficial owner within fourteen (14) days from the date on which they became aware of such change. The 14 days rule applies also for other changes to be filled at the Registrar of Companies. We informed about it in details in one of our articles.
Exceptions
The regulation does not apply to the following companies:
- Company listed on a regulated market that is subject to disclosure requirements consistent with Union law;
- 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 regulation;
- Companies whose liquidation has been enacted before the commencement of the regulation;
- Overseas companies.
Liabilities
The responsibility for the submission of information lies with the company and its directors. It is highlighted that fines and penalties may be imposed to companies and their directors that do not comply with their obligation to submit their UBO data. However, details about penalties will be provided soon. Government has proposed a penalty of 20.000 EUR for non-compliance.
Submission step-by-step
- Company creates a unique e-mail address only for government gateway portal purposes.
- With this e-mail address only, the company signs up in the portal to obtain company identification number.
- Book an appointment at one of KEP offices (Citizen Service Centres).
- Visit one of KEP offices (Citizen Service Centres) to do the verification and provide the relevant documents (company identification number, Certificate of Incorporation and Certificate of Directors and Secretary, ID or passport of the director / the secretary / authorised person and the authorisation letter, if applicable).
- After successful verification at the KEP office, UBO details can be submitted through the government portal.
- The UBO will receive the e-mail stating that all the details have been reported successfully. The management of each company is obliged to submit the details of the UBOs in their own discretion.
We will create an e-mail structure for all companies managed by IBCCS.TAX, about which we will inform our clients directly.
Access to the UBO Register
The UBO register will be publicly accessible in accordance with the 5th AML EU Directive. It must be stressed that for the interim solution, unrestricted access to information will be provided only to Competent Supervisory Authorities, the FIU, the Customs Department, the Tax Department and the Police, upon written letter to the Registrar. Upon the implementation of the new system which will be in place beginning of 2022, access will be provided in accordance with the EU Directive also to obliged entities. There is no indication that the registry will be open to more persons or entities. However, this may alter.
It is noted that for trusts and other similar legal arrangements, the register will be kept with the Cyprus Securities and Exchange Commission, (CySEC) and the information will not be open to the public UNLESS the interested person can show legitimate interest.
