Ultimate Beneficial Owners in Cyprus

Yes, Cyprus has legislation in force governing UBOs:

• Identification of UBOs: section 2 of The Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2007 as amended (the Law) provides the legal definition of a UBO and sets out the criteria for their identification;
• Registration of UBOs: sections 61A to 61D of the Law impose obligations for collection and filing accurate and up-to-date information regarding UBOs in the relevant registers maintained by the competent authorities. In addition to the primary legal provisions, more detailed requirements are set out in secondary legislation namely directives issued by the respective competent authorities.
  

«Beneficial owner» is any natural person i.e. individual who ultimately owns or controls the client and/or the natural person on whose behalf a transaction or activity is being conducted and includes at least the following persons: 

in the case of legal entities:

• the individual 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, including through bearer shares, or through control by other means.
• an indication of direct shareholding is a shareholding of 25% plus one share or an ownership interest of more than 25% held by an individual natural; and
• an indication of indirect ownership is a shareholding of 25% plus one share or an ownership interest of more than 25% held by a legal entity, which is under the control of an individual, or by multiple legal entities, which are under the control of the same individual or persons; and
• the control through other means can be verified, inter alia, based on the criteria provided for in the Companies Law.

The individual who holds the position of senior managing officer if, after having exhausted all possible means and provided there are no grounds for suspicion, no individual is identified as the beneficial owner, or if there is any doubt that the person identified is the beneficial owner.

in the case of express trusts and similar legal arrangements:

• the settlor;
• the trustee or commissioner;
• the protector, if any;
• the beneficiary, or where the individual benefiting from the legal arrangement or legal 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 individual exercising ultimate control over the trust by means of direct or indirect ownership or through other means; and

in the case of associations, foundations, federations or unions, charitable foundations and non-governmental organizations with legal personality, the individual holding equivalent or similar positions to the person referred to in the previous paragraph.

Companies listed on a regulated market (in Cyprus, the EU or the EEA, or a third country with equivalent transparency requirements) subject to disclosure requirements consistent with European Union law or subject to equivalent international standards which ensure adequate transparency of ownership information are exempted from filing UBOs. Note, however, that any subsidiaries of listed companies must disclose their UBOs.

Filing of information regarding the UBOs must be submitted to one of the four designated registers depending on which is applicable in the case at hand:

• The Central Register of Beneficial Ownership of Companies and Other Entities applies to companies and partnerships (maintained by the Registrar of Companies).
• The Central Register of Beneficial Owners of Associations, Foundations, Federations or Unions, Charitable Foundations and Non-Governmental Organizations with Legal Personality in Another State (maintained by the General Registrar).
• The Register of Express Trusts and Similar Legal Arrangements concerns trusts and similar legal arrangements (maintained by the Cyprus Securities and Exchange Commission).
• The Central Register of Bank Accounts, Payment Accounts, and Safe-deposit Boxes (maintained by the Central Bank of Cyprus).

Each competent authority has issued a directive outlining the specific filing requirements, including the format, method, and scope of information to be submitted. Although there may be some variations between registers, the core information typically required includes:

• Full name, surname, date of birth, nationality, and residential address of each beneficial owner;
• Nature and extent of ultimate ownership or control held directly or indirectly, including details such as percentage of shareholding, voting rights, bearer shares, or other forms of significant influence or control;
• Identification document number, type of document, and issuing country;
• Date on which the individual became a beneficial owner;
• Date on which any changes occurred, or when the individual ceased to be a beneficial owner.

Submission of relevant UBO data for newly established companies, societies, foundations, federations and associations etc needs to be done within 30 days of incorporation, registration or establishment and for express trusts and similar legal arrangements within 15 days. In most cases, this filing is conducted concurrently with the registration of the entity.

Any change to previously filed information regarding the UBOs must be filed within the following timeframes from the day the change becomes known to the person obliged to make the filing:

• 14 days in the case of the Central Register of Beneficial Ownership of Companies and Other Entities,
• 30 days in the case of the Central Register of Beneficial Owners of Associations, Foundations, Federations or Unions, Charitable Foundations and Non-Governmental Organizations with Legal Personality in Another State,
• 15 days in the case of the Register of Express Trusts and Similar Legal Arrangements.

The UBO is obliged to make available certain information and any subsequent changes thereof to the persons obliged to make the filing in order to enable them to comply with their obligations and complete the filing/registration in the relevant register. It is important to note that being identified as a UBO does not, in itself, create a direct legal obligation for the UBO to file information with the applicable register referred to in paragraph 3.

However, holding the UBO status may have other legal and regulatory implications particularly in the areas of taxation, anti-money laundering (AML) compliance, and investigations conducted by competent authorities.

In accordance with the provisions of the Law and the directives issued by the competent authorities, access to the registers varies depending on the type of entity, authority, or individual requesting the information:

• Governmental authorities: Supervisory Authorities, the Unit for Combating Money Laundering (MOKAS), the Customs and Excise Department, the Tax Department, and the Police are granted timely and unrestricted electronic access to UBO information. This access is provided free of charge and without the obligation to notify the company or other legal entity concerned, for the purpose of fulfilling their official duties.
• Obliged Entities under Anti-Money Laundering Legislation: Entities and professionals subject to anti-money laundering (AML) obligations—such as credit institutions, electronic money and payment institutions, entities supervised by the Central Bank of Cyprus, insurance companies, lawyers, auditors, accountants, investment firms, collective investment undertakings and their managers, administrative service providers, crypto asset service providers, betting operators, casinos, art dealers, and others—may access UBO information for the purpose of conducting client due diligence. Access is granted upon submission of a formal application, subject to registration and the payment of any applicable fee.
• General Public: Members of the public are, in principle, entitled to access limited UBO information—namely the beneficial owner’s name, month and year of birth, country of residence and nationality, as well as the nature and extent of the beneficial interest held. Access generally requires electronic registration and payment of the applicable fee. However, this public access has been suspended since November 2022, following a ruling by the Court of Justice of the European Union (CJEU). The CJEU held that the EU-wide requirement for unrestricted public access to UBO registers infringes fundamental rights to privacy and the protection of personal data, as enshrined in Articles 7 and 8 of the EU Charter of Fundamental Rights.

The legal consequences for failing to comply with the obligations related to the identification and registration of UBOs vary significantly depending on the applicable directive and the relevant register in which the disclosure is required.

Central Register of Beneficial Ownership of Companies and Other Entities

Administrative Sanctions: A company or other legal entity, along with the members of its Board of Directors (collectively and individually), may be subject to a sanction of €100, plus €50 for each day of continuation of the breach, up to a maximum of €5,000.

A director or managing director who fails, refuses, or neglects to comply with the obligations is jointly and severally liable with the entity for the imposed fine, unless they exercised due diligence. A person may avoid liability if he/she exercised due diligence, and the breach was not due to any act, omission, or negligence on his/her part.

Criminal Sanctions: Any person found guilty of failing or neglecting to submit UBO information; or knowingly making a false, misleading, or deceptive statement regarding the UBOs, may face:

• Imprisonment for up to one year;
• A fine of up to €100,000; or
• Both penalties.

Criminal liability may also apply to the legal entity and any board member or officer (excluding the secretary) who consented to or participated in the offence.

Striking Off: The Registrar of Companies may strike off a company or other legal entity from the Register of Companies or the Register of Partnerships (whichever is applicable) if the entity refuses, fails, or neglects to comply with its obligations to submit UBO information, in accordance with applicable legislation.

Register of Beneficial Owners of Associations, Foundations, Federations, Unions, Charitable Foundations, and NGOs with Legal Personality in Another State

Administrative Sanctions: The legal person and the members of its Board of Directors (collectively and individually) may be subject to a sanction of €200, plus €100 for each day of continuation of the breach, up to a maximum of €20,000.

Board members may avoid liability if they exercised due diligence, and the breach was not due to any act, omission, or negligence on their part.

Criminal Sanctions: As with companies, any person found guilty of failing to submit UBO information or knowingly providing false, misleading, or deceptive information may be subject to:

• Imprisonment for up to one year;
• A fine of up to €100,000; or
• Both penalties.

Criminal liability extends to the legal person and any board member, officer or other administrative body member who participated in or consented to the offence.

Register of Express Trusts and Similar Legal Arrangements

Administrative Sanctions:

• A sanction of €100, plus €50 for each day of continuation of the breach, up to a maximum of €5,000 for failure to submit required information.
• A distinct administrative sanction of up to €500,000, or up to €1,000,000 in case of repeated non-compliance with the relevant legislation or secondary regulations.

Criminal Sanctions: If found guilty, an individual who refused, omitted, or neglected to file or disclose required information, or who knowingly provided false, misleading, or deceptive information, may be subject to:

• Imprisonment for up to five years;
• A fine of up to €350,000; or
• Both penalties.