As of the 16 December 2020, Cyprus has initiated the beneficial owners register for Cypriot companies and other legal persons registered in Cyprus. Following that, Cyprus is completely adhering into Directive (EU) 2015/849 law on the prevention of the use of the economic system for the purposes of money laundering or terrorist financing, which is being implemented under the 4th AML Directive.
The EU Member States, following a series of terrorist attacks, have concluded to the necessity to approve the new Directives and subsequently to alter the regulations into national law, with one of the most significant changes to be that the full access to the information of the beneficial owners.
The Registrar of Companies and the Official Recipient has been assigned by the Government of Cyprus to be considered as the capable authority for preserving the register of genuine holder concerning companies and other legal entities.
Despite the fact that Section 61A of the Prevention and Suspension of Money Laundering Activities Law 2007 was providing the formation of the register of beneficial owners, in December 2020, the government of Cyprus declared a secondary regulation initiating the register and engaging the Registrar of Companies as the appropriate oversight body.
The European Union Member States, were obliged by the 4th Anti Money Laundering Directive to permit access to beneficial owner information for companies and other legal entities in a
Beneficial owners of companies are defined as natural persons with a 25 per cent direct or indirect ownership of shares or voting rights, except for publicly listed companies. For trusts, the beneficial owners are the settlor, trustees, protector, beneficiaries and potential beneficiaries, or any other
natural person exercising ultimate control over the trust.
comprehensible and harmonised manner, through central registers to which beneficial owner information is exposed. Thus, the Directive also demanded the initiation of an explicit rule of public access so that 3rd parties could acknowledge the official owners of companies and other legal entities. Although the 4th Directive might be essential, it is also questionable as to how this data will be compatible with the data protection.
For a better understanding of the Directive and the legislation, the termination of a beneficial owner has the meaning of a natural person who preserves the entity concerned and includes at least
According to Article 2 of the AML Law, a ‘beneficial owner' is:
"a natural person who ultimately owns or controls the customer and/or the natural person on whose behalf a transaction or activity is being conducted".
Based on that, a natural person can be a beneficial owner, in cases where a private company is a natural person, who owns and controls the company by having direct/indirect ownership of adequate shares or voting rights. Beneficial owners though that means have to provide to the corporate and other legal entities all the necessary information. Nevertheless, in cases of trusts, the beneficial owner can be the settlor; trustees; protectors; or individuals implementing regulating control over the trust.
Companies and other legal entities have six months from January 18, 2021 to submit information about actual beneficial owners to the Registrar of Companies.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.