Ultimate Beneficial Owners: new rules mean Cyprus-based companies must act now

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Late filing or non-compliance with new EU anti-money laundering regulations could bring large fines and reputational damage

Cyprus-based entities have just a few weeks left to comply with new rules on the registration of Ultimate Beneficial Owners (UBO). The current deadline is 12 March, 2022 and the process can be complex - so it's vital to start now.

The rules are being brought in as a result of the fifth EU Anti-Money Laundering Directive (AMLD) and cover companies and other legal entities incorporated in the Republic, all of which must submit their details to the UBO Register in Cyprus.

Cyprus has only recently begun to act on the directive, following suit of other EU countries. The directive requires member states to keep a register providing insight into organisations' UBOs. The aim is to ensure money laundering and terrorist financing are not being hidden behind legal entities.

All Cyprus-registered entities must submit information to the UBO Register before 12 March 2022. Failure to comply risks financial and criminal sanctions, as well as significant reputational damage. And liability would rest with the company directors - something no director would want to underwrite.

Establishing UBO credentials can be time-consuming, which is why it's vital not to delay. Intertrust Group's team in Cyprus is fully versed in the requirements of the new regulation and can help ensure your UBO information is filed at the right time.

Cyprus legal entities must act now for UBO registration

There has been a global drive for greater transparency in financial entities, with regulators getting tougher with organisations that fail to obey the rules.

One challenge around UBOs is identifying who the owner might be. Under the Cypriot rules, a UBO is defined as holding 25% plus one share. When it's not possible to identify the UBO - for example if five shareholders each hold equal shares of 20% - then the senior management might need to be registered as UBO. So it can take time to establish and agree on a legal entity's UBO.

Establishing the UBO in Cyprus can be particularly difficult for entities that are part of complicated and multilevel ownership structures or that are ultimately held by private equity, joint ventures or hybrid organisations.

For most companies, however, there should be no issue in establishing the UBO and, once registered, it's business as usual. For those concerned with publicly disclosing the UBO, there is the possibility to opt out within the application. We can advise on what steps to take in cases where discretion is key.

How Intertrust Cyprus can help you with UBO registration

Intertrust Cyprus can help ensure compliance and register the UBOs of your existing entity. We offer a range of services, including a review of corporate structure for new clients and an annual review for existing clients during which we will establish the UBO in accordance with local implementation of AMLD.

We coordinate data collection from different sources, assess and verify the relevant information that needs to be reported and file it with the local authorities. We can also help you register changes to your UBO structure as these must also be reported promptly.

How Intertrust Group can help in Cyprus

Finding the right partner to help you navigate Cyprus's complex compliance regulations can save time and money. We can help you understand the new legislation and provide the processes and technology you need to stay ahead.

Our Limassol office helps corporate clients and fund managers seeking to incorporate companies, administer existing Cypriot companies or build a local business.

We ensure smooth collaboration between our clients and key local specialists with extensive knowledge of local rules and regulators. Our teams support you and ensure your compliance.

Why Intertrust Group?

• Intertrust Group is a publicly listed company with more than 65 years' experience providing world-class trust and corporate services to clients around the world.
• Our 4,000 professionals work together across 30 jurisdictions to offer undisputed global reach, deep local knowledge and an extensive international network to help clients achieve their strategic goals.
• Intertrust Group provides a wide range of financial and administrative services to clients operating and investing in the international business environment. We help companies expand globally, offering support with restructuring, outsourcing and further developments.