FAQ's-UBO's
Practical Implementation
1.If the shareholder is the same person as the beneficial owner do I have to enter the UBO details?
Yes, the Companies Register and the Register of Beneficial Owners are two different registers, governed by different laws, with no interconnection between them.
2.If company’s officers have resigned before 12/03/2021 and the company remained with no officers, who is responsible for the submission of the UBOs details?
There is no responsibility for the submission of the UBOs details if the company was left without officers and an application for strike off was submitted as per the provisions of section 327(2A) of Companies Law, Cap.113, prior to 12/3/2021.
In addition, see a relevant announcement by the Department.
In addition, see a relevant announcement by the Department.
3.What happens in the event that company officers resign after 12.03.21?
There is no exemption from the obligation to submit details of the beneficial owner. The company’s officers are obliged to submit the relevant details before they resign.
In addition, see a relevant announcement by the Department.
In addition, see a relevant announcement by the Department.
4.Do companies limited by guarantee have to submit beneficial owner information?
Yes, companies limited by guarantee are also required to submit the relevant details as per the provisions of the Registrar’s 1st Directive.
For example, a company limited by guarantee having 6 members with equal voting rights will enter the beneficial owner’s information of the natural person holding the position of senior management official.
For example, a company limited by guarantee having 6 members with equal voting rights will enter the beneficial owner’s information of the natural person holding the position of senior management official.
5.Companies regulated by the Cyprus Securities and Exchange Commission (variable capital investment companies such as RAIF, AIF, AIFLNP) are exempted from the obligation to submit data?
No, according to the Registrar’s Directive these companies also have the obligation to submit their beneficial owners’ data.
In addition, see a relevant announcement by the Department.
In addition, see a relevant announcement by the Department.
6.Shelf companies, established after 12.03.21 are also obliged to submit the data?
Yes, there is no exemption. They are also considered legal entities with an obligation to submit the relevant data.
7.In the event of registration of a shelf company and until its being sold, should the details of the UBOs be submitted within 30 days of its registration and following the company’s sale the details be updated?
Yes, the company and each of its officers are obliged to submit the relevant data within the timelines defined in articles 8-10 of the Directive.
8.What happens if each of the four beneficial owners of the company/partnership own 25% (and none of them has more control than the other)?
According to section 4 of the Directive ΚΔΠ 112/2021, the company/partnership must take all reasonable measures to obtain and hold at its registered office, adequate, accurate and current information on its beneficial ownership.
If no natural person in the company holds a percentage equal to or greater than 25% plus one share (≥25%+1) and no natural person controls the company by other means, the details of the natural person/s holding the position of senior management official/s in the company can be given as beneficial ownership information.
If no natural person in the company holds a percentage equal to or greater than 25% plus one share (≥25%+1) and no natural person controls the company by other means, the details of the natural person/s holding the position of senior management official/s in the company can be given as beneficial ownership information.
9.In case of registration of Senior Management Official who is a company, what details must be submitted?
According to the interpretative provisions of section 2 of the AML Law, (Ν188(I)/2007), the beneficial owner is defined as the natural person who ultimately owns or controls a legal entity through directly or indirectly.
If no natural person is identified as the beneficial owner based on the ownership rights or when there is doubt that the person identified is the beneficial owner the senior management official details must be declared.Therefore, the details of the natural person must be submitted.
If no natural person is identified as the beneficial owner based on the ownership rights or when there is doubt that the person identified is the beneficial owner the senior management official details must be declared.Therefore, the details of the natural person must be submitted.
10.If the Director of the company is a nominee, who is declared as the senior management officer?
The senior management official of a company or a legal entity is not necessarily the Director. The term senior management official should not be related with the term Director.
You should refer to the interpretation of the «senior management official» in section 2 of the AML Law (Ν188(I)/2007). A nominee company is not higher in the decision-making hierarchy. The nominee company always acts according to the instructions of the beneficial owner of the company or legal entity.
You should refer to the interpretation of the «senior management official» in section 2 of the AML Law (Ν188(I)/2007). A nominee company is not higher in the decision-making hierarchy. The nominee company always acts according to the instructions of the beneficial owner of the company or legal entity.
11.What if there are 2 senior management officers? Should the senior management officer have an address in Cyprus?
According to the interpretative provisions of section 2 of the AML Law, (Ν188(I)/2007) "senior management official” means an executive or employee of an entity with sufficient knowledge of the entity's exposure to the risk of money laundering and terrorist financing, which is at a higher level in the hierarchy for making decisions that affect the exposure to risk, regardless of whether the person in question is a member of the entity's board of directors.
Therefore in case there are two senior management officials both of them should be declared as beneficial owners, provided that all possible means have been exhausted and provided that there are no reasonable suspicions, no person is identified as the beneficial owner or if there is a doubt that the person identified is the beneficial owner.
It is not a prerequisite for the senior management official to have an address in Cyprus.
Therefore in case there are two senior management officials both of them should be declared as beneficial owners, provided that all possible means have been exhausted and provided that there are no reasonable suspicions, no person is identified as the beneficial owner or if there is a doubt that the person identified is the beneficial owner.
It is not a prerequisite for the senior management official to have an address in Cyprus.
12.A company has the following registered shareholders: Mr A, B, C, D and a discretionary CIT (each own 20%). The beneficiaries of this CIT are Mr A and B. Accordingly, would Mr A and B be considered holders of 25%+1 and thus should recorded as UBOs?
According to section 4 of the Directive ΚΔΠ 112/2021, the company must take all reasonable measures to obtain and hold at its registered office, adequate, accurate and current information on its beneficial ownership.
If no natural person holds in the company a percentage equal to or greater than 25% plus one share (≥25%+1), and no natural person controls the company by other means, the details of the natural person/s holding the position of senior management official/s in the company can be given as beneficial ownership information.
You are advised to seek legal advise.
If no natural person holds in the company a percentage equal to or greater than 25% plus one share (≥25%+1), and no natural person controls the company by other means, the details of the natural person/s holding the position of senior management official/s in the company can be given as beneficial ownership information.
You are advised to seek legal advise.
13.A Cypriot company has as shareholder a semi-governmental organisation of a country outside the European Union. Will the semi-governmental organisation be considered as the beneficial owner? And what information must be entered?
The details of the senior management official should be disclosed as the beneficial owner. The senior management official may be the Chairman of the Semi-governmental organisation, unless there is a natural person holding more than 25% shareholding in the organisation.
14.If we already have the details of the beneficial owners, do we have to send a notice to them;
According to Paragraph 5 (4) (a) and (b) of the Registrar’s 1st Directive (ΚΔΠ 112/2021), a company is not required to send a notice if (a) the company has already been informed of the status of a natural person as a beneficial owner and has been provided with all the relevant information or (b) information and details has already been provided to the company by either a member of the company or the natural person or by another person.
15.In a company the shareholders submitted in the register hold 25% + 1. Following a change in the company’s structure the shareholders hold from 20% each, what should be declared?
According to article 10 (1) and 10 (2) of the Registrar’s 1st Directive (ΚΔΠ 112/2021) the company and each of its officials are obliged within 45 days to notify the Registrar of Companies for any changes regarding its beneficial ownership. Therefore the details of the beneficial owner must be submitted within the above timeline.
If no natural person holds in the company a percentage equal to or greater than 25% plus one share (≥25%+1) and, no natural person controls the company by other means, the details of the natural person/s holding the position of senior management official/s in the company can be given as beneficial ownership information.
If no natural person holds in the company a percentage equal to or greater than 25% plus one share (≥25%+1) and, no natural person controls the company by other means, the details of the natural person/s holding the position of senior management official/s in the company can be given as beneficial ownership information.
16.Following the registration of a company, in case that the same day a change in beneficial owner has occurred , who must be declared?
According to section 4 of the Directive ΚΔΠ 112/2021 every company and other legal entity and every official have the obligation to obtain and hold adequate, accurate and current information on its beneficial ownership and to submit this information to the Registrar of Companies, within the timelines specified in articles 8-10 of the Registrar’s 1st Directive (Κ.Δ.Π 112/2021), which has entered into force on 12.03.21.
Therefore, the details of both beneficial owners should be submitted to the Registrar of Companies from 16.03.21.
Therefore, the details of both beneficial owners should be submitted to the Registrar of Companies from 16.03.21.
17.What do you declare when you have three equal shareholders who are all UBOs? Do you declare all three shareholders?
If the percentage they hold falls under the interpretation of section 2 of the AML Law (Ν188(I)/2007), then all three shareholders must be declared.
18.What evidence must be provided to support a request for exemption from publication of beneficial owner’s information?
The Registrar’s Directive does not determine the type of evidence required to be attached in support of a request for exemption. Each case will be examined/evaluated on the basis of the evidence considered by the applicant as being appropriate to support his/her request for exemption via the electronic system.
It is also noted that on the basis of the provisions of article 13(2) of the Registrar’s Directive, the Registrar may ask for further clarifications or submission of further information so as to be able to evaluate a request for exemption.
It is also noted that on the basis of the provisions of article 13(2) of the Registrar’s Directive, the Registrar may ask for further clarifications or submission of further information so as to be able to evaluate a request for exemption.
19.How can obliged entities confirm the information submitted onto the register as part of their measures relating to customer due diligence?
Obliged entites will ensure access to the BO register via the e-system, with the submission of a fee of €3.50 per legal entity, provided that relevant approval has been given by the Department of Registrar of Companies.
20.Companies that have not paid the annual fee of €350 are exempted from submitting beneficial owners details?
No, they are not exempted. The Register of Beneficial Owners is not governed by the provisions of Companies Law. Consequently, company’s obligations deriving from Companies Law do not affect company’s obligations deriving from the Directive for the Prevention and Suppression of Money Laundering and Terrorist Financing Activities (Beneficial Owners Register of corporate and other legal entities) of 2021 (ΚΔΠ 112/2021).
21.Could the beneficial owner of the company be both the Foundation and the Director?
Yes, it could. This depends on the composition of the shareholding structure of the entity.
22.In the event where a Nominee Shareholder is appointed in a company, holding the shares on behalf of an individual through a declaration of trust (all the legal paperwork is in place for him to hold these shares), the information of which individual will be required to be indicated in the register? Especially if the nominee shareholder is a natural person.
The information of the natural person that is the beneficial owner of the legal entity and on behalf of whom the nominee shareholder (physical or legal person) holds the shares in the Company (i.e. through a declaration of trust), should be declared in the register.
It should also be stressed that, in such a case the declaration of trust must specify the natural person on behalf of whom the shares are held by the nominee shareholder. The above, is also on the assumption that the said natural person is not acting as nominee on behalf of another natural or legal person or even a legal arrangement. If this is the case then the chain of ownership must be followed up, up to the point of the beneficial owner.
It should also be stressed that, in such a case the declaration of trust must specify the natural person on behalf of whom the shares are held by the nominee shareholder. The above, is also on the assumption that the said natural person is not acting as nominee on behalf of another natural or legal person or even a legal arrangement. If this is the case then the chain of ownership must be followed up, up to the point of the beneficial owner.
23. On the basis of the following chart, X and Y are the beneficial owners of the Cypriot company, holding 30% each. What should be declared for the remaining percentage of 40% owned by Company C;
(a) the senior management officer of Company C
(b) the senior management officer of the Cypriot company or
(c) non declaration;
(a) the senior management officer of Company C
(b) the senior management officer of the Cypriot company or
(c) non declaration;
Assuming there are no grounds for suspicion or doubt that the natural persons identified (X and Y) as beneficial owners of the Cypriot company are indeed the beneficial owners, then the answer is (c). No additional declaration is necessary for Company C.
24.If individual X holds shares in Company A on behalf of another Individual (Individual U) in accordance with a declaration of trust they have in place, please advise whether the information of Individual U will be required or Individual X, or both.
In case that individual X holds 30% of shares in Company A on behalf of Individual U through a declaration of trust, the information of individual U should be declared on the BO Register.
This is on the assumption that individual U is not acting as nominee on behalf of another natural or legal person or even a legal arrangement. If this is the case then the chain of ownership must be followed, up to the point of the Beneficial Οwner.
This is on the assumption that individual U is not acting as nominee on behalf of another natural or legal person or even a legal arrangement. If this is the case then the chain of ownership must be followed, up to the point of the Beneficial Οwner.
25.The company structure has 3 shareholders with 17% each (with voting rights and dividends) and another 1 shareholder with 49% but without voting rights and without dividends. Who should be declared as a beneficial owner?
In this case, the company must carefully review its Articles of Association and any other arrangement that might exist between the shareholders, including the dividend split ratio, to conclude as to who is the BO. It is recommended to seek legal advice.
26.In a company, A has 35%, B has 30%, C has 24%, D has 6% and E has 5% of the shares. We should only declare as beneficial owners the individuals A&B that possess over 25%+1 of the shares? What about the other natural persons holding a percentage below 25%. Should they not be declared?
Only the BO details of the individuals A and B should be declared on the BO Register.
27.If there are two shareholders in the company where the one holds 75% of the shares but has more voting rights and the other holds 25% of the shares but has more dividends. Who is declared as the beneficial owner?
In this case, the company must carefully review its Articles of Association and any other arrangement that might exist between the shareholders, including the dividend split ratio, to conclude as to who is the BO. It is recommended to seek legal advice.
28.In the case of ordinary shares with voting rights, the participation percentage is entered only in the relevant field under option “percentage of shares” or is it also entered under option “voting rights”?
The percentage of shareholding may be disclosed either in the relevant field under option “percentage of shares” or under option “voting rights”. You must not complete both options.
29.In the case where two natural persons hold 50% of the shares each, and both participate equally, in the company’s management, which of the two persons do we declare?
Both individuals must be declared.
30.If the BO holds more than 25% of shares, for example 94% of shares, should I submit the details in the relevant field under section “percentage of shares”, without filling the field in section “voting rights” if the BO has the voting rights by virtue of holding those 94% of shares (1 share = 1 vote)?
The 94% shareholding may be declared either under option “voting rights” or under option “percentage of shares”.
31.Does the secretary of a company included to the "officers of the Company" who have the ability to submit the details of the Beneficial Owner onto the register through their profile in "Ariadne"?
Yes, according to the definition in the Companies Law "officer", in relation to a legal entity, includes a director, manager or secretary.
