All You Need to Know about UBO Registration, and When the Requirement is Triggered

In an ever-evolving international landscape that demands transparency, understanding the regulations surrounding the Ultimate Beneficial Owner (UBO) is paramount. This article unpacks the essentials of UBO registration, especially within the context of Cyprus.

1. Understanding UBO (Ultimate Beneficial Owner):

A UBO refers to an individual who ultimately owns or controls more than 25% of a company’s shares or voting rights, or who otherwise exercises control over the company or its management. It’s a mechanism to identify and document individuals who own, control, or derive substantial benefits from a company, even if they are not on the company’s board or share register.

2. The Need for UBO Registration:

The principal goal behind UBO registration is to foster transparency, combat financial crimes like money laundering, terrorist financing, and tax evasion. By keeping a record of the actual owners, governments and authorities can effectively track the flow of funds and prevent misuse.

3. Cyprus and UBO Registration:

Cyprus, in line with the EU’s 5th Anti-Money Laundering Directive (5AMLD), has taken steps to establish a centralized UBO register.

Registration Platform: The Department of Registrar of Companies and Official Receiver in Cyprus has initiated a platform for entities to declare their UBO details.

Accessibility: The UBO register in Cyprus will be accessible to competent authorities, Financial Intelligence Units, and even the general public, although the latter might have restricted access in terms of the depth of information available.

4. When is UBO Registration Triggered?

The requirement for UBO registration is triggered in various scenarios:

New Incorporations: Companies being incorporated in Cyprus will need to provide UBO details as part of the registration process.

Existing Entities: Companies already operating in Cyprus are required to ensure their UBO details are updated and lodged with the centralized register.

Changes in Ownership: Any change in the ownership structure or if a new UBO emerges, the company needs to update the details in the register.

Annual Verification: Companies may be required to verify and reconfirm their UBO details annually to ensure accuracy.

5. Penalties for Non-compliance:

Failure to adhere to UBO registration requirements can lead to stringent penalties, including fines. Companies in Cyprus need to be proactive in ensuring that their UBO details are up-to-date and accurately reflected in the central register.

6. Moving Forward with UBO Compliance:

For companies, it’s not merely about compliance but understanding the essence of these regulations:

Due Diligence: Companies should have internal procedures in place to identify and verify their UBOs.

Awareness: Keeping abreast of the evolving regulatory landscape and understanding the implications of non-compliance.

Conclusion:

In a globalized world, UBO registration acts as a sentinel, ensuring transparency and accountability. For businesses operating in Cyprus, comprehending and aligning with UBO requirements is not just a legal obligation but a testament to the company’s commitment to ethical operations.

If you need clarity or assistance regarding UBO registration in Cyprus, Advocates Cyprus stands ready to guide you. Our seasoned experts ensure seamless compliance, keeping you informed every step of the way.

For insights or queries on UBO registration and other regulatory requirements, connect with us at [email protected] or call +357 24 023370.

About Advocates Cyprus:

At Advocates Cyprus, we blend profound legal expertise with a commitment to excellence. Our team, armed with extensive knowledge of the Cypriot regulatory environment, ensures that our clients always remain a step ahead.

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Published on: 18/09/23