Cyprus companies were refunded for late registration in the electronic register

The process of refunding the financial fees paid by companies in Cyprus between January 1 and January 16, 2024, has been completed.

This was announced by the Department of Company Registration and Intellectual Property on Monday, February 12.

As a result, the total monetary refund exceeded €2 million. This is the amount of fines the department managed to collect from local organizations. The refund was made directly to the accounts of the companies from which the payment was made.

On January 1, 2024, Cyprus launched an electronic register of the final beneficiaries of companies.

However, it turned out that the system did not work correctly. Because of this, many could not provide the necessary data until December 31, 2023, as provided by the regulations. The Department of Company Registration and Intellectual Property received hundreds of complaints. This included complaints about the customer service, which was impossible to reach.

Therefore, the department decided to extend registration on the platform until March 31, 2023. Since some companies have already managed not only to issue fines but also to collect money from them, it was decided to make a refund.

It should be noted that the creation and launch of the electronic registry is being handled by a private company, which won the state tender.

The money for the digital version of the final beneficiary register was allocated from the EU funds within the framework of the Cyprus Recovery and Development Program. The digital portal with data on ultimate beneficiaries is periodically tested. A beneficial owner, or Ultimate Beneficial Owner (UBO), is an individual who ultimately owns or controls a company. The following ways of ownership or control can be distinguished:

1. direct - the beneficial owner directly owns more than 25% (25% + 1 share) of the shares or has an interest in more than 25% ownership of the company;
2. indirect - the beneficiary owns shares/interest in the company in the above amounts through a legal entity;
3. mixed - the direct and indirect ownership of the beneficiary is more than 25%.

In addition to an individual, the beneficiary of a company can be a trust, foundation, or listed company. If a partnership is the beneficial owner of a company, the individuals behind the partnership controlling the company must be disclosed.

What details of the beneficial owners are entered in the Register?

For individuals:

1. Full name, date of birth, citizenship, current place of residence;
2. passport details, country of issue;
3. the size of the share of ownership (direct or indirect);
4. date of entry of data about the natural person in the Register as UBO;
5. the date on which the individual's details were amended or the date on which the individual ceased to be the company's UBO.

For trusts and foundations:

1. name, registration number (does not apply to trusts outside Cyprus), country of jurisdiction;
2. legal address (not applicable to trusts);
3. nature and amount of the beneficial interest;
4. the date of entry of the legal entity in the Register as a UBO;
5. the date of amendment of the legal entity or the date on which the legal entity ceased to be a UBO of the company.

Liability for failure to provide the information is a fine of EUR 200 and an additional EUR 100 for each day of delay (the maximum fine may reach EUR 20 thousand). If the company, after receiving the notice, fails to provide information or violates the established deadlines for entering information, or knowingly enters false information into the Register, the company and its officials may be held criminally liable (imprisonment up to 1 year with a fine of up to 100 thousand euros or without a fine).

Previously, only competent law enforcement authorities such as MOKAS (Money Laundering Unit), the Cyprus Police, and the Central Bank had access to the Registry. Currently, any member of the public can obtain information on the name, date of birth, nationality, and country of residence of the UBO, as well as the nature and extent of the beneficial interest after submitting a paper application and paying a fee of €3.5. It is planned that in the future any person will be able to view data on the name, surname, date of birth, citizenship, and current place of residence of the UBO on the date of application in the public domain.