By: AGP Law | A.G. Paphitis & Co Law Firm
In an era of increased transparency and accountability, the Department of Companies and Intellectual Property is taking significant steps to ensure that companies and legal entities operating in Cyprus, according to Companies Law Cap. 113, are compliant with regulations regarding the registration of Beneficial Owners.
This notice serves as a reminder to all companies, from locally incorporated businesses to European Public Limited Liability Companies (SEs) and cooperatives, to promptly register the details of their Beneficial Owners in the Register of Beneficial Owners of Companies and other legal entities. Failure to comply by the deadline could result in financial penalties and legal consequences.
The Importance of Registering Beneficial Owners
The Register of Beneficial Owners plays a crucial role in enhancing transparency and preventing financial crimes such as money laundering and terrorist financing. It provides authorities and stakeholders with essential information about individuals who ultimately own or control companies and legal entities. This information is invaluable for maintaining the financial system’s integrity and ensuring that businesses operate ethically and within the boundaries of the law.
Key Dates and Deadlines
The Department of Companies and Intellectual Property has outlined key dates and deadlines for compliance with the registration of Beneficial Owners.
All companies and legal entities are required to register the details and information of their Beneficial Owners in the Register of Beneficial Owners by September 30, 2023. This deadline is fast approaching, and immediate action is necessary to meet this requirement.
Upon the commencement of the final solution of the electronic system of the Register of Beneficial Owners, there will be a one (1) month period during which entities can confirm and complete the information previously recorded in the interim solution system. During this time, requests for exemptions from disclosing information and explanations for due diligence should also be submitted.
Automatic Imposition of Fines
After the one-month confirmation period, non-compliant companies and legal entities will face automatic fines through the final solution of the electronic system. These fines are significant and can accumulate rapidly, making compliance crucial.
Financial Penalties and Legal Consequences
The Department has made it clear that, irrespective of criminal liability or prosecution of individuals, companies, and legal entities, as well as their officials, will be subject to financial burdens for non-compliance. This includes an initial fine of €200, with an additional €100 for each day of continued violation, up to a maximum of €20,000, total charge.
However, it’s important to note that officials of companies or legal entities can avoid financial burdens if they can demonstrate due diligence in complying with the relevant laws and directives (N.188(I)/2007 and of the Directive P.I. 112/2021) and can prove that the violation did not result from their acts, omissions, or negligence.
Conclusion
In essence, compliance with the registration of Beneficial Owners is a critical obligation for all companies and legal entities operating in Cyprus. The Department of Companies and Intellectual Property is committed to enforcing these regulations to uphold transparency, integrity, and financial security. Acting promptly to register Beneficial Owners before the September 30, 2023, deadline is not only a legal requirement but also a responsible step towards a more transparent and compliant business environment. Avoid the risk of financial penalties and legal consequences by acting today to ensure compliance with these important regulations.
For further information please contact our corporate team at [email protected]
The information provided by AGP Law | A.G. Paphitis & Co. LLC is for general informational purposes only and should not be construed as professional or formal legal advice. You should not act or refrain from acting based on any information provided above without obtaining legal or other professional advice.
