Cyprus businesses must name true owners in AML bid

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Businesses based in Cyprus will be obliged to declare their true owners, as Cyprus takes steps to shed its spotty reputation as a money-laundering haven, to protect its fragile economy and to attract foreign investment, a senior government official said Wednesday.

As of next year, such information will also be made available to the public.

Companies will need to file their data with a new registry which went online last month, which “bolsters transparency in what is often a murky web of false fronts behind which money laundering and other illicit activities can take place,” said Commerce and Energy Minister Natasa Pilides.

Talking at an online seminar, Pilides said the new registry will be “recording the correct and updated information regarding the true beneficiary which is instrumental in tracking down criminals who would otherwise conceal their identity behind a company structure”.

The minister stressed that money laundering, as well as the financing of terrorism and organised crime, remain major problems for the international community, which is why the European Union is trying to introduce regulations at the central level.

Cyprus has for years been struggling to clear its name as a money-laundering haven, to protect its fragile economy and to attract foreign investment.

Recently the island’s lawmakers introduced a number of laws to ward off nefarious businesses from taking advantage of low corporate taxes, among those being double taxation avoidance treaties.

The latter treaties provide that companies will be taxed in the country where they produce their goods or services, putting an end to shell companies taking advantage of Cyprus’ lenient tax system.


12 months to sign up

All companies and other legal entities registered in Cyprus prior to March 16 will be given up to 12 months to sign up with the Cypriot government portal Ariadni and declare their true owner.

The true beneficiary of a company is defined as any individual holding more than 25% of the equity, the majority of voting rights or exercising effective control of the entity through other means such as family connections.

If no individual meets the ownership requirements, then a senior executive must be assigned as the owner.

Companies that have registered after March 16 have 30 days to provide the information.

Due to legal restrictions, access to the ownership information will be restricted to monetary bodies, police, the tax department, and financial crimes investigators (MOKAS) for the next year.

Public access to this information could be granted in 2022, following legislative changes.

The EU aims to put all member states’ company registries listing the true owners in a single, centralised database.