Non-Compliance with UBO Disclosures May Lead to Fines for Thousands of Companies
In a recent session, the House commerce committee addressed the pressing issue of Ultimate Beneficial Owner (UBO) disclosures, which has seen a significant number of companies failing to meet the regulatory requirements. The Registrar of Companies had initially set a deadline of December 31, 2023, for all corporate entities to submit their updated UBO information. However, due to widespread concerns raised by the business community, this deadline was extended to the end of March.
Committee chair Kyriacos Hadjiyiannis expressed concern that despite the majority of companies adhering to the directive, a substantial number—approximately 30,000—remain non-compliant. The consequences for these companies are severe, with fines starting at €200 on January 1, 2024, and accruing at €100 for each additional day of non-compliance.
Hadjiyiannis criticized the government for not engaging with stakeholders to find a resolution to this issue, accusing them of unilateral decision-making. Stavros Papadouris, representing the Greens, provided an overview of the situation: out of 202,000 registered companies, 163,000 have filed their updated UBOs. About 10,000 are exempt due to either filing for deletion prior to the law’s enactment or being under liquidation, leaving around 29,000 companies still in breach of the regulation.
The liability extends beyond the companies themselves to include shareholders, directors, and administrators. Papadouris emphasized the need for transparency to understand the nature of these non-compliant businesses and highlighted that fines could escalate up to €20,000.
MPs have previously voiced concerns over the potential damage to Cyprus’s reputation due to non-compliance issues reminiscent of the Panama Papers scandal. They also worry about the impact of hefty fines on small family-owned businesses that may be overwhelmed by the financial penalties associated with delayed UBO disclosures.
The situation remains tense as legislators and business owners alike await the government’s response to this growing compliance gap.
