Title: Cyprus Companies Scramble to Comply with UBO Regulations Ahead of Deadline
In a recent parliamentary session, it was revealed that a significant number of Cypriot companies are at risk of incurring substantial fines if they fail to update their records on ultimate beneficial owners (UBOs) by the looming March 31 deadline. Out of approximately 230,000 registered companies in Cyprus, only 140,000 have complied with the directive issued by the Registrar of Companies, which initially set the deadline for December 31, 2023.
Companies that missed the initial deadline were subject to a €200 fine starting January 1, 2024, with an additional €100 penalty for each day of continued non-compliance. Following numerous complaints, authorities extended the deadline to March. However, non-compliant companies could face fines up to €20,000, raising concerns among parliamentarians about the potential negative impact on Cyprus’s reputation in the wake of scandals such as the Panama Papers.
Kyriacos Hadjiyianni, chair of the House commerce committee, has advocated for the reduction of bureaucratic hurdles, proposing the elimination of the HE-32 form requirement. This statutory document, which includes shareholder and financial details, is deemed redundant since audited financial statements already contain UBO information.
Elias Myrianthous, an Edek MP, highlighted that among the 90,000 entities yet to update their UBO records, 70,000 have requested deletion from the registry—a process complicated by objections from tax authorities and banks. The backlog is reportedly overwhelming the Registrar’s office.
Further complicating matters, the ongoing conflict between Ukraine and Russia has made it difficult for many Cypriot companies to contact their UBOs residing in these countries. Greens MP Stavros Papadouris emphasized the urgency of the situation, noting that individuals responsible for declaring UBOs for multiple companies could face cumulative fines amounting to millions of euros.
With time running short and potential fines threatening to “crush” many family businesses, MPs are urging the finance ministry to swiftly propose solutions. The situation underscores the need for efficient regulatory processes and highlights the challenges faced by businesses in navigating international compliance requirements.
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