Cyprus Eases Fines for UBO Registration: Companies Can Now Register Without Immediate Payment

In a significant policy reversal, Cyprus has opted to ease fines imposed on companies for failing to register their ultimate beneficial owners (UBOs) by the January 1, 2024 deadline. The Registrar of Companies and the Ministry of Commerce faced mounting pressure from professional organizations and deputies across political parties to reevaluate the fines, which were deemed burdensome for businesses. The initial requirement mandated that companies settle fines before registering UBOs, with fines amounting to €200 for each UBO not registered by the specified date and an additional €100 for each subsequent day. This approach was criticized as "debilitating and irrational."

The system, impacting approximately 200,000 Cyprus-registered companies, initially prevented companies from posting UBO information without first paying outstanding fines. The Registrar's decision to change the platform in 2023 further complicated the registration process. The recent announcement allows companies to proceed with UBO registration without an immediate obligation to pay fines. However, it remains unclear whether fines will still be required at a later stage. The Registrar and the Ministry of Commerce are expected to make additional determinations after consulting with professional groups.

The confusion stemmed from the Registrar's platform change and was exacerbated by a lack of clarity in the circular explaining the registration process. Marios Tsiakkis, the general secretary of the Chamber of Commerce (Keve), had expressed concerns earlier, emphasizing that accumulating fines would pose challenges for companies. The fines have now been temporarily suspended, pending further decisions by the Registrar and the Ministry of Commerce.

The issue is slated for discussion at the House commerce committee meeting, where deputies from different parties will explore potential amendments or decrees to address the situation. Elias Myrianthous, an Edek deputy, stressed the need for clarity and indicated that deputies would seek to suspend fines, recognizing their significant impact on companies. Kyriakos Hadjiyiannis, chairman of the commerce committee, underscored the challenges faced by thousands of companies due to the confusing circular. He suggested potential remedies, including the consideration of returning fines already paid.

The House commerce committee meeting is anticipated to provide a platform for comprehensive discussions on potential solutions and amendments to address the complexities arising from the UBO registration process and associated fines.

By fLEXI tEAM