EXPRESS TRUSTS: THE REGISTER FOR BENEFICIARIES

July 2, 2021 > Cyprus > Tax & private client

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INTRODUCTION

 On the 18th of June 2021, the Cyprus Securities and Exchange Commission (the “CySec”) pursuant to Article 61C of the Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2021 (the “AML Law”) issued a regulation (Regulatory Administrative Act 257/2021) (the “Directive”), identifying the obligations and procedure for the registration, notification, administration, maintenance and update of the information in relation to the Beneficial Owners (the “BOs”) of express trusts and other similar legal arrangements with the electronic system created by CySec (the “System”).

Meaning of BO: as per the AML Law a beneficial owner means any physical person who has the ultimate ownership or control of a legal entity and in relation to trusts includes the following persons:

  1. the settlor,
  2. the trustee,
  3. the protector (if any),
  4. the beneficiary; or
  5. any other physical person who exercises control of the trust through director or indirect ownership or other means.

Information to be filed as to express trusts and other similar legal arrangements

The information that must be submitted in relation to express trusts or other similar legal arrangements in the register is the following:

  1. Name of the trust;
  2. Country of jurisdiction and date of establishment of the trust;
  3. Governing law;
  4. Date of expiration (if any);
  5. In relation to a similar legal arrangement, the type of such arrangement;
  6. Information as to the country of domicile or residence of the trustee or other person having an equivalent position and the residential address;
  7. In the event that the trustee or other person having an equivalent position is placed or resides outside the EU and concludes a business relationship on behalf of the express trust or the similar legal arrangement in the Republic of Cyprus, the date of commencement of the business relationship, the name of the person with whom a business relationship is concluded as well as the agreement governing the business relationship;
  8. In the event that the trustee or other person having an equivalent position is placed or resides outside the EU and acquires immovable property in the name of the express trust or the similar legal arrangement in the Republic of Cyprus, the registration number and address of immovable property as well as the title of ownership of the immovable property;
  9. Any other information and/or supporting documents that may be required by CySec.

Information to be filed in relation to BOs as to express trusts and other similar legal arrangements

The information that must be submitted in relation to BOs of express trusts or similar legal arrangement in the register is the following:

  1. Name and surname;
  2. Father’s name;
  3. Date of birth;
  4. Place of birth;
  5. Nationality(ies);
  6. Residential address;
  7. Number, type and country of issuance of the identification document;
  8. Date of death (if applicable);
  9. Date on which the natural person has become beneficial owner;
  10. The nature and extent of the beneficial interests held directly or indirectly by each beneficial owner;
  11. Role of the said person in the express trust or similar legal arrangement;
  12. Any other information and/or supporting documents that may be required by CySec.

Access to the Register

In accordance with the Directive published by CySec, access to the Register is granted to an authorised user which means a natural person who is registered with the Register:

  1. under his capacity as trustee of an express trust or other person having an equivalent position to other similar legal arrangement; or
  2. to the following persons as per Article 61C (12) (a) – (d) of the AML Law:
    1. to the responsible Supervisory Authority, as defined by Section 59 of the AML Law, Unit, Customs and Excise Department, Tax Department and Police without any limitations;
    2. to obliged entities* for due diligence purposes and identification of their clients upon payment of respective fee;
    3. to legal or physical persons that can demonstrate legitimate interest in accessing the registry and proving the same through relevant procedure to be implemented, upon payment of respective fee;
    4. to legal or physical persons in relation to a trust which holds or owns a controlling interest in a company that is not incorporated in Cyprus upon the written request of the said persons and payment of respective fee;

(Collectively referred to as the “Authorised Users”)

*Obliged entities as defined by Section 2A of the AML Law means (i) credit institutions, (ii) financial institutions and (iii) natural or legal persons acting in the exercise of their professional activities which among other include the auditors, external accountants and tax advisors, notaries and other independent legal professionals and company service providers.

The procedure to be followed in relation to the registration of the Authorised Users to the System will be indicated in a guidance to be published by CySec.

Access by obliged entities

For the purpose of accessing the register an obliged entity must provide CySec with the following documents:

  1. Declaration by the obliged entity that the purpose of accessing the register relates solely in the context of conducting due diligence and identification measures for the client;
  2. Consent by the trustee or other person having an equivalent position for such access;
  3. Any additional information and/or document that CySec may require.

An obliged entity shall have access to the following information in relation to the BOs of express trust or similar legal arrangement:

  1. Name and surname;
  2. Month and year of birth;
  3. Country of residence;
  4. Nationality;
  5. Nature and extent of the beneficial interests held directly or indirectly by each beneficial owner.

Access by natural or legal persons with legitimate interest

For the purpose of access to the register by a natural or legal person with a legitimate interest the following shall apply:

  1. The application by the natural or legal person must be submitted to CySec through the System duly justified;
  2. In the event that CySec decides that legitimate interest exists, CySec informs the trustee or other person having an equivalent position accordingly and shall provide a period of ten (10) days for submitting any written representations;
  3. CySec after taking into consideration any written representations that may be submitted, notifies its final decision to the applicant and the trustee or other person having an equivalent position.

 Access by natural or legal persons with controlling interest

For the purpose of access to the register by a natural or legal person in relation to a trust which holds or owns a controlling interest in a company that is not incorporated in Cyprus upon the written request of the said persons the following shall apply:

  1. The application by the natural or legal person must be submitted to CySec through the System duly justified;
  2. During the examination of the application for accessing the register, CySec may in its own discretion request from the applicant further information and/or details and/or documents and/or the opinion of any other person or authority.

Exception

In exceptional circumstances, it is possible to provide for exceptions to the access to information in relation to the BOs, in part or in whole, where that information would expose the BOs to a disproportionate risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation or where the BO is a minor or is legally incompetent.

For the purpose of requesting an exception to the access to information in relation to the BOs of the express trust or similar legal arrangement, in part or in whole, the following shall apply:

  1. The application must be submitted to CySec through the System duly justified;
  2. During the examination of the application for accessing the register, CySec may in its own discretion request from the applicant further information and/or details and/or documents and/or the opinion of any other person or authority.

Timeframes

The trustee of a newly established express trust or other person having an equivalent position to a similar legal arrangement who resides in the Republic of Cyprus has to submit to CySec through the System an application for registration with the register within fifteen (15) days from his appointment.

The trustee of an existing express trust or other person having an equivalent position to a similar legal arrangement who resides in the Republic of Cyprus has to submit to CySec through the System an application for registration with the register within six (6) months from the effective date of the Directive being the date of its publication in the Official Gazette of the Republic of Cyprus i.e., 18th of June 2021.

In the event that a change is made in relation to the BO’s information already filed, the new information must be submitted within fifteen (15) days from the date that the trustee received notice of such change. In the event that the change relates to the trustee, the obligation of notifying such change to CySec lies with the new trustee.

Fees and subscriptions

The trustee or other person having an equivalent position must pay to CySec for the purpose of registration and/or renewal of registration of the express trust or other similar legal arrangement in the register a subscription that will grant access for the period of one (1) year as follows:

  1. EUR 250 for 1-5 express trusts or similar legal arrangements;
  2. EUR 400 for 1-10 express trusts or similar legal arrangements;
  3. EUR 700 for 1-20 express trusts or similar legal arrangements;
  4. EUR 900 for 1-30 express trusts or similar legal arrangements;
  5. EUR 1250 for 1-50 express trusts or similar legal arrangements;
  6. EUR 2000 for 1-100 express trusts or similar legal arrangements;
  7. EUR 3600 for 1-200 express trusts or similar legal arrangements;
  8. EUR 4800 for 1-300 express trusts or similar legal arrangements;
  9. EUR 7000 for 1-500 express trusts or similar legal arrangements;
  10. EUR 12000 for 1-1000 express trusts or similar legal arrangements.

The obliged entities that submit an application for accessing the register must pay to CySec a subscription that will grant access for the period of one (1) year as follows:

  1. EUR 250 for 1-50 express trusts or similar legal arrangements;
  2. EUR 450 for 1-100 express trusts or similar legal arrangements;
  3. EUR 800 for 1-200 express trusts or similar legal arrangements;
  4. EUR 1750 for 1-500 express trusts or similar legal arrangements;
  5. EUR 3000 for 1-1000 express trusts or similar legal arrangements.

Natural or legal persons that submit an application for accessing the register and can prove a legitimate interest must pay to CySec a subscription that will grant access to the register for the period of one (1) month as follows:

  1. EUR 500 for 1-5 express trusts or similar legal arrangements;
  2. EUR 900 for 1-10 express trusts or similar legal arrangements;
  3. EUR 1600 for 1-20 express trusts or similar legal arrangements;
  4. EUR 2100 for 1-30 express trusts or similar legal arrangements;
  5. EUR 3000 for 1-50 express trusts or similar legal arrangements;
  6. EUR 5000 for 1-100 express trusts or similar legal arrangements.

Natural or legal persons in relation to a trust which holds or owns a controlling interest in a company that is not incorporated in Cyprus upon the written request of the said persons for accessing the register must pay to CySec a subscription that will grant access to the register for the period of one (1) month as follows:

  1. EUR 250 for 1-50 express trusts or similar legal arrangements;
  2. EUR 450 for 1-100 express trusts or similar legal arrangements;
  3. EUR 800 for 1-200 express trusts or similar legal arrangements;
  4. EUR 1750 for 1-500 express trusts or similar legal arrangements;
  5. EUR 3000 for 1-1000 express trusts or similar legal arrangements.

DISCLAIMER

This publication has been prepared as a general guide and for information purposes only. It is not a substitution for professional advice. One must not rely on it without receiving independent advice based on the particular facts of his/her own case.  No responsibility can be accepted by the authors or the publishers for any loss occasioned by acting or refraining from acting on the basis of this publication.

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