Nicosia, Cyprus. Officials said on Thursday they are working on legislation that would give authorities discretion to bar the registration of companies for national security reasons where such entities are controlled by non-EU nationals.
Focus on Turkish ultimate beneficial owners
Officials said the legislation is driven primarily by concerns over the registration of companies whose ultimate beneficial owners (UBOs) are Turks. In parliament, officials acknowledged instances of companies registered in the Republic where UBOs are of Turkish nationality.
Concerns raised in parliament
Edek MP Marinos Sizopoulos said two issues arise: the risk of espionage and the acquisition of immovable property by companies “with Turkish interests”.
Registrar cites ongoing attempts to register companies
Irini Mylona-Chrysostomou, the Registrar of Companies, told MPs the matter “is very important and serious”. She confirmed ongoing attempts by persons “of Turkish interests” to register companies, adding that when the Registrar identifies such cases it liaises with district officers before approving registration.
Disclosure requirements under UBO register
Turkish nationals who are UBOs of companies or partnerships registered in Cyprus are subject to mandatory disclosure in the central Register of Beneficial Owners managed by the Registrar of Companies. The framework, aligned with EU Anti-Money Laundering directives, requires identifying any natural person holding more than 25 per cent of shares or voting rights, or otherwise exercising control.
Two bills under review
An official with the attorney-general’s office said the office is currently providing feedback on two government-drafted bills. One bill applies to corporations and the other to partnerships between individuals.
Scope of the proposed corporations bill
Officials said the corporations bill would regulate company registration, the transfer of a company’s seat to a different jurisdiction, and changes in a company’s officials. It would also give authorities the right to strike companies from the registry on national security grounds.
Audit committee chair says issue went unchecked
Speaking to media later, Diko MP Zacharias Koulias, who chairs the House audit committee, said the situation has gone “unchecked” for years.
How do you think the proposed bills could affect the registration of companies in Cyprus?
