Business world up in arms over electronic register – problems on the market

A number of business associations have sent a joint letter to Registrar of Companies Irene Mylona-Chrysostomou expressing their “serious and strong concerns” over the decree she has issued regarding the smooth transition from the interim to the final solution for the electronic Beneficial Ownership Register, which came into effect on 14 November 2023.

They said that implementing the decree on 1 January 2024 “has caused huge upheaval and many problems in the market and for a large number of companies”, and also said they disagreed with the way the matter was handled by the Department of Registrar of Companies and Intellectual Property.

The letter, which was sent to the Registrar on 10 January, is undersigned by the Institute of Certified Public Accountants of Cyprus (ICPAC), Cyprus Bar Association, Cyprus Chamber of Commerce and Industry, STEP Cyprus, Cyprus Fiduciary Association (CYFA), and Cyprus International Business Association (CIBA).

The associations said they have been inundated with complaints by members and other businesses in the past few days, expressing their disappointment and despair at how the situation has unfolded and complaining that the fines imposed on companies and natural persons (managers/secretaries) are disproportionately high.

They have also been receiving complains that it is not easy to arrange meetings at the Citizens Advice Centres to acquire the codes to access the system, while they said the Registrar’s website itself has been malfunctioning regularly, making it impossible to comply.

The associations urgently requested a meeting with the Registrar to clarify the matter, and find ways to allow the companies and beneficial owners to register their data on the electronic system without having to pay the fine that is calculated up until that day.

“This will help significantly in updating the Register, allowing the country to remain complaint with the relevant European Directive, without unnecessarily punishing companies and other legal entities that wish to comply,” the letter said.

The associations also called for the extended deadline that was applied (up to 29 February 2024) for the submission of data without being fined by the companies that complied with the interim solution up until 13 November 2023, to also apply for trusts and public companies that had also complied by that aforementioned date.

It is noted that the interim solution did not allow these entities to register their beneficial owner, hence fining them could be considered unfavourable and unfair discrimination.

Finally, the business associations want the decisions to impose administrative fines in the aforementioned cases revoked, and for ways to be found to return the fines that have already been paid.