Avoid Public UBO Registry

[Martin Everson]

jobe92 said:
I appear in the docs of the company, in a certificate of trust i guess, but I dont appear as the UBO on the companies bank accounts.
So i guess its up to the CSP if they want to reveal the actual UBO to the registry, instead of a nominee.
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Then your at the mercy of your CSP and their actions.

jobe92 said:
True, but isn't it also contradicting all the GDPR rules, with keeping peoples privacy.
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No such thing as privacy in EU its all going. Every year my web provider asks me to update my contact details of domains I own. I can only imagine this database will be made available to EU upon request to search for what websites their citizens operate. 🙁. Would be easy way to catch people red handed if you think about it i.e search they search for Mr Joe Blogs from Sweden and oh look he operate 4 business websites he hides behind domain privacy.

I am literally telling you what the future will be..trust me this is all happening.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[jobe92]

Thank you very much for all your feedback @Martin Everson, I really appreciate it.
I have a few more question.

Martin Everson said:
If your home country is clever enough to cross check all EU company registries and find you as a UBO then they will audit you or at least ask hard questions.
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- In case I pay out dividends from the company, declare it to my local tax office, and pay the tax, then there should be no problems, right?
- There has already been paid Cyprus tax of the profits, and my country has a double tax treaty, which means that I can subtract the tax that has already been paid to Cyprus, from the amount should be taxed in my country, right?
- Also, what kind of documentation should I have in hand, in case my local tax office wants to check something out?

@Admin, did you get a response from your Cyprus CSP?

 

[Martin Everson]

jobe92 said:
- In case I pay out dividends from the company, declare it to my local tax office, and pay the tax, then there should be no problems, right?
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Depends on your tax office but in principle yes. You also need to look at the withholding tax rate to apply as although Cyprus does not apply withholding tax on dividends, under the DTA it may need to be applied with your home country. A local tax advisor would be able to provide more guidance.

jobe92 said:
- There has already been paid Cyprus tax of the profits, and my country has a double tax treaty, which means that I can subtract the tax that has already been paid to Cyprus, from the amount should be taxed in my country, right?
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You need to read DTA "carefully" and determine the details. So your company is 100% considered Cyprus tax resident? Cyprus companies considered non-resident have no access to DTA's btw. Also just because you pay tax in Cyprus is no guarantee you are paying tax in the right place and your local taxman may think differently and under DTA will communicate with Cyprus taxman to establish this. All details will be in DTA.

jobe92 said:
- Also, what kind of documentation should I have in hand, in case my local tax office wants to check something out?
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All historic financial records for all prior years you have been operating the business. Proof Cyprus company operates and is managed and controlled in Cyprus. You then have nothing to worry about at all then.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[kkein]

jobe92 said:
Okay, thank very much for your response, Martin.

I have read that to be listed in the UBO register you need to own 25%+1 of the shares. Is it possible to have multiple owners, for example
me (25%), 1 trusted (25%) and a nominee (50%), and then list the nominee owner? If such a thing as nominee owner exist. 🙂
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Martin Everson said:
"A person has control over a company if they fulfil one or more of the following conditions:

• holding more than 25% of the shares in the company;
• holding more than 25% of the voting rights in the company;
• holding the right to appoint or remove the majority of the board of directors;
• otherwise exercising significant influence or control over the company."

You get the picture now right? Game set and match to EU.
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I recently opened a very similar thread, just to find out someone else, down in page 4 of the mentor group, asked about the same 🙂
However, what if we change a bit the OP suggested setup?
What if he would build up the structure with himself (25%) and 3 other trusted (25% each).
Technically there would be no way to prove or disprove each has more than 25% of anything (voting right, influence, whatever).
And, if i understood the KPMG doc correctly, such a company does not have to land in the registry as there's nobody with more than 25%.

If what i wrote here is correct, then i have 2 related questions
- can only one of the gang of four be cypriot resident to have the corporate bank account reporting to cyprus? Or is that not even needed, if the company is using legit nominee services?
- would there be a sort of easy way to have the dividends flow only into the real UBO personal account, or would it be necessary to actually split them in 4? and if split, what suggested solution would there be to then collect them back without triggering bells?

 

[JohnLocke]

kkein said:
if the company is using legit nominee services?
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Unfortunately regular nominee services like shareholder and director will not help you with this service. We speak about UBO (ultimate beneficial owner) that has to be divided into 4 i.e. 25% each.

This means you will need 4 owners to apply this rule.

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[kkein]

Admin said:
Unfortunately regular nominee services like shareholder and director will not help you with this service. We speak about UBO (ultimate beneficial owner) that has to be divided into 4 i.e. 25% each.

This means you will need 4 owners to apply this rule.
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@Admin, so you are saying that, for corporate accounts, what matters is the UBOs country of residence? I'm asking this because it seems to me that nominee shareholders usually also get access to the corporate accounts, and so it felt like what mattered was where the company is, when it comes to domicile for the corporate accounts.
If i got it wrong, and where the UBOs are tax resident also matters, would all 4 UBOs have to be resident in cyprus in order to make the corporate accounts report to cyprus? Or, if not, what would the relevant regulation be, here?

 

[Martin Everson]

kkein said:
If i got it wrong, and where the UBOs are tax resident also matters, would all 4 UBOs have to be resident in cyprus in order to make the corporate accounts report to cyprus? Or, if not, what would the relevant regulation be, here?
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Where the UBO is resident matters. Reporting will occur to all residencies of UBO's.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[kkein]

Martin Everson said:
Where the UBO is resident matters. Reporting will occur to all residencies of UBO's.
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Thanks Martin. This clarifies the situation. So i guess the only viable ways are to either get 3 more trusted to obtain Cyprus NDR residency or to find other resident and sole-proprietors willing to cross-share their businesses. Like 4 people with cyprus companies (and maybe similar income) could become all owners of each other's companies. Of course this introduces the additional issue of trust. And of whether it's going to be easy to make the money effectively go only into one's pocket for each of the companies.

 

[Martin Everson]

You also need to consider banking. How would it look to bank and how are you going to control the banked money. It's doable but overly complex for what you want to achieve.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[kkein]

Thanks again Martin, this was indeed another aspect quite fuzzy in my mind. How to make the money flow into one's pocket in the end.
By the way, are you still positive that, when the registry will be rolled out, it will be retroactive to 1.1.2020? Some in the public forum write this is not going to happen if one closes the company before?

 

[Martin Everson]

kkein said:
Some in the public forum write this is not going to happen if one closes the company before?
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Depends on registry. For cyprus have a read of below

Hidden owners of companies to be revealed

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[kkein]

Martin Everson said:
Depends on registry. For cyprus have a read of below

Hidden owners of companies to be revealed
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Thanks for the pointer. But for now it doesn't look like Cyprus is going to do this in March 2020. In particular given the mess throughout europe at the moment, i believe they must have other priorities..
I wonder if there is, anywhere online or offline, more up to date info than mid 2019..
I keep hearing "they are not ready", but i don't understand what it means

 

[Martin Everson]

kkein said:
But for now it doesn't look like Cyprus is going to do this in March 2020.
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What makes you think this?

Would be nice if someone had more up to date info. I agree more up to date info is needed.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[kkein]

Martin Everson said:
What makes you think this?

Would be nice if someone had more up to date info. I agree more up to date info is needed.
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I hear that nobody is collecting UBO information at the moment to publish in the upcoming registry.
I hear claims that such a registry can't be retroactive.
OTOH, on your article, the resolution clearly states that the collection and the registry implementation are 2 separate things, so the second's rollout date cannot be taken as "no-retroactivity" timepoint, i feel.
And therefore only uncertainty is left..