The Central Bank of Cyprus issued a circular on working with shell companies

On November 2^nd, 2018, the Central Bank of Cyprus published a circular for all credit and payment organizations related to working with shell companies.

According to the circular of the company, “shells” are companies that do not have an actual presence in the country of registration, and also do not carry out activities in such jurisdiction. The actual presence in the country is confirmed by the presence of an office or building in which the company’s governing bodies operate.

If the company meets the above characteristics and does not pass an audit with a licensed qualified auditor and / or has registration in a jurisdiction included by the OECD or the EU in the list of countries that do not cooperate on tax information exchange, or does not have tax residence, then interaction with such companies should be discontinued.

In all other cases, when a company falls under the concept of a “shell” company, banks must independently decide on the possibility of cooperation by substantiating and documenting their decision.

In the near future, banks are required to bring their policies in line with the requirements of the Central Bank of Cyprus.

On materials of the following website: https://kps.com.cy/wp-content/uploads/2018/10/Shell-Companies-2018.pdf