After 9/11 2001, there has been a dramatic change in the way banks, tax advisors, and other professionals work. Among other things, it has been decided that banks and relevant advisors must make sure that the money their clients are in possession of does not come from hard criminality and is not going to be used for hard criminality.
Therefore, if one is going to establish a trust, a company on Cyprus or open an offshore bank account, one must go through a KYC/AML analysis. KYC stands for “Know Your Client” and AML stands for “Anti-Money Laundering”. The KYC/AML analysis and documentation requirements connected with it often seem very inconvenient and troublesome, but they are unfortunately unavoidable.
Here is a list of the documents that must be provided:
- A) The activities in the Cyprus company
A description in English of the intended activities of the Cyprus company. If the Cyprus company is going to be a holding company, one must indicate which companies the Cyprus company will be a holding company for. In addition, the activities of the companies that the Cyprus company is the holding company for must be described. For the companies that are going to be owned by the Cyprus company, authorized translations of the following documents must be sent in:
- Deed of foundation
- Certificate of registration
- Official list over managers and those authorized to sign
- List of present shareholders
- Certified copy of passports for all managers in the company
- Certified copy of passports for all persons who are shareholders in the company
- For company shareholders, authorized translated company documents must be sent in
- B) Shareholders in a Cyprus company
If the future shareholder in the Cyprus company is a person, the following documents must be enclosed for the person:
- Bank certified copy of passport
- Bank certified declaration of the person’s private address
- Introduction letter from the person’s bank
- Introduction letter from the accountant/lawyer/service provider
- CV in English
Ad. 1. Bank certified copy of passport
On the passport copy, the bank must write:
“Having seen the individual and the identification documents (passport copy certified the 10. December 2007), I hereby certify this is a true copy and the photograph is a reasonable likeness.”
Then the bank must stamp and sign the passport copy.
Ad. 2. Bank certified declaration of the person’s private address
The bank must confirm in writing the person’s private address.
Ad. 3. Introduction letter from the person’s bank
The bank must write a letter to whoever is going to form the Cyprus company and write for example:
“Copenhagen Legal
12 Kennedy Avenue
Kennedy Business Center
2nd floor, P O Box 24293
1703 Nicosia, Cyprus
(Date)
Dear Sirs,
We hereby confirm that Mr/Mrs ……………………………………… is well known to us for ………………………. years and in our opinion is of good financial standing and trustworthy person in his/her business obligations.
This is given without any risk, responsibility or any engagement on our part.
(Signed)
Name of bank”
Ad. 4. Introduction letter from your local accountant/lawyer/service provider to the lawyer/accountant on Cyprus
The letter can for example say:
”T.T.H. Law firm
12 Kennedy Avenue
Kennedy Business Center
2nd floor, P O Box 24293
1703 Nicosia, Cyprus
(Date)
Dear Sirs,
Reference for (name and address)
I confirm that I have known Mr/Mrs ………………………. for the last …….. years, acting for him/her (state capacity in which you have acted) and have also acted for him/her in relation to (give name of company) and that the address is the address shown in our records for him/her.
I confirm that I know him/her to be a person of integrity, honesty and good character and that there is no reason why you should not act on his/her behalf and provide business services to him/her or (give name of company). I further confirm that:
(a) I am not aware that he/she has been declared bankrupt in any part of the world or that he /she has a criminal record in any part of the world, and
(b) I am not aware that (give name of company) has been declared insolvent or unable to meet its obligations in any part of the world.
In my opinion Mr/Mrs ……………………………… would not enter into any transaction which he/she was unable to complete. I also believe that he/she has legitimate personal funds and that all funds received from him/her or (give name of company) should be bona fide.
Yours truly,
Name and
(Professional capacity)”
Documents for establishing a trust on Cyprus
These are almost identical to the documents that are required when establishing a company. The activities of the trust must be described and every person who is involved – whether founder, protector or beneficiaries – must be identified in the same way as when establishing a company on Cyprus. If the founder, protector or beneficiary is a physical person, the person must send in:
- Bank certified copy of passport
- Bank certified declaration of the person’s private address
- Introduction letter from the person’s bank
- Introduction letter from the accountant/lawyer/service provider
- CV in English
If the founder, protector or beneficiary is a company, authorized translations of the following documents must be sent in:
- Deed of foundation
- Certificate of registration
- Official list over managers and those authorized to sign
- List of present shareholders
- Certified copy of passports for all managers in the company
- Certified copy of passports for all persons who are shareholders in the company
- For company shareholders, authorized translated company documents must be sent in