Cypriot Offshore Bank Accounts Ordered Closed

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Cypriot banks are closing offshore companies bank accounts

Local Cypriot Banks have been ordered by Central Bank of Cyprus to close accounts of offshore company formations. The Central Bank of Cyprus has informed financial institutions about the need to close offshore companies’ accounts starting on June 4.

Why is this happening?

A new phase in the combat against money laundering in Cyprus began after the visit of the OFAC delegation (sanction unit of the USA Treasury department) headed by Marshall Billingsley, deputy secretary of the treasury department for combating terrorism, on may 21.
Shortly after, institutions of lawyers and accountants dispatched out letters to their members declaring the recently revealed order
The reason for the new initiative deals with the following:

– making stronger management over the activities of its clients,
– the application of guidelines for combating money-laundering acquired through criminal means and financing of terrorist acts,
– avoidance of collaborating with people and legal entities from the united states sanctions lists.

The regulator notes that the initiative geared towards banks will mostly serve businesses “present in Cyprus” that hold physical addresses. Aside from the entire bundle of documents, businesses will be forced to keep accounting records and provide them to the bank, have assets such as investments in shares or alternative securities, and be connected with a Cypriot business enterprise that has accounts with the chosen bank.

What can you do?

Now, to open a bank account within the banks of Cyprus, it’ll be important to conform to new requirements, overseas teams, and people, RBC reports. Banks will open debts normally to agencies with “presence in Cyprus” (with merely operating places of work).

The bank has the right to require:
– passport copies, tax quantity, detailed cv.
– references to public resources relating to activities and biographies.
– banking and professional letters of recommendation.
– statements for the charge of personal profits tax on the area of tax residence.
– account statements (non-public and corporate) in several banks.
– other documentary proof of the foundation of funds/supply of wealth or profits.

On current accounts, Cypriot banks will conduct an analysis of all reports every six months. The establishment should apprehend the essence of the organization’s endeavors and also the industrial feasibleness of its transactions.

International agencies are going to only have profiles created assuming that they comply with the following criteria:

– the enterprise will be required to keep its monetary statements and provide it to the bank.
– the organization needs to have property, as assets the financial organization takes investments in shares, shares, different securities. Lengthy-term or quick-term agreements for the availability of offerings/change/supply of the product or merchandise cash owed receivable/payable aren’t belongings.
– the agency ought to be attached with a Cypriot company

With all this knowledge, our team wishes to assist you to make the correct options with regard to your company structuring. Get in touch with us today to book a free consultation.