Learn about compliance requirements in Cyprus real estate: Anti-Money Laundering (AML), Know Your Customer (KYC), and GDPR data protection rules. Essential guide for buyers, agents, and professionals.
Compliance in Cyprus Real Estate – AML, KYC, and GDPR Guide
Compliance is the backbone of a transparent and secure property market in Cyprus. As an EU member state and international investment hub, Cyprus has implemented strict Anti-Money Laundering (AML), Know Your Customer (KYC), and General Data Protection Regulation (GDPR) standards to safeguard transactions and protect clients.
Why Compliance Matters in Cyprus Real Estate
Cyprus attracts international buyers, making it vital to maintain compliance with EU directives and local legislation. AML and KYC frameworks reduce the risk of money laundering and financial crime, while GDPR ensures the lawful processing of personal data. Failure to comply exposes buyers, lawyers, and agents to penalties and reputational damage.
AML in Cyprus Real Estate
The AML framework in Cyprus is guided by the EU’s 5th and 6th AML Directives. Real estate lawyers, developers, and agents must:
• Conduct due diligence on all buyers and sellers.
• Report suspicious transactions to MOKAS (Unit for Combating Money Laundering).
• Maintain proper records of client identification and transactions.
• Apply enhanced checks for high-value or high-risk transactions.
KYC in Real Estate Transactions
KYC procedures ensure the legitimacy of participants in a property deal. Requirements include:
• Verification of identity documents (passport, ID).
• Proof of address and financial capability.
• Verification of source of wealth and proof of funds.
• Screening for Politically Exposed Persons (PEPs).
Banks, lawyers, and notaries are often directly involved in conducting these checks.
GDPR in Cyprus Real Estate
GDPR applies to all entities processing personal data in property transactions. Obligations include:
• Identifying a lawful basis for processing data.
• Providing a privacy notice to clients.
• Ensuring secure storage and restricted access to data.
• Deleting or anonymising data after legal retention periods.
Breaches can result in significant fines imposed by the Office of the Commissioner for Personal Data Protection.
The Role of the Beneficial Ownership Register
Cyprus has introduced a Beneficial Ownership Register for companies and trusts, including those owning property. The register ensures transparency of ownership and prevents the misuse of corporate structures to conceal assets. It aligns with EU requirements for increased financial transparency.