European AML & KYC Procedures in Cyprus

European regulations require banks, law firms and real estate agencies to verify the client’s identity, the origin of funds, and the legitimacy of capital.

The goal is to protect all parties involved in the transaction and eliminate financial risks.

Short Summary of KYC Elements

KYC is a standard procedure for all buyers, regardless of their country of residence. Every client is expected to provide a basic documentation package:

• passport + proof of address
• bank statements
• documents confirming the origin of funds
• explanation of accumulated wealth

What Is Important for Buyers from Non-EU (Third) Countries?

Clients from countries such as the UK (post-Brexit), Russia, Ukraine, Israel, Lebanon, UAE, China, India and others undergo deeper checks. It is important that:

• transfers are made only from the buyer’s personal bank account
• the origin of funds for the purchase is properly documented
• transfers from certain countries may require additional checks due to sanctions or banking-system risks
• cash payments are prohibited in the EU

So how do you ensure a safe, efficient, and timely transaction?

Below are practical recommendations from banking specialists in Cyprus.

1. Prepare KYC documents in advance

The most common reason for delays is missing documentation.

Recommendations:

• Give the client a full KYC document list before their trip to Cyprus

• They will need a passport, proof of address, and 3–6 months of bank statements

• Request source-of-funds documents early: property sale agreements, dividend statements, gift deeds, business income proofs

Effect: the compliance review is shortened from 2–4 weeks to just a few days.

2. Use an escrow account

Escrow is a protected form of settlement: funds are held in a dedicated bank account and are released to the seller only after all documents are verified.

Benefits:

— security for the buyer

— assurance for the seller

— confidence for the bank

For third-country clients, escrow is the optimal solution, allowing the deal to progress even before all checks are fully completed.

3. Legal due diligence + Housebook verification

For full protection, two systems should work together:

✔ A lawyer checks:

• title and land history
• absence of encumbrances
• legality of construction

✔ Housebook provides:

• updated prices and unit statuses
• correct VAT rate
• verified developer documents
• accurate plans and measurements

Effect: fewer errors, full transparency for both the bank and the client.

4. Transfers must come only from the buyer’s personal bank account

This is a fundamental AML principle.

A property purchase cannot be paid from:

— a friend’s account

— a business partner’s account

— a corporate account without supporting documents

— a family member’s account without a notarized gift deed

If family funds are involved, a gift deed and source-of-funds documentation for both sides are required.

5. Avoid multiple small transfers

Each small transaction triggers an additional SOF (Source of Funds) review.

It is better to make one properly documented transfer.

Ideal scenario: one bank transfer + full KYC package + complete SOF documentation.

6. Explain the realistic processing timeline

Managing client expectations is crucial.

• For EU citizens, the review typically takes 1–3 days
• For third-country citizens — 3–14 days

If documents are prepared in advance, timelines may be cut in half.

7. Ensure proper communication with the bank

The agent should assist the client by:

— recommending a suitable bank and an experienced lawyer

— explaining which documents will be required

— warning about possible compliance questions

Transparency significantly speeds up KYC.

A safe transaction is the result of procedure and structure, not luck

AML and KYC procedures are not obstacles. They are protective mechanisms.

For third-country clients, these mechanisms are especially important, as they make the transaction:

• transparent
• predictable
• compliant
• safe
• trust-based

When the agent follows these recommendations and the client prepares documents in advance, the transaction proceeds smoothly, without delays or stress.