Incorporation in Cyprus
The type of company for international trade and investment is a private company limited by shares which is incorporated pursuant to the Companies Law, Cap. 113. There are a number of restrictions on the activities of a private company, and namely companies cannot: – undertake the business of banking, insurance or rendering of financial services to the public unless a special permission is granted.Cyprus companies must maintain a registered office address within Cyprus and must also appoint a company secretary who, for practical reasons, should be resident in Cyprus. After the name of a proposed company is approved, the Memorandum and Articles of Association of the company must be signed by subscriber(s) and for at least one share and filed with the Registrar together with the relevant forms. The procedure of company registration requires the involvement of a laywer, member of the Cyprus Bar Association. After incorporation the subscribers of the Memorandum will become members of the company. The Memorandum establishes the basic structure of the company and states its name, objectives, the amount of share capital and division thereof into shares of a fixed amount, and any other matters which affect the basic existence of the company. The Articles of Association govern relations between various members of the company. They deal with the procedures for calling meetings of shareholders, passing resolutions and transferring shares including any restrictions which may apply. A company may alter or add to its Memorandum and Articles of association by passing a special resolution.
All Cypriot companies are required to maintain proper accounting books and records and prepare audited financial statements in accordance with IFRS (except the dormant companies).Despite of the statutory audit exception granted by the Company Law to small companies (certain criteria exist), the Tax Legislation gives exception only for the dormant companies. Thus the statutory audit is required by all companies. The audited financial statements form the basis for the tax computations and for the preparation of the corporate income tax return which is required by the tax authorities to be certified and submitted by a registered auditor or a professional tax advisorThe financial statements must be submitted together with an Annual Return including details of details the share capital, shareholders, directors and secretary to the Registrar of Companies.The only fixed taxation for all companies is the Levy of €350 which is payable on annual basis to the Registrar of Companies. Additional compliance requirements of the Cyprus Tax Legislation, other administration issues as well as possible tax liabilities are outlined in the relevant taxation sections.
The following applies in respect of the Cyprus Private Limited Liability Company:
A. Corporate Information
Shares and Corporate Governance
Minimum number of directors : One
Nationality requirements for directors : None
Corporate directors permitted : Yes
Minimum number of shareholders : One
Maximum number of shareholders : Fifty
Nationality restrictions on shareholders : None
Company secretary required : Yes
Registered office: Yes, in Cyprus
Corporate Company Secretary permitted: Yes
Minimum authorized : €1
Minimum paid up share capital : €1
Capital duty on issued share capital : 0.6% of the nominal value ofshares issued
Audited accounts: Required for tax purposes
Public Disclosure (with Registrar of Companies)
Directors’ Names : Yes
Shareholders’ Names : Only the registered shareholder is disclosed(Note : Where trustee shareholders are used, details of thebeneficiary are not disclosed to Cyprus government authorities).
B. Legal forms
Public and Private Companies, limited by shares
Companies limited by guarantee
Limited and general partnerships
C. Legal system
English Common Law (Cyprus Company Law, Chapter 113, based on the English Companies Act of 1948)
D. Government Charges and Fees
Annual Levy : € 350
Companies Registry Initial Registration Fee : Flat fee of EUR 102 plus capital duty of 0.6% of the nominal value of the authorized share capital (usually minimized by using low issued capital and high share premium).
E. Formation Procedures for a Cypriot Private Limited
Company Name : Name checking can be done online, but formal approval is required before a name can be used.
Shelf Companies : Commonly used and immediately available.
Formation of New Companies : Memorandum and Articles of Association in Greek are drafted by a Cypriot lawyer, signed by one or more subscribers in duplicate, submitted to the Registrar of Companies together with an English translation.
Time span for forming New Companies : 3 working days.