Very favourable tax regime: The corporate tax rate of 12.5% ,one of the lowest in Europe, and the effective network of double taxation treaties, with more than 50 treaties, make Cyprus ideal for setting up a company.
Reputation: Cyprus can be the ideal gateway to enjoy the privileges and international image of having an EU company. Further, Cyprus is a reputable international business centre with a strategic location between three continents.
Flexibility: A cyprus company will give you 'international wings', since Cyprus is one of the most flexible countries in the world regarding business matters. This flexibility makes it easy for you to arrange the incorporation of your company, and offers abundance of choices in regards to foreign transactions.
How do I register my company in Cyprus? A Step by step Guide
Approval of company's name
The very first step we have to take, in order to register a company in Cyprus, is to reserve a company name. The name of your choice needs to meet certain criteria set by the Registrar of Companies in order to obtain the Registrar of Companies' approval. For instance, a basic requirement is that the name of the company may not be the same as, or too similar to, a name that is already used by another company. Therefore, before submitting the relevant application for approval of the proposed company name, we would conduct a search to find out whether there is already a registered company with the same, or a similar, name.
Within the next few days from the day of the submission of the relevant form, the Registrar of Companies will inform us whether the proposed name has been approved. In the (unlikely) event of a rejection, an explanation would be given, and we would need to apply for another name.
Preparation before the application for incorporation
In order to proceed with the incorporation of a limited liability company, which constitutes the most common type of cyprus company, you must first decide upon:
- the address of the registered office
The company needs to maintain a registered office in the Republic of Cyprus. At the registered office of the company is where, all notifications and notices are sent (e.g. letters from the Registrar of Companies, writs, orders etc), and where the various company's registers (e.g. members, directors, etc.) and other documents are maintained.
- the directors and the secretary
A private company needs to have at least one director. Further, the company must also have a secretary.
In case that a private company has one member and one director, the director may also act as a secretary.
The majority of directors need to reside in Cyprus, in order to preserve the control and management of company in Cyprus for tax purposes. Therefore, we may appoint a person/persons from our team as nominee director(s). We also offer nominee secretary services upon request.
- the members and the share capital
A private limited liability company needs to have at least one member and not more than fifty members. The amount of nominal share capital which the company intends to register with, needs to be stated on the company's memorandum of association.
The nominal share capital may consist of issued and non-issued share capital. The issued share capital reflects the amount of the nominal capital which the company has issued to its shareholders, while the non-issued share capital corresponds to the amount of the share capital which has not yet been issued.
A minimum nominal share capital of EURO 1000 divided into 1000 shares of nominal value EURO 1 each is commonly registered. Even though this is a common practice, it is entirely up to you to decide upon the amount of share capital, how it is to be divided, and further, the type of currency.
Our firm offers trustee services for the benefit of the ultimate beneficial owners and drafts the relevant trust deeds. However, according to the anti-money laundering legislation, it is company's responsibility to keep record of the ultimate beneficial owner(s) with the Registrar of Companies and update the relevant register annually.
- the Memorandum and Articles of Association of the company
The Memorandum defines the objectives of the company (what activities the company can engage in), while the Articles of Association defines the regulations and procedures for the company's operation (how the company functions).
The Memorandum needs to contain:
- Company's name,
- Company's objectives,
- A statement that the liability of its members is limited,
- The amount of share capital with which the company intends to register and its division in shares,
- The names and addresses of the members, their signature, and the number of shares they receive.
- Signature by a witness and the lawyer who prepared the memorandum of association.
Applying for Incorporation
Following the approval of the proposed name, the company name will be reserved for six months. Within this timeframe, we need to proceed with the submission of the application for the incorporation.
At this stage, we essentially need to file a number of documents with the Registrar of Companies, including:
- the Memorandum and Articles of Association,
- a statutory declaration (form HE1) signed and sworn before the court by the entrusted lawyer,
- the solemn declaration of witness of signatures,
- a certified translation of the memorandum and articles of association in a language other than Greek, in case you wish to create a file of translations for obtaining certified copies of the memorandum and articles of association in a foreign language,
- Registered office address notification (form HE2)
- First directors and secretary notification (form HE3)
In addition, upon request of the client, we may request from the Registrar of Companies, copies of the Memorandum and Articles of Association, as well as a set of the most basic corporate certificates, such as certificate of Incorporation, shareholders certificate, certificate of registered office address, and certificate of director and secretary. Even though these are the certificates most frequently requested by clients, there is a list of other certificates that we can obtain as well, upon request.
In case that the certificates will be sent abroad to the beneficial owner of the company, they will be first certified by Apostille.
Requirements after Cyprus Company Registration
After your company has been successfully incorporated, the company needs to obtain a tax identification number (TIN), necessary for all tax-related transactions in Cyprus.
Moreover, you will need a Social Insurance Number in case you wish to employ staff in Cyprus.
Finally, we may assist you in opening a bank account in Cyprus and/or abroad necessary to carry out business transactions and pay taxes.
Following the incorporation of your company and the above-mentioned arrangements, your company is ready to start its operation.
Apart from assisting with the procedure of cyprus company formation, our firm provides clients with high quality services that relate to the responsibilities of your company and its general operation, such as:
- Filing Annual Returns and Financial Statements
- Updating the Ultimate Beneficial Owner Register
- Managing corporate changes (e.g. alteration of officers and/or their particulars)
- Executing transfers of shares
- Accounting/auditing services through our external associate accountants
- Drafting documents upon request such as Powers of Attorney
- Executing shareholders agreements and corporate governance issues
Documents required by our firm to register your company in Cyprus
Our law firm applies the 'Know your client' policy, in order to comply with the anti-money laundering legislation. Therefore, we will require the following documents from your side, before being able to assist you with the process of setting up a company in Cyprus:
- Copy of passport of the ultimate beneficial owner/owners of the company.
- Recent utility bill on the name/names of the ultimate beneficial owner/owners of the company.
- Bank reference for the ultimate beneficial owner/owners of the company.
- Curriculum Vitae of the ultimate beneficial owner/owners of the company.
Additional information may be requested depending on the special circumstances of each situation.
Finally, in case you choose to appoint individuals of your choice as director(s) and/or secretary, we will need the above documents for due diligence purposes for them as well.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.