Registration of a Cyprus Company
Forming a private company limited by shares in Cyprus may offer a wide variety of advantages in conducting international business. The present memo outlines the advantages of forming a private Cyprus Company as well as some of the key characteristics, registration procedure and other useful information.
There are many different structures when forming a company but the most common is the Private Company Limited by Shares structure. Other structure options which are available when registering a company in Cyprus are the following: Public Company Limited by Shares, Limited Liability Company with Guarantee without Share Capital, Limited Liability Company with Guarantee with Share Capital, Variable Capital Investment Company, General Partnership and others.
The initial step that needs to be taken is the Company Name approval by the Cyprus Registrar of Companies. The process to approve a company name usually takes 3 working days.
The Memorandum of Association contains the objects/activities that may be undertaken by the company, its limited liability character and its authorised capital. The Articles of Association contain regulations under which a company operates internally as well as vis – a – vis third persons.
There is no legal requirement for a minimum or maximum share capital for a private Cyprus Company, although a minimum share capital of Euro 1.000 is usually recommended.
The Cyprus Company must have at least 1 registered shareholder. A shareholder has the option to appoint a nominee shareholder(s) (either Cypriot or non-Cypriots) evident in the public records.
Directors and Secretary
The Cyprus company must have at least 1 director either a natural or legal person, Cypriot or non-Cypriot. It must be noted that the directors' residency is a key factor to determine the tax residency of a Cyprus Company (management and control must be in Cyprus). A majority of Cypriot directors is usually appointed. A Cyprus Company must also have one secretary. The Secretary acts under the control and instructions of the Directors, keeps the Company's statutory registers and meetings' minutes and performs functions of a non-executive character.
A Cyprus Company must have a registered office located in Cyprus. A company may operate through the offices of their providers, lawyers or accountants if the do not establish management offices in Cyprus.
Audit and Reporting obligations
A Company registered in Cyprus, must submit annual returns with audited accounts in accordance with the IRFS to the Cypriot Tax authorities and the Cyprus Registrar of Companies.
Advantages of the Cyprus Company system:
- Simple and fast registration process with excellent professional support.
- 100% foreign ownership permitting up to 50 shareholders.
- Low registration and maintenance fees.
- Favourable taxation and more specifically low corporate tax rate 12,5% on profit.
- An extensive network of double taxation treaties with more than 60 countries including the U.K., U.S.A., China, Canada, Austria, France, India, Germany, Russia, the U.A.E. and others, providing unlimited options for international tax planning.
- Stable business environment and legal framework fully harmonised with EU Law.
- Common law legal system safeguarded by the Cypriot Constitution and the international treaties ratified by Cyprus.
- High quality of professional expertise and other services.
- Stable and secure banking system.
- Perfect location for investment into and from EU and non-Eu Countries.
Firstly, it is necessary to complete the Know – Your – Client ('KYC') review process, in line with applicable anti – money laundering laws and regulations. Information required includes full name, nationality, address, profession, passport or ID copy, curriculum vitae, incorporation documents (in case of corporate entity), source of funds and other information.
Secondly, once the company name is approved by the Cyprus Registrar of Companies then the application for the company formation with the Registrar of Companies is submitted, either online or physically. The time frame required for the registration process to be completed is 6-8 working days from the day of submission.
Our law firm E. TZIONI & ASSOCIATES LLC, may offer the following services:
- Formation of Cyprus and overseas companies.
- Fiduciary services including company administration, nominee directorship, nominee shareholder, registered office and secretarial services.
- Corporate organisation and management, compliance with all legal and tax requirements including employment law matters.
- Re-domiciliation of companies into or out of Cyprus.
- Corporate procedures such as capital increase/decrease, transfer of shares, differentiation of share rights, raise of financing etc.
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.