Cyprus
Company Formation Services

Cyprus Incorporation Services

General Information

Cyprus is the third largest island in the Mediterranean after Sicily and Sardinia. Located in the north-eastern end of the Mediterranean Sea Cyprus is effectively a crossroads linking Europe, Asia and Africa. It covers an area of 9,251 sq km and lies 65 km south of Turkey, 96 km west of Syria, 385 km North of Egypt and some 980 km south-east of Athens. The capital is Nicosia. The principal topographical features of Cyprus are the two mountain ranges running along the centre and north-east of the Island, separated by a wide and fertile plain. Cyprus has a pleasant climate with dry, hot summers and mild winters.

Population

The population of Cyprus is about 802,500. Greek Cypriots form the largest ethnic community representing approximately 85%; Turkish Cypriots comprise the second largest community representing 12% and the remaining 3% representing other minorities.

Political Structure

Cyprus became an independent Republic in 1960. The political system is modelled on Western democracies in which individual rights are respected and private enterprise is given every opportunity to develop. Under its Constitution, Cyprus has a presidential system of Government. The President is the Head of State and is elected for a five-year term of office.

The executive arm of the Government is the Council of Ministers to which the President appoints members. The Ministers are responsible for the administration of all matters falling within the domain of their ministries and for the implementation of legislation. Legislative power is in the hands of the House of Representatives, which consists of 56 elected members who hold office for a period of five years. A multi-party system operates in Cyprus and the electoral system is based on proportional representation.

The legal system is based on that of the United Kingdom and all statutes regulating business matters and procedure are based on English Law. Most laws are officially translated in to English.

Iinfra-Structure and Economy

Cyprus is readily accessible by air and sea. The major port facilities are those of Limassol and Larnaca, situated along the south coast of the Island.

The economy of Cyprus is based on a free enterprise system. The Government’s role is limited to regulation, planning and the provision of public utilities. During the last fifteen years, the economy of Cyprus has demonstrated spectacular growth and its currency has enjoyed relative stability.

Language

Greek and Turkish are the official languages of Cyprus but English is widely spoken and understood, particularly in commercial and government sectors.

Currency

Euro

Type of Law

Commom Law with Civil law influences on Family and Constitutional/ Administrative Law mainly.

Main Corporate Legislation

The companies’ law in Cyprus is the Cyprus Companies Law, Cap.113, which is based on the English 1948 Companies Act. Single member companies were introduced by the Companies (Amendment) Act 2000 and other amending legislation was passed during the last decade for modernising and improvising purposes.

Cyprus Company Any Information

When wholly foreign-owned, a private company is referred to as an international business company. On 1 st January 2003 the favorable tax regime previously available to IBC’s was abolished and all companies are now taxed on the same basis.

Type of Company For International Trade and Investment

Company Limited by shares which is subdivided into:

(a) Public companies and
(b) Private companies which are also subdivided into:

i. Exempt Private Company
ii. Limited Private Company

Company Limited by guarantee

The Partnerships and Business Name Law, Chapter 116, also provides for two general types of Partnerships:

a) General Partnership
b) Limited Partnership

Procedure to Incorporate

By submission of the Memorandum and Articles of Association to the Registrar of Companies, together with an affidavit before a Court and the appropriate registration fee. The powers and objects of a Cyprus Company are contained within the Memorandum & Articles of Association and have to be specific.

Restrictions on Trading

Cannot undertake to the business of banking, insurance or the rendering of financial services to the public unless special permission is granted. Companies cannot trade with resident individuals or companies situated in Cyprus.

Language of Legislation and Corporate Documents

English and Greek

Registered Office Required

Yes, must be maintained in Cyprus

Time to Incorporate

Approximately five days, subject to name approval

Name Restrictions

Any word that the Registrar considers undesirable. Any name that is identical or similar to an existing company or sounds similar. Any name that implies illegal activity or implies royal or government patronage.

Language of Name

Names may be expressed in Greek or any language using the Latin alphabet if the Registrar is in receipt of a Greek or English translation and the name is not considered undesirable.

Names Requiring Cosent or License

The following names or their derivatives require consent or a licence:

“Asset Management” “Asset Manager”, Assurance”, “Bank”, “Banking”, “Broker (s) / Brokerage”, “Capital”, “Credit”, “Currency (ies)”, “Custodian(s)”, “Custody”, “Dealer(s)” “Dealing”, “Deposit(s)”, “Derivative (s)”, “Exchange”, “Fiduciary (ies)”, “Finance”, “Financial”, “Fund (s)”, “Future (s)”, “Insurance”, “Lending”, “Loan(s)”, “Lender(s)”, “Option(s)”, “Pension(s)”, “Portfolio”, “Reserves”, ‘Savings”, “Security(ies)”, “Stock”, “Trust”, Trustees” their foreign language equivalents or any name that the Registrar considers may have a connection with the aforementioned.

Suffixes to Denote Limited Liability

Limited or Ltd

Disclosure of Beneficial Ownsership to Government Authorities

The identity of the beneficial owners of a Cyprus Company may remain confidential if nominee shareholders are engaged to act as the shareholder on behalf of the ultimate beneficial owners. This confidentiality is maintained as long as the company and its ultimate beneficial owners are not involved in any criminal activity.

Cyprus Compliance
Key Corporate Features

General
Type of entity:	Private (Resident/Non-Resident)
Type of law:	Common
Shelf company availability:	Yes
Our time to establish a new company:	5 days
Minimum government fees (excluding taxation):	€350
Corporate taxation:	Resident Limited: 12.5% Non-Resident: 0%
Double taxation treaty access:	Yes
Share capital or equivalent
Standard currency:	Euro
Permitted currencies:	Any
Minimum paid up:	€1,000
Usual authorized:	€5,000
Minimum number:	One
Local required:	No, but advisable for purposes of tax residency
Publicly accessible records:	Yes
Location of meetings:	Anywhere, but Cyprus advisable for purposes of tax residency
Members
Minimum number:	One
Publicly accessible records:	Yes
Location of meetings:	Anywhere
Company Secretary
Required:	Yes
Local or qualified:	No, but Cyprus advisable for residency and compliance
Accounts
Requirement to prepare:	Yes
Audit requirements:	Yes
Local Auditor:	Yes
Requirement to file accounts:	Yes
Publicly accessible accounts:	No
Other
Requirement to file annual return:	Yes
Change in domicile permitted:	No

* When wholly foreign-owned, a private company is referred to as an International Business Company

Authorised and Issued Share Capital

The share capital may be expressed in Euros or in any other currency. The usual authorised share capital of a Cyprus IBC company is € 5,000 and the minimum issued capital is € 1,000.

Classes of Shares Permitted

Registered shares of par value, preference shares, redeemable preference shares and shares with no voting rights.

License Fee

Not applicable

Financial Statements Required

Amendments made in 2003 to the Companies Law as part of the EU accession process included the following changes:

Every company must prepare a full set of financial statements in accordance with International Financial Reporting Standards, and every parent company that has one or more subsidiaries, other than a company which is itself a wholly owned subsidiary, should present consolidated financial statements.

Under article 120, every company must complete an annual return within a period of 42 days from the date of its Annual General Meeting and must file immediately with the Registrar of Companies, a copy of the annual return, signed by a director and the company secretary. Under article 121, the annual return filed with the Registrar of Companies must be accompanied by the full set of financial statements.

Directors

The minimum number of directors is One. They may be natural persons or bodies corporate, be of any nationality and need not be resident in Cyprus. For establishing tax residency in Cyprus is it is advisable to use resident directors.

Company Secretary

All Cypriot companies must appoint a company secretary, who may be a natural person or body corporate. It is advisable to appoint a resident company secretary.

Shareholders

The minimum number of shareholders is one.

In Resume:

Cyprus, one of the smallest European low tax jurisdictions, is a suitable place for locating an intermediary company due to the island’s combination of tax treaties and low-tax regime. Dividends can flow through the Cyprus company totally tax free and the company can be used to take advantage of the extensive network of double tax treaties.