REGISTRATION OF A CYPRUS COMPANY

Cyprus is one of the most popular jurisdictions for registering companies, mainly due to its favourable taxation system.

Cyprus is one of the most popular jurisdictions for registering companies, mainly due to its favourable taxation system.

Many companies choose to operate and manage their business from Cyprus taking advantage of the favourable Cyprus corporate tax, being 12.5% (one of the lowest in Europe) and the wide network of Double Tax Treaties.

In addition, there is no capital gains tax for the sale of shares (excluding the case where the company owns land in Cyprus) and there is no dividends’ tax on non-Cyprus domiciled and non-Cyprus tax resident shareholders. Besides, Cyprus, being a Member State of the European Union (EU) complies completely with the EU legislation and enjoys the benefits of uniform laws and practices.

The procedure for registering a company in Cyprus is simple, straightforward and fast, even for foreign clients, as they don’t need to travel to Cyprus in order to have their company set up.

According to Cyprus Law, only licensed Cyprus lawyers are allowed to prepare and sign the company registration documents, therefore, the company incorporation procedure in Cyprus, starts with the appointment of a licensed lawyer who will undertake the preparation, signing and submission of the necessary incorporation documents.

The incorporation procedure of a Cyprus company, provided that the company name has been approved and that all necessary information/documentation is made available, can be completed within 5-7 business days.

The following general information, contained in this note, outlines the requirements and main characteristics in relation to the incorporation of a Cyprus private limited liability company.

 

Steps & Information required for registering a Cyprus Company

  • Choosing a company name:

The first step of the procedure is the approval of the name of the company by the Registrar of Companies (the ‘Registrar’) which will take approximately 3-5 business days.  Following the name approval, the lawyer may proceed with the submission of the necessary documentation to the Registrar for the incorporation of the company. It is important to note that the name of the company can be changed at any time after the registration of the Company.

  • Objects/Activities of the company:

Each Cyprus company must have a memorandum of association which will lay down the objects/activities of the company. Usually, companies are incorporated using a standard form of memorandum of association which provides for a wide range of business activities. In case the Company is intended to do a particular business, the Memorandum shall be drafted in such a way so as to specifically cover that type of business. The objects of the Company, and consequently its memorandum of association, can be amended any time following the registration of the company, through a court order.

  • Share capital:

For private companies there is no minimum/maximum share capital requirement, although the standard practice is that companies are usually incorporated with a minimum share capital of €1.000 divided into 1.000 shares of €1 each.

  • Shareholders and their percentages/number of shares:

A private limited liability company must have at least one shareholder and a maximum of 50 shareholders.  There is no restriction as to the nationality of the shareholders and both physical and legal persons can be shareholders of a Cyprus company.

  • Articles of Association:

Each company must have articles of association which provide the rules under which the particular company will be managed and run. Companies usually use a standard form of articles of association which are drafted in such a way as to enable the company to operate effectively in accordance with Cyprus company law. If the client wishes to incorporate specific rules and provisions as to the management and running of the particular Company, a lawyer can assist in drafting the articles of association in such a specific way so that the needs of the client are met. Articles of Association can be amended any time following the incorporation of a Company, without the need of a court order.

  • Directors:

Cyprus companies are managed and controlled by a board of directors, meaning that, it is the directors who have the power to take decisions on behalf of the Company and therefore bind the Company. A Cyprus private company must have at least one director. There is no restriction as to the nationality of the directors and both physical and legal persons can be directors of a Cyprus company.

  • Secretary and Registered Office address:

Every Cyprus company must have a secretary and a registered office address in Cyprus.

 

Statutory and Tax obligations of a Cyprus Company

Every Cyprus company is required to:

  • Be registered with the Tax Department and obtain a Tax Identification Number;
  • Prepare financial statements (FS) and have them audited by licensed independent auditor, on an annual basis;
  • Submit to the Tax Department an income tax return, on an annual basis, along with the corresponding FS;
  • Submit to the Registrar its annual return (HE32) along with the FS of the prior year; and
  • Pay annually to the Registrar, the amount of €350, as an annual government levy, by the 30th of June of each year. If a company's incorporation date is after the end of June, then the newly incorporated company is not obliged to pay the annual levy for the first year.

Cyprus Companies, depending on the nature of their activities, may be also required to be registered to the VAT and consequently file VAT returns on a quarterly basis.

11 July 2023, Cyprus

The information provided in this note is for general informational purposes only and should not be used as professional or formal legal advice.

If you are interested in the registration of a Cyprus Company, please contact us 

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