Establishing a business

 

 

It should be noted that there are the following forms in order to establish a business entity in Cyprus.

 

• Cyprus Company

• Branch

THE CYPRUS COMPANY 

 

A Cyprus company consists mainly of:

 

• The Board of Directors and

• The General Meeting

 

Reference must also be made to the company secretary who is the administrative officer of the company having administrative functions.

 

 

Companies under Cyprus Companies Law:

 

• Companies of limited liability by guarantee

• Companies of limited liability with shares

 

The above can be private companies or public companies. 

 

The main attributes of a private limited company under Cyprus Companies Law are:

 

• The restriction in the transfer of shares

• The number of shareholders must not exceed 50

• It is not possible to make an invitation to the public to buy shares

 

There are two company documents that are important:

 

• The Memorandum of Association and

• The Articles of Association

 

HOW TO REGISTER A COMPANY 

According to Cyprus tax law, a Cyprus company must be managed and controlled from Cyprus in order to be considered as tax resident in Cyprus and enjoy the advantages of our competitive tax system. Thus, it is necessary that the majority of the Board of Directors to stay and work in Cyprus. For foreign clients this is achieved by appointing two nominee directors in the Board of Directors and management and control is fully evidenced by supporting minutes and other documentation depending on the facts of each case.  

 

 

The typical obligations of the Cyprus company are: 

 

• The filing of the annual return. This is a report that has to be filed every year at the Registrar of Companies and it outlines any changes
   that took place on the shareholding, directors, secretary of the company

• VAT Reports. If the company is registered with the VAT then VAT returns must be filed every quarter

• Accounts. Audited accounts must be prepared and filed with the Registrar of Companies and the Tax Office revenue every year

 

For further information: 

 

 

International Business entities established in Cyprus enjoy significant advantages. It should be noted that Resident companies pay a competitive corporate tax (a uniform 12,5% corporate tax rate). 

 

 

Basically, there are four kinds of fees involved during the setup of a Cyprus company: 

• The registration or setup fee

• The annual fee for nominee services

• The accounting/auditing fee

• The annual expenses payable to the Registrar of Companies. 

 

1. Annual Fee

 

For annual fees there are four types of services:

• registered office

• secretary

• nominee director and

• nominee shareholder 

 

2. Accounting and VAT

 

Accounting and auditing fees vary. They depend on two factors: 

• On the number of transactions the company executes each month/year

• It depends on the accountant

 

A Cyprus company, if it will be tax resident in Cyprus, needs to register at the Inland Revenue and get a tax number. From then on it has to file audited accounts every year and pay tax if appropriate. 

 

3. Annual expenses

 

A company has to file each year an annual return (annual report) at the Registrar of Companies. The stamp cost is around € 100. 

 

 

The steps to register a company in Cyprus are as follows: 

• Choose a company name/ application and approval of the name

• Specify the purpose(s) of the company

• File an application to register a company

 

In addition the following rules apply by the Registrar of Companies when examining company names: 

• the name is already on the register

• it is offensive

• its use would be a criminal offence

• it is deceptive

• it implies that there is a relationship with the government

• only in special cases and upon certain conditions, names that include the following words will be approved: NATIONAL, INTERNATIONAL, 
   DEMOCRATIC, EUROPEAN UNION, EUROPE, EURO

• the name should not include the words COOPERATIVE, MUNICIPAL, PRIVILEGED or RECOGNISED

• names that include the words will be approved in exceptional cases: BANK, BANKING, INVESTMENT, TRUST, INSURANCE, BROKER

• currently the Registrar of Companies needs around 3 working days to examine and approve/reject a company name     

 

These information and/or publications are used for general guidance on matters of interest only. It should be noted that they do not constitute any professional advice. No one should act upon the information contained in these information/ publications without obtaining any professional advice.  

 

No representation or warranty (express or implied) is given as to the accuracy or completeness of these information/ publications, and, to the extent permitted by law, Cyprus Trade Centre, The Republic of Cyprus, its employees do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in these information/ publications or for any decision based on it.