Cyprus Company Law
Set out below are the requirements for registering Cyprus Companies and other legal entities, the detailed procedures to be followed for this purpose, reporting requirements, day-to-day management, and administration issues and other relevant information.
For most sectors, there are no restrictions applicable to direct investments in Cyprus or investments via Cyprus by natural or legal persons from EU Member States or third countries. Also, there are no longer any special or offshore regimes in Cyprus.
This means that Cyprus Entities, whether beneficially owned by foreign nationals or local persons, can engage immediately into either local or international activities without restrictions or differentiation or the need for any special permission.
Businesses can either:
- Establish their own offices immediately without any special permit being needed to that effect (& with additional use of our support services) or
- Rely solely on our recommended firms (provision of registered office, agents & contract administration services).
The full text of the relevant Companies Law can be downloaded here:
|Cyprus Companies Law - uploaded April 2009|
|Insurance (Companies) Law: 1984 to 1990|
|Partnerships & Business Name Law|
|Insurance Companies Regulations of 1990|
If you have difficulty in downloading the Laws, please contact us. We will send them to you.
(updated Feb’ 06)
Foreign investors may establish any of the following business entities in Cyprus:
- Limited company incorporated in Cyprus (most popular)
- Branch of a company incorporated overseas
- An International Trust (formation details on request)
The procedure for the incorporation of a Cyprus Legal Entity can be completed within a maximum period of two weeks at the most, and enables the legal entity to start business forthwith.
The company name name must be officially approved by the Registrar of Companies. On applying to the Registrar for the approval of a name, it is recommended that two or three possible names ending with the word "limited" be submitted as this may avoid unnecessary delays. Applicants should however, bear in mind that a name is not likely to be approved if:
it is similar to the name of an existing company
it is considered misleading or confusing
it implies links with royalty
it includes the word "Imperial", "National", and "Corporation, Commonwealth " or Co-operative.
Where a subsidiary company proposes to adopt the name of its parent company, the latter must furnish its written consent for the use of its name. Once the approval of the Central Bank has been obtained, the next step is the registration of the company.
For a company to be registered, the following documents and information must be filed with the Registrar of Companies:
(a) The Memorandum and Articles of Association. The Memorandum must state, among other things, the following:
The name of the company with "Limited" as the last word
The situation of the registered office
The objects of the company, which it is advisable that they should be as wide as possible so as to enable the company to engage in any kind of business or activity, without this being "ultra vires" (beyond the powers of) the company and, therefore voided.
A statement that the liability of the members is limited by shares or by guarantee, when applicable.
The amount of the share capital and details of the shares authorized to be issued, and
The subscribers to the memorandum together with the number of shares for which they have subscribed.
(b) The Articles of Association which generally govern the company’s internal procedures and functions. The articles contain rules governing the internal management of the company and regulating the rights of its members among themselves.
The articles may be altered or added to by means of a special resolution, which requires a majority vote of over 75 per cent of the members. The articles deal with matters such as:
General meetings of the company
Voting rights of members
Transfer of shares
Appointment and powers of directors
Accounts & Audit
Specimen memorandum and articles of association, which have been prepared after careful study by lawyers can be made available, but care should be taken that the first few main objects’ clauses are tailored to the specific circumstances and the main business objects of the company.
(c) A list of the directors and the secretary’s name and details. A minimum of one director is required, but there is no maximum. Although there is no necessity to have local directors, this is advisable especially where the provisions of a double tax treaty are going to be utilized; and it is important to show that the company is effectively managed and controlled from Cyprus (tax resident in Cyprus) and that all company decisions are taken in Cyprus.
Also, for practical reasons, it is recommended that the Secretary is a Cyprus resident. Directors can also act as Secretaries, but a sole Director cannot act as a Company Secretary, except only in the case of a "one shareholder - one director - one secretary company" when one person can indeed act in all three aforementioned capacities.
(d) The address of the company’s registered office, which will be the place where all official notices will be served.
(e) A declaration or affidavit from a lawyer confirming that all formalities provided by The Companies’ Law have been complied with in relation to the incorporation in question.
Once all the required documents have been lodged with the Registrar of Companies and he has satisfied himself that they are in order, he will issue a Certificate of Incorporation. The formation and registration procedures, including printing of all official stationery and opening the necessary bank accounts, can usually be completed within a period of two weeks, whereupon the company can start operating immediately.
Period Needed for Registering a Company
The formation and registration procedures, including various administrative needs such as printing of the company’s letterheads; opening of statutory books and the opening of the required bank accounts, up to the time the certificate of incorporation is issued, can normally be completed within a period of two weeks.
Certificate of Incorporation
Once the Registrar of Companies has been satisfied that the documents lodged - in relation to a proposed company - are in order, a certificate of incorporation will be issued, whereupon the company becomes a corporate body, having an independent legal existence quite distinct from its shareholders. Each company’s file is available for public inspection at the office of The Registrar of Companies (details of directors, company secretary, registered office, charges, shareholders [see anonymity below], annual returns - required to be submitted once a year accompanied by the financial statements - Memorandum & Articles of Incorporation etc.).
Share Capital Requirements
There is no legal requirement as to the minimum or maximum share capital of the company. However, we recommend that the authorized share capital should be at least C₤5.000 (or approximately €8.750), which may conveniently be divided into 5.000 shares of C₤1 each. Not all of these shares have to be subscribed for.
Shares cannot be issued to the bearer. Also, there is a special kind - classes of shares with preferential rights or not may be issued.
Shareholders - Anonymity of Beneficial Owners
The liability of shareholders is limited to the nominal value of their share participation. Under Cypriot law, every company, limited by shares, must have at least one shareholder (and maximum fifty for private companies). If anonymity is required, the shares may be held by authorized trustee companies in trust for the beneficial owners without public disclosure of the owner’s identity. In this case, typically a Declaration of Trust, a pre-signed blank Instrument of Transfer and the Share Certificates are issued and certified at The Ministry of Foreign Affairs for authenticity and delivered to the beneficiaries.
The following information is required for each shareholder:
- Full name
- Residential and business address
- Date of birth
- Copies of passport or id if EU Nationals
- For corporate shareholders, copies of the statutory documents and the most recent financial statements.
The minimum number of directors is one without maximum number stipulated by the law. Directors may be local or foreign, individuals or legal persons and alternate Directors may be appointed. Meetings of the board of directors, as well as shareholder meetings, can be held in Cyprus or abroad.
Subject to certain statutory disqualification and restrictions, the manner of appointment of directors is laid down in the articles of association. Whatever these may provide, the ultimate control of the directors’ appointment and removal, vests with the members of the company.
The articles of association may, in certain cases, name the first directors of the company, who thus become directors from the date of incorporation. Alternatively, and more commonly, the articles may provide that the names of the first directors be determined by the subscribers to the memorandum - who in fact are the first members. An appropriate resolution signed by the subscribers is required and the persons named by the subscribers become directors on the date this resolution is signed.
From a tax planning point of view, it is usually important that the company is managed and controlled in Cyprus and, accordingly, it is recommended that the majority of the directors appointed are Cyprus residents. It is sometimes desirable that non- Cypriot resident directors are also appointed, but it is advisable that the number of these is always below the minimum number necessary to constitute a quorum. The quorum necessary is normally stated in the articles of association of the company. With regard to the appointment of directors the following particulars are required:
- Full name
- Residential and business address
- Date of birth
- Copies of passport or id if EU nationals
- Other directorships in Cypriot companies
- Corporate documents
It is advisable to ensure that upon the incorporation of the company its beneficial owners or other appropriate officials are provided with copies of all corporate documents, properly legalized and translated where appropriate, from Greek into English or any other language.
Such corporate documents normally comprise:
- Certificate of incorporation issued by The Registrar of Companies.
- Memorandum and articles of association – official copy certified by The Registrar of Companies.
- Address of the company’s registered office issued by The Registrar of Companies.
- The list of directors, secretary and shareholders issued by The Registrar of Companies.
- A Declaration of Trust, a pre-signed blank Instrument of Transfer and the Share Certificates certified at The Ministry of Foreign Affairs for authenticity.
- Statutory and other necessary minutes of the meetings of the directors and shareholders letterheads, invoices and other company stationery.
- Any other documents pertaining to the company’s activities up to the date of its establishment.
- Company Seal.
Stamp duty is payable on the registration of a company and its level depends on the authorized share capital of the company (= 60 CYP + 0.6% of Authorized share capital).
Appointment of Secretary
The Law requires the appointment of a Secretary. The Secretary is appointed by the directors and the articles of association should normally contain an appropriate provision to this effect. For practical purposes, a body corporate (i.e. a company) may be appointed secretary.
Every company must have a registered office from the day it commences business or from the fourteenth day after its incorporation, whichever is earlier. The registered office is the place where writs, summonses, notices, orders and other official documents can be served upon a company. The registered office is usually the place where the company’s Register of Members is kept, unless the company informs the Registrar of Companies of another place.
Bankers, Currency and Signatories
The company may open bank accounts with any bank in Cyprus or worldwide, in most of the main currencies and have money transfers effected without foreign exchange restrictions. Bank signatories can be provided locally, if necessary.
Day-to-day Management of the Company
Day-to-day activities of any company can be dealt with such as bank account monitoring, processing of bank transfers, payroll preparation, invoicing, preparation and review of agreements, book-keeping, preparation of management reports and statutory financial statements, company secretarial and administration, tax and financial advice and other accounting and business administration.
Under the Companies Law, Chapter 113, foreign companies may register a branch in Cyprus. The registration procedure is again essentially the same as for companies. However, as an additional requirement, every overseas company wishing to establish a branch in Cyprus must file with the Registrar of companies, within one month of establishment the following documents:
- Certified copy of the Memorandum and Articles of Association, or the charter or other instrument defining the constitution of the company.
- Particulars of directors and secretary of the company.
- Name and address of at least one person resident in Cyprus who is authorised to accept service of notices on behalf of the company.
With regard to the certification of the above documents, experience has shown that the documents must be legalized and "apostilled" in the country of origin by a notary public. Alternatively, legalization is required both by a notary public and the Consul of the Republic of Cyprus in that country.
In the case of international business companies and partnerships, it is advisable that the manager of the branch and the overseas company are provided - upon the registration of the branch - with a full set of documents, properly legalized and translated, where appropriate, into English or any other language.
In the case of a branch such documents normally comprise:
- Certificate of registration
- The charter of the overseas company or other instrument defining its constitution
- List of directors and name of the person authorized to accept notices
- Letter headings, invoices and other branch stationery
- Any other information and documentation pertaining to the activities of the branch to the date of its establishment.
This form of legal entity is less popular for international operations, although in some cases it may have certain tax advantages and uses, especially for American interests.
Partnerships are governed by the Partnership and Business Names Law, Chapter 116, which is similar to the equivalent English Law.
The procedures for registration have been designed to make this process as simple as possible and results from the submission of the required return, which must be written in Greek and must set out "inter alia", as well the following information:
- The name of the partnership
- The objects of the partnership
- The proposed duration of the partnership
- The names and addresses of contemplated partners
- The extent to which partners are authorised to bind the partnership
When a Non- EU resident partner intends to work in Cyprus, he is required to apply to the Department of Immigration for a work permit. This must be deposited with the Registrar before registration. Unregistered partnerships are not recognized by law and may be subject to penalties. After registration, the Registrar must be informed of any subsequent changes in the constitution of the partnership.
In Cyprus a distinction is drawn between two types of partnerships, namely general partnerships and limited partnerships. In general partnerships, all partners have unlimited liability. In limited partnerships some of the partners have unlimited liability while the liability of the others is limited to the extent to which they have contributed to partnership capital.
The procedures for the formation of a partnership are relatively straightforward and consequently the registration can be done quickly. All formalities, including the opening of bank accounts, printing of stationery and finalization of other miscellaneous matters, can usually be completed within one week. The Registrar of Companies will ensure that the required Certificate of Registration is issued without delay.
Partnership profits are taxable in the hands of the partners or the partnership (in Cyprus for Cypriot tax-resident partners).
It is advisable to ensure that the partners are provided with full partnership documents upon the registration of the partnership. These documents should be properly legalized and translated - where appropriate - from Greek into English or any other language.
These documents normally comprise:
- Certificate of registration
- List of partners and their authority to bind the partnership
- Letterheads, invoices and other partnership stationery
- Any other information and documentation pertaining to the partnership’s activities to the date of its establishment.
All Cypriot Companies, whether local or international, are required to maintain accurate books of accounts, which should reflect the true and correct position of their affairs, as well as give sufficient clarification of their activities.
In particular, correct and proper records should be kept to reflect:
- All monies received and disbursed, together with details of the related transactions.
- All sales and purchases of stock by the company.
- All company assets and liabilities.
In addition the Cypriot Company Law, which is closely modelled on its English counterpart, requires that company accounts must include the following:
- A directors’ report, which should accompany the balance sheet and be submitted to the shareholders’ annual general meeting.
- An auditor’s report containing certain prescribed statutory information, unless the company is exempt from this requirement (small companies).
- Full financial statements as prescribed by IFRS (International Financial Reporting Standards) and Consolidated Financial Statements in the case of parent companies (unless specifically exempted in some cases).
However, for Income tax purposes (s.38 of The Income Tax Law) full financial statements that are audited or certified by officially authorized auditors or accountants and a declaration on the Income Tax Return - which the return agrees to the audited financial statements-, are required. So, in effect, audited financial statements and an Income Tax Return are required for all companies, even companies with no taxable income and/or dormant companies.
Furthermore, all companies with share capital are required to submit an Annual Return to the Registrar of Companies.
The Annual Return must be accompanied by the audited financial statements of the company, adopting the IFRSs translated into the Greek language.
Cyprus- Registered Branches of foreign companies are not legally bound to compile full separate branch accounts but, when taxed on the island, are obliged to do so for income tax purposes.
They also have to submit accounts of the main company, translated into Greek, to the Registrar of Companies. Partnerships are exempt from any requirement to prepare audited accounts, but they are legally bound to keep proper books of account which must be available for scrutiny by individual partners.
The expatriate directors, executives and managers of all international business entities are able to obtain residence and work permits fairly easily and without delay (subject to conditions that have to be satisfied, minimum salary levels etc.) Provided that no suitably qualified Cypriots are available, administrative, clerical and non-executive expatriate employees may also secure such permits without difficulty.
The residence and work permits are usually received within one month of application. Thereafter the expatriate employee and each member of his family, holding a separate passport, should report to their local police immigration department where they will each be issued with an Alien Registration Certificate.
Residence and work permits are usually issued for an initial period of two years but will be readily extended for additional three-year periods subject to the general conduct of the business of the company.
Hospitality is a way of life in Cyprus. This coupled with the fact that Cyprus enjoys perhaps the best type of Mediterranean climate with about 330 warm and sunny days a year, make Cyprus an ideal location to visit and live.
Foreigners wishing to retire in Cyprus are granted a residence permit provided they can satisfy the authorities that they have enough income from abroad to support them during their retirement in Cyprus.