The law in Cyprus governing companies is the Companies Law, Chapter 113 of the Statute Laws of Cyprus, which is based on the Companies Act 1948 of the United Kingdom. The constitution of a registered company consists of two documents, the Memorandum of Association and the Articles of Association.
Requirements to set up a Cyprus Company:
- Company name: The name of a company must be approved by the Registrar of Companies before applying to incorporate the company. No identical or similar names to existing companies are permitted as this may cause confusion.
- Activities of the Company: The main objects/ purpose of the company must be stated in the proposed company’s Memorandum of Association.
- Share capital: The Cyprus Companies Law provides for a minimum of one share and at least one registered shareholder. The minimum required share capital for a company is €1 which may conveniently be divided into 1 share of €1 each – issued and fully paid upon incorporation.
- Shareholders: The minimum number of “registered” and/ or “beneficial” shareholders could be one and can either be an individual or a legal corporate entity. Trusts may also be shareholders in a Cyprus company. Trustee shareholders will frequently hold the shares allowing the beneficial owner to retain anonymity.
- Directors: At least one director is necessary and may be a Cypriot resident individual, a corporate entity or a non-resident (foreign) individual. It is advisable to appoint local directors if one wishes to have effective management and control in Cyprus rendering the company resident in Cyprus for tax purposes.
- Secretary: The Company Secretary may be a physical person or corporate entity and is responsible for the preparation and submission of the Annual Returns of the company, to keep the Minute Book and Register of Members, etc.
- Registered Office: Every company must have a registered office in the country of incorporation. It is the official address of the company where the statutory books, registers and the seal of the company are kept.
- Annual Reporting: Companies need to comply with the following filings annually:
- Submission of the company annual return (HE32 form) to the Registrar of Companies.
- Submission of audited financial statements to the Income Tax Authorities and to the Registrar of Companies.
- Submission of provisional tax returns on 31 July in the tax year and final tax returns on 31 December of the year following the end of the tax year to the Income Tax Authorities.
The affidavit for the formation of a name into a limited liability company in Cyprus is carried out through a lawyer and under normal circumstances the whole procedure, including the approval of the Company’s name, the printing of the Memorandum and Articles of Association, the opening of a bank account up to the time the certificate of incorporation is issued, is completed within 5-10 working days.