Information on Cyprus Business Companies – 01/2011
Cyprus has become a centre through which many leading international companies conduct their business activities. Among the benefits which accrue in using Cyprus as a corporate vehicle are the lowest corporate tax rate in Europe, the extensive double tax treaty network, the secure environment, its reputation, infrastructure and favorable tax provisions.
The name of a company must be approved by the Registrar of Companies before applying to incorporate the company. No identical or is so similar to an existing company as to cause confusion is permitted. Likewise, any name considered of a “general meaning”, misleading, undesirable, offensive or implies “Royal”, “Queen”, “King”, “Imperial”, “Saint”, “Commonwealth”, “National”, “Corporation”, “Co-operative” etc. are not approved either.
Main Objects/Activities of the company
The main objects/purpose of the company must be stated in the proposed company’s Memorandum of Association, 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 considered “ultra vires” (beyond the powers of the company) and, therefore void.
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 €100 which may conveniently be divided into 100 shares of €1 each – issued and fully paid upon incorporation.
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.
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.
The company Secretary may be a physical person or corporate entity and is responsible to prepare and submit the Annual Returns of the company, to keep the Minute Book and Register of Members etc.
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. Summons, writs, notices orders and other official documents are also served at the registered office address.
A recently issued reference from a reputable bank must be provided for the beneficial shareholder together with a clear copy of his/her passport, or a copy of the certificate of incorporation (if a corporate entity), along with a copy of a utility bill depicting the residential address. Specimen of such letter can be provided upon request.
Bearer shares are not permitted.
Companies need to comply with the following filings annually:
- (a) Submission of the company annual return to the Registrar of Companies.
- (b) Submission of audited financial statements to the Income Tax Authorities and to the Registrar of Companies.
- (c) Submission of provisional tax returns on 1 August 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.
Confidentiality / Secrecy
Although details of the shareholders and directors appear on the public file, with the use of trustee shareholders together with the appointment of nominee directors, one can ensure complete confidentiality and anonymity of the beneficial owners.
A number of already registered companies could be available through our associates. Transfer of shares may be effected immediately. The list of the already incorporated companies (shelf companies) is available on request.
Exchange Control / Bank accounts
Companies are under no exchange control. Bank accounts may be kept anywhere in the world and in any currency. Bank accounts kept in Cyprus may be operated freely without prior approval of the Central Bank of Cyprus.
Companies need to have their accounts audited every year and file a tax return with the Commissioner of the Inland Revenue.
The audit must be carried out by a Cypriot firm of auditors in accordance with International Standards on Auditing.
The above is brief and general in nature. Kindly contact our professionals for an in-depth analysis and advice.