Formation of a Cyprus Company
Registering a Private Limited Liability company in Cyprus is a quite simple and straight-forward procedure without the fuss that many other jurisdictions have. The latter can be completed within a maximum period of 10 days at the most, and enables the legal entity to start business forthwith. Incorporating a Private Limited Liability company in Cyprus provides a plethora of benefits which can be proven to be crucial in the formation of a tax-efficient and profitable business structure. The formation also of a holding structure is a great way to make sure assets are well managed in a way that results in strong growth. By having a holding structure, it will be easier to identify where improvements can be made that will improve profitability.
As a standardise procedure, all the below steps are taken by virtue of the provisions of the Companies Law (CAP113) and also according to the prescribed policies of the Registrar of Companies:
1) The first step is for the company to acquire a Name. There are some specific words and phrases that are not allowed (or only under obtaining permission) to be included in the Company’s name, something that we will consult with our Client. Indicatively we cite the following reasons for rejection of a Name:
- 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.
The Name’s approval is obtained under the discretion of the Registrar of Companies and the approximate timeframe is calculated within 3 working days (depending on the workload of the Registrar of Companies).
2) Completion and Submission of various applications regarding the details of the Director(s), Secretary. Registered Office and Shareholder(s) of the Company.
3) Upon discussing the necessities with our Client as to the line of business of the Company, we carefully draft and customise the Memorandum of the Company. The latter 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 their signature and number of shares for which they have subscribed.
Another prerequisite, is the drafting of 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. Upon approval and signing by the Subscribers/Shareholders, we proceed with the submission.
After the above steps are finalized, the below certificates are issued by the Registrar of Companies:
1) Certificate of Incorporation
2) Certificate of Officers (Director/s & Secretary)
3) Certificate of Shareholder(s)
4) Certificate of Registered Office
5) Memorandum and Articles of Incorporation
Timeframe: normally 10 working days (depending on the workload of the Registrar of Companies).
Annual Obligations for Maintenance:
- HE32-Annual General Meeting: every company having a share capital must once in every year, within 42 days from the date of its Annual General Meeting , make a return to the Registrar of Companies. This must be accompanied with a copy of the Financial Statements of the Company of the previous year translated in Greek.
- Annual Levy which has to be payable by 30 June annually to the Registrar of Companies. Failure to effect timely payment will result in financial penalties or even deregistration.
- Financial Statements prepared by licensed Auditors on the basis of International Accounting Standards
- Accounting -Books & Records: every Company deriving income from sources both within and outside Cyprus shall for each year of assessment maintain books and records on the basis of which financial statements are prepared in accordance with acceptable auditing standards by the Auditor of the Company. Book-keeping must be updated within 4 months from the date of issue of each transaction (invoice, receipt, bank advice etc)
Competitively lower fees for establishment and maintenance of a Cyprus Company in comparison with other popular jurisdictions.
With a dedicated team of professionals with deep knowledge and expertise to assist you non only incorporate and integrate a Cyprus company in your tax structure but also properly maintain it whilst enjoying all the benefits, we are confident that we can cater your professional needs with the best possible way.
As indicated above, the whole registration procedure is quite simple and transparent. Implications have been encountered only on rare occasions and the Registrar of Companies was always available to assist. With the creation of the Electronic Submission System, we are now able to submit a registration in a couple of minutes.