Company registration In Cyprus. Service offer

The incorporation of a private company in Cyprus takes 4 to 5 weeks. If acceleration fee is paid, the incorporation time can be reduced to 2 weeks (depends on the current work-load of the Cyprus authorities).

A private company in Cyprus must have at least one director, a legal entity or an individual, wherever resident or registered. But the details of a Cyprus company director must be filed with the Registrar and therefore are accessible to third parties.

Besides, the directors’ tax residence affects the tax residence of the company: the company is regarded a Cyprus tax resident if it is managed from or within Cyprus, so either the sole director or the majority of the board must be tax residents of the Republic of Cyprus. In this case the company can be treated as resident in Cyprus, which, among other things, enables it to apply the Double Tax Treaties made by the Republic.

The shareholders of a private company in Cyprus can be individuals or legal entities, wherever domiciled/registered or resident. Their details must be filed with the Cyprus Registrar as well.

The Cyprus Companies Law, Cap. 113 does not set a minimum share capital for private companies. The company normally issues 1 000 shares of EUR 1.00 each. All the issued shares must be paid by the shareholders.

A Cyprus company must appoint a secretary, either corporate or individual.

1) You need to select

• company name to be checked for its availability (the name of a private company must include “Limited” or “Ltd.”);
• company structure (director, secretary, shareholder, beneficial owner);
• share capital;
• company’s objects (activities).

2) Payment of fees

3) The following documentation must be provided:

• copies of passports for director, shareholder (unless nominee services are used), beneficial owner and attorney (if a power of attorney is required): a copy of the internal passport should contain all pages that have any information, a copy of the international passport can only contain the photo page;
• reference letter: this can be a reference letter from a bank where a personal account is held, or from a professional such as attorney-at-law or auditor, stating that they personally know the client and have worked with him/her for at least 1 year;
• if the director or shareholder is a legal entity, then a full set of constitutive documents is required; for companies older than 1 year a certificate of good standing (or its equivalent) is also required; the documents for the corporate shareholder must disclose the ownership structure right down to the ultimate beneficial owner.

For each Cyprus company, a contract for administration and audit services is signed with the beneficial owner and a client information form is completed.

4) Name check at the Registrar

After the name of the would-be company is cleared at the Registrar, the incorporation documents can be drafted.

5) Drafting and filing constitutive documents with the Registrar, preparing the company file

The subscriber (who then becomes the company’s first shareholder) adopts the memorandum and articles of association and appoints the first director. The company’s memorandum and articles of association and specialized forms containing the details of the would-be company are submitted to the Registrar. The company is allocated a registration number within 10-15 days. After another 2-3 days the Registrar issues a certificate of incorporation, as well as certificate of director and secretary, certificate of registered office and certificate of shareholders.

Upon incorporation, a company file is prepared which includes:

The client also receives the company’s common seal.

Cyprus companies used to be required to pay to the Registrar an Annual Government Levy of EUR 350. A company had to pay this levy before 30 June each year starting from the year of incorporation. If a company was registered after 30 June, it was required to pay the levy before 30 June in the year following the year of incorporation.

Late payment attracted penalties:

• 10% of the levy amount if the delay is not more than 2 months;
• 40% of the levy amount if the delay is 2 to 5 months.

For a failure to pay the levy, a company could even be struck off* the register.

*Strike-off is not the same as dissolution and can be revoked by court order within 20 years. Upon restoration, a company is restored to the same status it had immediately before the strike-off and with the same officers appointed. If a company is struck off without filing audited accounts, the director carries a risk of facing claims from the Tax Department.

The annual payments for a Cyprus company include fees for provision of secretary, registered office, and professional directors / shareholders (if any in the company).

Under Companies Law, Cyprus companies must prepare and submit audited financial statements in accordance with International Accounting Standards. This is a statutory requirement irrespective of whether the company carried on any business or not. If the company remained dormant, the auditors must prepare and submit dormant accounts.

The company must submit returns to the tax authorities within one year of the financial year end.

Cyprus companies that have subsidiaries (with holdings in excess of 50%) must prepare consolidated financial statements for the group.

Exemption is granted to the so-called small and medium-sized groups where:

• total balance sheet (total value of assets without deducting liabilities) does not exceed EUR 20 000 000;
• net turnover does not exceed EUR 40 000 000;
• average number of employees in the financial year does not exceed 250 people.

A group must meet at least two of these three criteria. In addition, there are two general conditions to be fulfilled for the above exemption to apply:

• the companies are not public, meaning that their shares are not traded at any stock exchange;
• preparation of consolidated financial statements is not mandated by any other legislation.

In addition to annual reporting, all companies must before 31 July of each financial year submit a provisional tax return showing the estimation of their profit in the current year. Based on this return, the company must pay provisional corporate tax (if there is any profit declared) in two equal instalments – by 31 July and 31 December in the same year. Adjustments to the provisional tax return can be made before 31 December.

The main tax return must be submitted to the tax office within 12 months of the financial year-end, i.e. before 31 December of the year following the financial year.

The corporate tax rate is 12.5%.

Account should be taken of VAT matters as well. In most EU countries, Cyprus included, VAT registration is not obligatory until the sales turnover within the country exceeds the registration threshold, which is EUR 15 600 in Cyprus.

A voluntary VAT registration is possible.

Upon registration at the VAT Authority and allocation of VAT number, the company must every quarter prepare and submit a VAT return and pay VAT within 40 days of the end of the VAT period.

As Cyprus is not an offshore jurisdiction, and a Cyprus company must regularly submit financial state-ments and pay taxes prescribed by law, we recommend seeking lawyer’s and auditor’s advice regarding subsequent administration of the company before it is actually incorporated. And to assess the company’s tax burden, we recommend seeking tax advice (which can be arranged upon request).

Full and unrestricted access to the register is provided to certain government authorities of the Republic of Cyprus, whereas all other persons can only access the following information by making a request for a fee (EUR 3.50 per company): name; month and year of birth; citizenship; country of residence; nature and scope of control.

[1] The fees are valid as of July 2024. The invoices will include 19% VAT on the services provided, except Annual Levy and payment of taxes.