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Company registration In Cyprus. Service offer

Those who wish to form a legal entity in Cyprus usually choose a private or a public (a less common choice) company with members’ liability limited by shares. The most commonly used structure is a private company; such companies cannot offer their shares for public subscription and have a minimum of one and a maximum of fifty members.

Company incorporation in Cyprus

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).

Director of a Private company

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.

Shareholders of a private company

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.

Cyprus companies cannot issue bearer shares, or fractional shares, or no par value shares

Secretary of a private company

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

The Cyprus company incorporation procedure, step by step, is as follows:

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:

Certificate of Incorporation (apostilled);

Certificate of Registered Office (apostilled);

Certificate of Directors and Secretary (apostilled);

Certificate of Shareholders (apostilled);

Apostilled copies of Memorandum and Articles of Association;

Certified Greek to English translation of Memorandum and Articles of Association;

Original Resolution appointing the first director and apostilled copy of such Resolution;

Minutes of the First Meeting of the Board;

Share certificate(s);

Deed of Trust (if shares in the company are issued to a nominee shareholder);

Nominee Director Declaration (if a nominee director is appointed);

Power of Attorney (if a nominee director is appointed).

The client also receives the company’s common seal.

Subsequent administration of the company

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.

IMPORTANT: this levy has been abolished starting from 2024 (the levy already accrued for previous years is still payable, as well as late payment penalties).

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.

VAT registration becomes mandatory in the following cases:

there are reasonable grounds to believe that the taxable turnover will exceed the registration threshold in the following 30 days (for example, a contract is made);

at the end of the month the total value of taxable transactions in the preceding 12 months has exceeded the registration threshold;

the company receives services which are subject to reporting under the reverse charge method the total value of which exceeds the registration threshold.

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.

The general VAT rate in Cyprus is 19%
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).
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IMPORTANT: amendments to the Prevention and Suppression of Money Laundering and Terrorism Financing Law (2007) came into force in Cyprus on 23 February 2020, introducing a public register of beneficial owners and a number of new requirements for companies to file beneficial ownership information.

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.

Any changes must be filed with the Registrar within 14 days. In addition, the company must annually confirm the accuracy of the information contained in the register.
It is important to note that the Cyprus register of beneficial owners is currently non-public. In November 2022, the Court of Justice of the European Union issued a judgement ruling the general public’s access to beneficial ownership information a “serious interference with the fundamental rights to respect for private life and to the protection of personal data” and invalidating the relevant provisions of the EU’s 5th Anti-Money Laundering Directive (Directive 2018/843/EU, which introduced publicly available beneficial ownership registers). Following this judgement, the Cyprus Registrar announced that public access to the register of beneficial owners was suspended from 23 November 2022.

Fees for company registration services in Cyprus

Services
Fees (EUR, without VAT)[1]
Total cost of incorporation of a company in Cyprus, including preparation and provision of original constitutive documents of the company and apostilled copies of such documents, share issue documents, and common seal, but not including compliance fee and the cost of initial filing of the register of beneficial owners
2 500
Annual administration (starting from the second year), including provision of registered office, but not including compliance fee and the cost of annual filing of the register of beneficial owners
1 200
Nominee director and shareholder (for 1 year, including one apostilled power of attorney), and secretary
1 140
Filing of the register of beneficial owners:
- initial filing
- annual filing
- filing of changes (change of beneficial owner, change of personal data, etc.)
350
250
220
Preparation and submission of “dormant” accounts (for a company that did not trade during the financial year and does not hold bank accounts)
1 140
Preparation and submission of financial statements for a company that started trading
100 – 350 / per hour of work
Compliance fee
Payable in the cases of:
- incorporation of a Cyprus company,
- renewal of a company,
- liquidation of a company,
- transfer out of a company,
- issue of a power of attorney to a new attorney,
- change of director / shareholder / beneficial owner, except the change to a nominee director / shareholder,
- signing of documents.
350 (standard rate, includes the check of 1 individual)
+ 150 for each additional individual (director, shareholder, or beneficial owner) or legal entity (director or shareholder) if such legal entity is administered by GSL
+ 200 for each additional legal entity (director or shareholder) if such legal entity is not administered by GSL
450 (rate for high-risk companies, includes the check of 1 individual)
100 (signing of documents)

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

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