Cyprus Company registration with Operational Office. Subsequent administration of the company

Incorporation of a Cyprus Private Company Limited by Shares includes the following steps:

· Company name to be checked for its availability (at least three names)**, such name:

• can be in Greek or English;
• must not be identical or similar to the name of an existing company;
• must end with a suffix denoting the type of entity (“LIMITED” or “LTD”);

· Company structure (director, shareholder, beneficial owner, attorney);

· Share capital and distribution of shares between members (by default, the company will be incorporated with 1 000 shares of EUR 1 each);

· Activity and geography of business.

The list of required documents is supplied separately.

having the documents signed by the directors and members. Sending the necessary set of documents to Cyprus.

The incorporation of a new company in Cyprus takes 4 to 5 weeks after filing with the Registrar, which time includes the making of an apostilled set of documents. If acceleration fee is paid, the incorporation time can be reduced to two weeks (depends on the current workload of the Cyprus authorities).

The documents delivered to the client upon Cyprus company incorporation include:

1. Certificate of Incorporation – copy certified by the Registrar and apostilled;
2. Certificate of Registered Office – original signed by the Registrar and apostilled;
3. Certificate of Director and Secretary – original signed by the Registrar and apostilled;
4. Certificate of Shareholders – original signed by the Registrar and apostilled;
5. Memorandum and Articles of Association – English version (translated from Greek and certified by the company’s Secretary), and Greek and English versions under apostilled affidavit;
6. Written resolution of the subscriber appointing the director – apostilled original;
7. Minutes of the first meeting of the Board of Directors – original;
8. Share Certificate – original;
9. Company 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.

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 section 142(1) of 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 conducted any business or not. If the company remained dormant, the auditors must prepare and submit dormant accounts.

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

Cyprus companies that have subsidiaries (more than 50%-owned) 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:

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

In addition to annual financial statements, all Cyprus 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. It is also possible to submit a tax return to the tax office only once, paying straight away the entire declared sum of provisional corporate tax. 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. But a voluntary VAT registration is possible.

The general VAT rate in Cyprus is 19%.

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.

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

To assess the company’s tax burden, we recommend seeking tax advice (which can be arranged upon request).

On 23 February 2020, amendments to the Prevention and Suppression of Money Laundering and Terrorism Financing Law (2007) came into force in Cyprus, 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.

The postal service includes:

• provision of postal address (the address can be publicly stated as postal address);
• receiving mail, sending notifications of receipt (within the first three business days of each month);
• scanning up to 5 pages per month;
• one monthly shipment of mail to the GSL Law & Consulting.

The postal service fee is EUR 635 per year + VAT, including one monthly shipment to the GSL Law & Consulting. Additional courier shipments of documents from the Cyprus office are payable in accordance with the invoices. Scanning and sending by email any more documents than 5 pages per month (if necessary) is subject to an additional charge of EUR 10 per page + VAT.

A SIM card with a local Cyprus number allows receiving and making calls to/from other countries as part of international roaming.

A local SIM card costs EUR 235 + VAT, plus courier delivery costs. When sending a SIM card to Russia, there may be additional difficulties at the customs. Please ask your GSL Law & Consulting consultant for more information and term of delivery.

The telephone line service includes:

• installation of a telephone line with an individual phone number;
• forwarding of Cyprus calls to a local SIM card (that allows call forwarding outside Cyprus).

The fee for arranging an individual telephone line (IP telephony) is EUR 800 + VAT. The cost of procuring a local SIM card is EUR 235 + VAT, plus courier delivery costs.

All incoming and outgoing calls are paid for separately based on monthly bills. Where necessary, it is possible to provide a service of a receptionist taking calls and recording a summary of the call. The scope of services is to be discussed additionally depending on the needs of the client.

The fastest and easiest was to create the company’s substance in Cyprus is renting an office at GSL Law & Consulting premises.

The fee for making an office rent agreement without physically placing there an employee is EUR 330 per month + VAT. The fee for renting an office with physically placing there an employee is from EUR 330 per month + VAT depending on the size of the premises.

The rent fee with physical placement of an employee includes:

• Furniture: 1 desk, chairs (1 chair for the workstation, 1 chair for visitors), a filing cabinet;
• Air conditioner;
• Wireless Internet;
• Stationery;
• Room cleaning once a week;
• All utility expenses (water, electricity, Internet and general building maintenance costs);
• WC and the use of a kitchenette;
• GSL’s meeting room is freely available;
• Messenger (1 errand a day within Nicosia);
• Printer available for use;
• Receptionist (receiving and sending mail, assistance in organizing office work).

Payment is made for 6 or 12 months in advance.

When physically placing an employee in the office, an initial deposit equal to a monthly rent is charged. The deposit is required to cover possible damage and, if none, is returned to the tenant upon expiry of the rent. The details of equipment and office use should be agreed individually.

The cost of renting your own office with a separate address depends on the size and location of the premises. The minimum rent, on average, is from EUR 330 per month + VAT for a small office (10-15 sq. m)without a receptionist. Our fee for finding an office space and making a rent agreement is EUR 900 + VAT. The fee includes the search for premises according to the parameters designated by the client, description and provision of information and photos, signing of an office rent agreement, and delivery of keys.

Equipping the office and doing other work to prepare it for opening (installing a telephone, connecting the Internet, placing furniture, etc.) is to be agreed individually.

Upon request, our staff can assist with recruiting a director who has the necessary qualification in a specific field or area of business, and other employees to be hired by the company. The recruiting fee is 20% of the annual income of the hired employee + VAT. Before any work is undertaken, we require a retainer of EUR 1 000.

The minimum salary for a business manager starts at EUR 500 per month (part-time), for a director – at EUR 1 000 per month (full-time). The tax and duties will depend on the total income of the employee.

If foreign employees move to Cyprus to be hired by a Cyprus-registered company, a work and temporary residence permit will be required. A company that rents or owns an office in Cyprus becomes eligible to attract foreign employees. Our fee for accelerated registration of a company with the Migration Department (7 days) and obtaining of a work and temporary residence permit for one employee (up to 30 days) is EUR 2 800 + VAT. More details about opening an office and hiring your staff in Cyprus can be provided upon request.

*In most cases, substance in Cyprus is required.

**The Registrar can reject any name that it considers inappropriate or that coincides with or is similar to the names of existing Cyprus companies.

***The fees are valid as of July 2024. The invoices will include 19% VAT on the services rendered, except Annual Levy and tax payments.

****Price per certificate.