Company Registration in Cyprus

Cyprus legal system is based on English common law, with civil law modifications. Cyprus company law is regulated by the Companies Law, Cap. 113, as amended from time to time, as well as by the case law (being as an ancillary source of law in Cyprus).

The principal forms of business organisation in Cyprus are: Private company limited by shares, Exempt private company, Public company limited by shares, Company limited by guarantee, Branch of overseas company, General partnership, Limited partnership, Sole Proprietorship and Trust.

The most common structure in Cyprus is the private company limited by shares. It is possible to buy a shelf company of this type or to incorporate a new one. The Registry timescale to incorporate a new company ranges from 15 to 25 working days, but can be reduced to 3-6 working days by payment of acceleration fee. The timescale for a new turnkey entity is from 10 to 30 working days.

Suffixes to denote limited liability in company names are ‘Limited’ or ‘Ltd’.

Every company name must first be approved by the Registrar of Companies. Company names may be expressed in Greek or any language using the Latin alphabet. Names in Cyrillic alphabet are not allowed. The Registrar can decline any name it considers undesirable or any name that is identical or similar to an existing company’s name, or implies illegal activity or royal or government patronage. The following names, their derivatives or foreign language equivalents require consent or a licence: Asset Management, Asset Manager, Assurance, Bank, Banking, Broker(s),Brokerage, Capital, Credit, Currency(ies), Custodian(s), Custody, Dealer(s), Dealing, Deposit(s), Derivative(s), Exchange, Fiduciary(ies), Finance, Financial, Fund(s), Future(s), Insurance, Lending, Loan(s), Lender(s), Option(s), Pension(s), Portfolio, Reserve, Savings, Security(ies), Stock, Trust, Trustees.

The first step in formation of a Cyprus company is to apply for approval of its name by the Registrar of Companies. After the proposed name is approved, the Memorandum and Articles of Association of the company must be signed by subscriber(s) and for at least one share. After incorporation the subscribers of the Memorandum will become members of the company. The Memorandum of Association establishes the basic structure of the company and states its name, objectives, share capital and division of the share capital into shares of a certain par value, and any other matters which affect the basic existence of the company. The Articles of Association govern relations between various members of the company. They deal with the procedures for calling meetings of shareholders, passing resolutions and transferring shares including any restrictions which may apply. A company may alter or add to its Memorandum and Articles of association by passing a special resolution.

The next step of the incorporation procedure is to file the Memorandum and Articles of Association together with the relevant registration forms with the Registrar of Companies. There are three such forms:

• HE1 – a form which the lawyer handling the incorporation signs under oath to confirm that the company’s registration is in full compliance with the laws;
• HE2 – a form which states the registered office address; and
• HE3 – a form which states the first director(s) and secretary.

On completion of registration, the Registrar of Companies issues a Certificate of Incorporation which specifies the name of the company, date of its incorporation, and its reference number. The Certificate of Incorporation will be accompanied by the Certificate of Registered Office, Certificate of Shareholders, and Certificate of Directors and Secretaries.

There are a number of restrictions on the activities of a private company in Cyprus. It cannot undertake the business of banking, insurance or rendering of financial services to the public unless a special permission is granted.

Cyprus companies may open accounts with banks both within and outside Cyprus.

Cyprus companies must maintain a registered office address within Cyprus and keep at that address the following information and documents: register of directors and secretaries; register of members; books containing the minutes of any general meeting; register of holders of debentures; copies of instruments creating charges and mortgages, register of charges, book of mortgages and other.

Every Cyprus company must have a seal with its name engraven in legible characters on it. A company whose objects require or comprise the transaction of business in foreign countries may also have for use in any territory, district, or place an official seal, which shall be a facsimile of the common seal of the company, with the addition on its face of the name of every territory, district or place where it is to be used.

Cyprus companies are renewed annually and the renewal normally includes: payment of fees for nominee directors and shareholders (if any), secretary, registered office and government fee for filing with the Registrar of an Annual Return containing the details of all directors, shareholders, registered office and share capital or changes in the same.

The redomiciliation of companies both to and from Cyprus was made possible with the enactment in 2006 of law 124(I)/2006 amending the Companies Law, Cap. 113.

A Cyprus company is required to have a minimum of one director who can be a natural person or a body corporate. Director’s details are disclosed to the local agent and appear on the public file. There is no legal requirement that the directors be Cyprus residents. But in order to qualify as a tax resident and consequently take advantage of the double tax treaty network it is necessary that the company be managed and controlled in Cyprus, thus should have a majority of the directors based in Cyprus and all board meetings of the company should take place in Cyprus.

All Cyprus companies must appoint a company secretary who may be a natural person or a body corporate, a resident or non-resident. There are no special requirements for qualifications of the secretary. The law prohibits that the sole director be appointed as secretary. Besides, no company may have as secretary a corporation the sole director of which is a sole director of the company. However the last two rules do not apply to private companies with just one shareholder.

Cyprus companies may have one or more shareholders, individuals or corporations of any nationality or residence. Shareholders’ details are disclosed to the local agent and appear on the public file. General meetings are to be held either in Cyprus or abroad annually, with the first annual general meeting to take place within eighteen months of the company’s incorporation.

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.

In November 2022, Cyprus suspended public access to the register of beneficiaries pursuant to the EU Court of Justice (CJEE) Decision in consolidated cases C-37/20 and C-601/20 of November 22. The Court ruled that Article 1, paragraph 15(c) of Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018, which provides for access to information on beneficiaries of legal persons to any member of the public, was invalid as it constituted a serious interference with the fundamental rights to respect for privacy and the protection of personal data enshrined in Articles 7 and 8 of the EU Charter of Fundamental Rights.

The relevant information to the competent and supervisory authorities continues to be provided with the applicable procedure. And the appropriate information also continues to be provided to the obliged entities (when the information on the beneficial owners is requested in order to perform customer due diligence).

The share capital of a private limited company in Cyprus can be denominated in any currency. There is no minimum authorized share capital as the law simply provides for a minimum of one share to be issued and paid immediately upon issue or within time specified in the relevant resolution. No payments deadlines are set for the authorized capital. Usually the share capital is EUR 1 000 which is divided into 1 000 shares of EUR 1 each. Bearer shares or shares with no par value are not permitted.

The winding-up of a Cyprus company may be accomplished in one of the following ways:

• by a court order;
• subject to the supervision of the court;
• voluntarily by special resolution of shareholders of the company.

A Cyprus company may be wound up by the court if:

• the company has by special resolution resolved that the company be wound up by the court;
• the company does not commence its business within a year from its incorporation or suspends its business for a whole year;
• the company is unable to pay its debts;
• the court is of opinion that it is just and equitable that the company should be wound up.

For the purpose of conducting the proceedings in winding up a company and performing such duties in reference thereto as the court may impose, the court may appoint a liquidator.

In order for the company to be put into voluntary liquidation by members, the directors of the Cyprus company must make a statutory declaration that they have made a full inquiry into the affairs of the company and are of the opinion that it will be able to pay its debts in full within a stated period of time not exceeding 12 months from the commencement of the winding up. This declaration of solvency must be made and filed with the Registrar of Companies within five weeks immediately preceding the date of special resolution to voluntarily wind up the company and it must contain a statement of assets and liabilities based on the most recent financial statements of the company.

After the declaration of solvency is filed with the Registrar, the company must pass a special resolution in general meeting that it be wound up voluntarily (which date would be deemed to be the date of commencement of winding up) and give notice of this resolution in official Gazette within 14 days of the date of such resolution. The company will cease business from the commencement of the winding up except in so far as required for its beneficial winding up.

The liquidator is appointed by general meeting. Within 14 days of his appointment the liquidator should publish a notice of his appointment in the Gazette and deliver to the Registrar a note of his appointment on a special form C.41. On appointment of liquidator all directors’ powers normally pass to him.

Once the company’s affairs are fully wound up, the liquidator shall prepare a liquidation report and call a final general meeting to present this report to them for approval. The meeting should be called on at least one month’s notice published in the Gazette. Within one week of the date of the meeting the liquidator shall file with the Registrar a copy of the accounts and make a return to the Registrar notifying him of the holding of the final meeting and of its date. The company is deemed to be dissolved on expiry of three months of the date of filing of such return.

Voluntary winding-up procedures are rather lengthy, complicated and costly. A simpler way is available for companies which do not carry any activities, nor any assets or liabilities and when there are no disputes among shareholders. In this case the director of the company informs the Registrar of Companies that the company has stopped operation and does not have any assets or liabilities. Certain resolutions and letters must be prepared and signed by ultimate beneficiaries to enable the director to proceed accordingly at the Registrar. Also, audited accounts must be prepared until the date the company was involved in business and the audited accounts must show that the company does not have any assets or liabilities.

In consequence of the director’s letter, the Registrar of Companies will strike off the name of the company from the register within 6 to 12 months time. The Registrar will publish its decision to strike the company off the register in the official Gazette.

The mechanism for reinstatement of a struck-off company is set out in the Company Law, Cap. 113 in section 327. Reinstatement is provided in paragraph (7) of this section with simple application at court, within twenty years from publication in the Gazette of the notice of strike-off. Provided that the court is satisfied that indeed the conditions in the law are fulfilled, it will issue an order of reinstatement which will be filed with the Registrar. The company is then considered as never struck off (as if always in good standing), so the court order has a pretty strong effect for the protection of a member of the company, a creditor or the company itself. It is also useful to know that the strike-off does not mean the liability for the directors or a member is eliminated during the strike-off.

The conditions for reinstatement checked by the court are: if the company was having activities during strike-off, or was operating in any way, or if the court deems fair to reinstate it. So the conditions are not demanding or strict, they are rather loose and discretionary on the court (‘deems fair’).