Cyprus company

Cyprus offers a considerably advantageous base for business.  A beneficial taxation system with one of the lowest in Europe tax rates on corporate profits (12,5%); the exemption from corporate tax of interest income, dividend income and profits from disposal of securities and lots of double taxation treaties – all these points serve to those who decided to incorporate a company in Cyprus.

However, before incorporation of a company, certain decisions need to be made.

The Type of Legal Entity

The type of a company depends on the intended operations of the company and legal advice needs to be taken on this stage in order to ensure correct choices are made.

Company Name

The generally sense of a company name is to identify it so, the name should be unique and in no way similar or identical to another existing company name, misleading, deceptive or offensive.

In addition, the Official Registrar of Cyprus may reject the name if:

•             The name is general ;

•             The name is descriptive;

•             The name is deceptive (e.g. if it suggests a non -existing royal/national or international connection);

•             The name is a geographical location.

Furthermore certain business types are only allowed to include certain terms in their name, for example words such as “Financial Services” may only be used by companies registered as such with the Cyprus Securities and Exchange Commission.  Similarly “cooperative”, “insurance” or “bank” could only be used by registered entities.

Names may be registered in any language using the Latin alphabet, provided that where a foreign language is used, a translation of the name should be enclosed to the application for its approval by the Registrar.

Approval of the name by Registrar usually takes about 3 working days.

Changing of Name

Where a company has been created, the name may subsequently be changed, by a special resolution of the company.  Approval of the new name will similarly be required.  Change of name will not impact upon rights or obligations of the company prior to the change or render any existing legal proceedings defective.

In the case of a limited company the name must be followed by the words “limited” or “ltd” after the company name.  Similarly, “Public Company Limited” or “P.L.C.” should follow public company names.

The Share Capital

The minimum share capital for private company is not determined.  The most common share capital amount is between 100 – 1000 euros.   It should be noted that share capital of the company can be increased afterwards.

Shareholders

There must be at least one registered shareholder and another company (including overseas company) may be shareholder.

Directors

A company must appoint at least one director.

Although there is no restriction on residence or nationality of director of a company, in order to avoid doubts whether the company is “managed and controlled” in Cyprus (and therefore eligible to take advantage of Cypriot tax laws and double taxation treaties) the director of company desirably should be a Cypriot resident.  It is a common practice in Cyprus that lawyers provide their clients with nominee Directors and signing appropriate set of documents for fiduciary services guarantee client his control over Director (and shareholder if is nominee).

Company Secretary

The company’s secretary must be a resident of Cyprus and he is usually a lawyer the same time – administrator of the company.

Registered Office

The companies incorporated in Cyprus must have a registered office in Cyprus.  The registers of the company are to be kept at a registered address of the company.

Incorporation of Company

A company can be registered in accordance with the requirements of client, this takes about 10 days from the moment when we have received all necessary data and documents from client.

To speed up the process client can buy a ready-made company which can be later on amended (change of name, director, shareholder etc.)

Annual Government Fee

From January 1st, 2013 all Cyprus registered companies are required to pay to the Registry of Companies the Annual Government  Fee € 350. The Annual Fee is payable until 30 of June of each year.