The law in Cyprus governing companies is the Companies Law, Chapter 113 of the Statute Laws of Cyprus, which is based on the Companies Act 1948 of the United Kingdom. The constitution of a registered company consists of two documents, the Memorandum of Association and the Articles of Association.
Requirements to set up a Cyprus Company:
- Company name: The name must be approved by the Registrar of Companies. In order to obtain approval the name must not be identical or similar to the names of already incorporated companies and it must include the word Limited or its abbreviation “Ltd” at the end of the name
- Shareholders: Under Cyprus Law, a private company limited by shares must have at least one shareholder. Secrecy of the identity of the shareholders may be obtained through a nominee shareholder. The shares are held in trust for the beneficial owner through a trust deed obtaining secrecy of the identity of the owner and avoiding public disclosure.
- Activities of the Company: The Memorandum of Association must contain the name of the company, the main objects/purposes for which the company is formed, the amount of the authorized and paid up share capital. The names, addresses and description of the subscribers together with the number of shares held is also included.
- Share capital: Each subscriber to the memorandum must subscribe for at least one share. The share capital is usually in Euro however the nominal share capital of the company may be in any currency. It may also be divided into different classes of shares.
- Directors: There is a minimum requirement of at least one director and it may be a local resident, corporate entity or a non resident individual. In order to obtain effective management and control in Cyprus it is advisable that a local resident or the majority of the directors should be local residents. In this case the company is regarded as resident in Cyprus for tax purposes.
- Secretary: The company secretary, very broadly speaking, is usually responsible for administrative matters concerning the company. It is generally the duty of the Secretary to maintain official company minute books and statutory registers and also undertake to prepare any necessary statutory information i.e. the annual return filing of the company, to promptly file statutory information such as the accounts of the company that are prepared by the auditors of the company and to ensure that the company is in a Good Standing. The Company Secretary is able to sign most of the forms that companies need to submit to the Registrar of Companies. The Secretary is the company’s officer who will provide the Members and Directors with notice of meetings and to provide Members with proposed written resolutions and auditors with any passed resolutions. The Secretary keeps or arranges for the keeping of copies of all resolutions of members and directors passed otherwise than at general meetings, minutes of all proceedings and general meetings.
- Registered Office: Every company must have a registered office in Cyprus. The registered office is the address where writs, notices and other official documents can be served upon the Company. It is the official address of the company where the statutory books, registers and the seal of the company are kept. Companies established in Cyprus are free to operate from the offices of lawyers or accountants or from their own offices should they decide to set up offices in Cyprus. It is the practice (at least for companies which do not maintain their own offices in Cyprus) for the firm that undertakes to form the Company, to act as the Company’s registered office.
Annual Obligations of a Cyprus Company: Companies registered in Cyprus whether active or dormant are obliged by the Companies Law and the Income Tax Laws to prepare annual financial statements under International Financial Reporting Standards. Also, the Law provides that every company having a share capital must once a year within 42 days from the date of its Annual General Meeting, file a return to the Registrar of Companies containing details of its registered office, authorized and issued capital, shareholders, directors and secretary etc. This annual return must be accompanied with a copy of the audited financial statements of the Company of the previous year.
The whole process takes approximately 7 working days to be finalized from the moment that the application for the approval of the name is submitted at the Registrar of Companies.