The most popular type of company in Cyprus is a private company limited by shares (Ltd) – also known as a private limited company. There are a number of relatively simple steps which must be followed when incorporating such a company, and which, depending on workload at the Registrar, can take as little as 4 to 6 weeks to complete from start to finish.
The first step is to get the proposed name approved by the Registrar of Companies. When proposing a name, it is important to make sure that the name is unique, that it is not similar to any existing name, trademark or brand and that, if initials are used, then the definitions of those initials can be explained to the Registrar. It is recommended that you check with the Registrar’s website (http://www.mcit.gov.cy/mcit/drcor/drcor.nsf/index_en/index_en?opendocument) first to check if the name you want to use is potentially available.
Memorandum & Articles of Association (M&A)
Every company must have both a Memorandum and Articles of Association. The Memorandum outlines the objective of the company; the Articles its internal regulations and procedures. The M&A is signed by the subscribers being the first shareholders of the company.
The M&A has to be drafted in Greek – although an English version is often recommended as well for international companies – and must be signed by a qualified company lawyer, and a copy deposited with the Registrar when the company registration is filed. Although an individual company have its own M&A requirements, time and money can be saved with the use of a generic template. AJD Consultants can assist both with this and with the provision of an appropriately qualified lawyer.
There is no minimum share capital requirement for the establishment of a private limited company in Cyprus, although €1,000 is frequently used (which does not need to be paid-up). Although the share capital can be in any currency, the Euro (the currency used in Cyprus) is employed by the majority of companies.
Under Cypriot law, the Directors have responsibility for the operations and day-to-day management of a Company. By law, the minimum number of directors is one – this does not need to be an individual, however; corporate directors are allowed.
Although a director can be of any nationality, their tax residency can be important when determining the status of the company. To be regarded as a Cypriot resident company, eligible for the 12.5% corporate tax rate, and protection, by double tax treaty and other relevant legal provisions, from taxation in another jurisdiction (potentially with higher tax rates), at least one of the directors needs to be a Cypriot tax resident (not national). AJD Consultants can help with the provision of a suitably qualified Cypriot resident director if required.
A company also needs a registered office address in order to receive legal notices and to serve as the company’s home. Whilst this may not be in the Republic, choosing an office outside Cyprus will make the company non-resident, and thus it will not avail of the benefits of a resident private limited company.
Having a registered office address does not mean renting an office space, however. It simply requires an address in Cyprus where mail can be sent, and, if need be, phone calls can be directed. Again, AJD Consultants can help with the provision of a suitable registered office address is required.
Incorporating a private limited company in Cyprus is relatively easy, and there are a number of favourable benefits to doing so, either as a stand-alone entity or as part of a broader group structure. Provided that the steps outlined are followed, a company can be incorporated in a matter of weeks and can begin to start trading. For further information or help with incorporating your new Cyprus company, please contact us directly.