Unless the business structure needs to be complex, it is usually best to opt for a Sole Proprietorship or partnership. A Sole Proprietorship falls under the Partnership and Business Names Law, being essentially similar to the English sole partnership. It is subject to broadly the same rules as a General Partnership. A sole proprietor has unlimited liability for his debts, is taxed under the personal income tax regime, and any business name (other than his own) must be registered with the Registrar of Partnerships.
A General Partnership must be registered with the Registrar of Partnerships within one month of formation, giving name, purposes place of business, full particulars of the partners and so forth. There are no restrictions on foreigners being part of a partnership. A general partnership may contain between 2 and 20 partners. There is no requirement for a general partnership to file accounts or to have audits carried out. Each partner has unlimited liability for the partnership’s debts and obligations.
A Limited Partnership may have one or more general partners with unlimited liability and one or more partners whose liability is limited to the amount declared in the partnership agreement.
For either form of partnership, it is advisable to have a partnership agreement drawn up and this should be notarised and translated into the language required by the authorities.
Other business forms (likely to be of less interest to a individual small business or entrepreneur, however) include:
- Private Limited Company limited by shares;
- Public Company Limited by shares;
- Company Limited by guarantee. (This type of business structure is normally associated with charitable or non-profit making entities)
- Branch of an Overseas Company.
At CA Tsialoupis & Co our experienced team is ready to provide you with any guidance that you may require in identifying the most suitable vehicle for your business affairs and will be happy to assist you with your requirements, including any applicable company registration.
Setting up a Limited Liability Company in Cyprus– Incorporation Process
The limited liability company is the most common form of business structure in Cyprus and has two essential features:
- the creation of a separate legal person distinct from that of its members;
- the limitation of liability of its members to the value of the consideration paid by the shareholder for the shares.
To qualify as a limited liability company, the Articles of Association must restrict the right of a shareholder to transfer its shares, limit the number of shareholders to 50 and prohibit the sale of any securities of the company to the public.
The Cyprus Registrar of Companies is responsible for company registration in Cyprus. It also has a key role in providing information about Cyprus companies. The existence of any form of company commences when a certificate of incorporation is issued by the Cyprus Registrar of Companies.
Under the Cyprus Companies Law the Administrative procedures for registering a company, have been simplified, reflecting the importance placed on the country’s development as a centre of international business.
For proper professional advice, please get in touch with one of our specialized advisors.
For more information please download our TAX FACTS leaflet.