INCORPORATION IN A NUTSHELL
Legal Form of Company
Limited Liability Company (Ltd), according to Cyprus Company Law. Under the law, companies are separated into tax-resident and non-tax-resident companies.
Incorporation of Company
This is through your consultant in Cyprus. Only lawyers can set up a company. CA Tsialoupis & Co undertakes the set-up of such companies through our associate lawyers.
May be in any language using Latin letters. The Registrar reserves the right to object names however various times instead of rejecting the Registrar provide the applicant with alternative names that would be accepted. Already registered names will not be permitted. The following words and its translations may not be used: “royal”, “Queen”, “King”, “saint”, “Commonwealth”, “international”, “bank”, “insurance” or “assurance”, and similar words that may suggest a subject of business that require a special licence.
The records at the Registrar and Public Receiver are open to the public scrutiny. You can inspect: shareholders, directors, secretary of company, registered office, authorised capital, Articles of Association und Memorandum.
The authorised share capital of a company is a business decision since the law is flexible on this issue. However, we generally incorporate companies with an authorised capital of € 5.000,00 and an issued share capital of €1.000,00. In such the company may increase its issued share capital up to 50000€ at any time based on a simple procedure.
Bearer shares are not permitted. All other kind of shares including preferred shares, voting and non voting shares etc. are permitted. Subject to the special needs of every company we generally incorporate the companies with 1.000 shares of € 1,00 each.
Disclosed as shareholder. At CA Tsialoupis & Co we offer nominee services (nominee shareholders and/or nominee director). Registered office and secretary are provided by our associates. In case whereby nominee shareholders are appointed, the beneficial owner does not appear in the records of the Registrar of Companies. Beneficial owners living outside Cyprus have to report to us their address of residence and their profession. A true copy of passport, a recent copy of a utility bill and a bank reference of the beneficial owner are required to ensure compliance with the International Money Laundry Regulations. Also we need to know who will be the signatory and user of the internet bank codes. In addition Information about the line of business of the company and expected turnover and the countries with which it will have commercial relations. All these records are not open to the public.
Minimum Number of Shareholders
One. May be a natural or a legal person and may reside anywhere in the world.
Minimum number of Directors
One. Can be Cypriots or foreigners, natural or legal persons. The majority of directors of a tax-resident company has to reside in Cyprus. The director(s) of a non-tax-resident company has (have) to reside outside Cyprus. If a company is considered as non Cyprus resident, it may suffer tax in an overseas country.
Secretary of Company
Secretary of Company has to be appointed. Can be a natural or legal person and has to reside in Cyprus.
Has to be maintained in Cyprus.
At least one annual shareholder meeting has to be held, on which the annual returns and balance sheets shall be approved.
Accounting and Auditing
All companies registered in Cyprus have to keep statutory accounting and to be audited. Statutory accounts must be kept or verified by a resident qualified accountant. Accounts must be audited by an auditor licensed in Cyprus. CA Tsialoupis & Co can undertake all these services.
Non tax-resident companies are not liable for tax, provided that the directors do not reside in Cyprus, and that the companies does not conduct any business with natural or legal persons residing in Cyprus. Non-tax-resident companies can not benefit from Double Taxation Avoidance Treaties. Non-tax-resident companies must furthermore prove that their profit is subject to tax (in another country). Tax-resident companies pay 12,5 % corporate tax on their taxable income. However: income from dividends, appreciation of shares and bonds and from the purchase and sale of the aforementioned or from the sales of participations is not taxable. Double Taxation Avoidance Agreements fully apply. The profit that accrues from the exploitation of Intellectual Property is taxable at a favoured rate of only 2,5 %
Annual tax returns have to be submitted to the tax office. V.A.T returns have to be submitted quarterly. Provisional assessment returns have to be submitted till July 31 for the current year. The corporate tax expected for the current year has to be paid in 2 equal instalments till August 31 and December 31. The tax payer has the right and possibility to correct the estimated profit/tax with the second instalment. The second instalment will be calculated accordingly. If business is conducted with other EU countries, monthly VIES and INTRASTAT registrations are necessary and returns have to be submitted periodically.
Double Taxation Avoidance Treaties
Cyprus maintains Double Taxation Avoidance Treaties with more than 50 countries.
Duration of Incorporation
Provided that all necessary documents are presented and that there will be no delay from repeated name approvals (because a suggested name has already been taken), the incorporation of a company normally takes 10 – 12 working days.
Find out details about Cyprus Tax by downloading our annual publication Tax Facts 2015.
Important note: This article has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice from a qualified accountant.