On this Page:
- Cyprus Private Company Limited by Shares
- Cyprus Exempt Private Company
- Cyprus Public Company Limited by Shares
- Cyprus Company Limited by Guarantee
- Cyprus Branch of Overseas Company
- Cyprus General Partnership
- Cyprus Limited Partnership
- Cyprus Sole Proprietorship
- Cyprus Trusts
Cyprus Private Company Limited by Shares
The relevant legislation is Cyprus Companies
Law, Cap. 113, which is virtually a copy of
the English 1948 Companies Act. A private
company is one which by its articles:
- Restricts the right to transfer its shares
- Limits the number of its members to 50
- Prohibits any public subscription to shares
or debentures
The Companies (Amendment) Law of 2000 (Law
2(I)/2000) introduced single-member companies.
The Companies (Amendment) (No. 3) Law of 2000
(151(I)/2000) introduced new provisions as
to the validity of transactions of companies
and as to the information which must be included
in the official documents of companies. The
Companies (Amendment) Law of 2001, Law 76(I)
of 2001 provided for a new system for the
certification of companies’ auditors and for
the recognition of Bodies of Auditors and
the grant of approval to auditors with foreign
qualifications and also the recognition of
accountants' companies by the Council of Ministers.
When 100% foreign-owned, a private company
used to be referred to as an 'offshore company', although the expression International
Business Company subsequently came into favour
to describe such entities. However, as from
1st January, 2003, an offshore company (IBC)
no longer has a separate taxation status,
and is taxed according to the same principles
as a regular company. IBCs are now allowed
to trade inside Cyprus. A pre-existing IBC
which made an irrevocable commitment not to
trade inside Cyprus until 2006 was able to
claim the existing low tax rate for the three
years 2003, 2004 and 2005.
In order to form a foreign-owned company,
a bank reference and copy of the owner's passport
is required for the registration. The bank
reference must be issued by a bank included
on the Central Bank of Cyprus's list of qualifying
banks.
The following information will be required
for the formation of a standard Cyprus offshore
company:
- Name of the company with two alternatives;
- Objects of the company (description of
principal activities of a Cypriot off-shore
company);
- Capital: a minimum of (the Euro equivalent
of) CYP 1,000 for a company with no offices
in Cyprus, or (the Euro equivalent of) CYP
10,000 for a company with offices in Cyprus.
Payment of the capital can be extended in
time.
- Full personal details of shareholders
will be necessary.
- Full personal details of directors (minimum
two) will be necessary.
Registration of a standard Cyprus offshore
company takes three weeks typically.
In Cyprus, a company's formation documents
and its annual return must be filed in Greek;
the same applies to accounts when these need
to be filed.
Amendments made in 2003 to the Companies
Law as part of the EU accession process included
the following changes:
- Every company must prepare a full set
of financial statements in accordance with
International Financial Reporting Standards,
and every parent company that has one or
more subsidiaries, other than a company
which is itself a wholly owned subsidiary,
should present consolidated financial statements.
- Under article 120, every company must
complete an annual return within a period
of 42 days from the date of its Annual General
Meeting and must file immediately with the
Registrar of Companies a copy of the annual
return, signed by a director and the company
secretary. Under article 121, the annual
return filed with the Registrar of Companies
must be accompanied by the full set of financial
statements.
An online company search system was launched
by the Ministry of Trade, Commerce and Tourism
in February 2011. The system, which is being
co-funded by the European Regional Development
Fund and the European Union, allows users
to access information about companies already
registered with the Registrar of Companies
and Official Receiver. Users can view data
regarding company directors, shareholders,
partners and owners, registered addresses,
and the charges and mortgages registered on
company assets.
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Cyprus Exempt Private Company
A private company limited by shares is exempt
if:
- No body corporate other than another exempt
company holds any of its shares or debentures
- The number of debenture holders is not
more than 50
- no body corporate is a director of the
company.
The main advantages of an exempt private
company are:
- It need not file accounts with its Annual
Return
- It is not subject to the statutory restrictions
on loans to directors
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Cyprus Public Company Limited by Shares
Any company registered under the Act whose
Articles do not contain the restrictions applicable
to private companies is a public company.
A public company may obtain a listing on the
Cyprus Stock Exchange.
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Cyprus Company Limited by Guarantee
As in England, companies limited by guarantee
are normally used only for charitable or non-profit-making
purposes. Apart from their share structure,
they are similar to other types of private
company and also fall under the Cyprus Companies
Law.
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Cyprus Branch of Overseas Company
Any overseas company may operate in Cyprus
as a branch. Within one month of establishment
of such a branch, the following documents
must be filed (in Greek) with the Registrar:
- A certified copy of the Memorandum and
Articles of Association
- A list of the directors and secretary
- The names and addresses of persons residing
in Cyprus authorized to accept all notices
on behalf of the Company.
Companies with branches in Cyprus must also
file their accounts annually, together with
certified Greek translations.
Company law changes implemented in 2003 as
part of the EU accession process include the
following rules covering branches:
- Every foreign corporation that maintains
a branch in the Republic must submit, for
every financial year, copies of its financial
statements as presented in its last AGM
and published in accordance with the laws
of the country of incorporation, except
that EU corporations that publish audited
financial statements in their countries
of registration and submit these financial
statements to the Registrar of Companies
are exempted from preparing and submitting
separate branch financial statements.
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Cyprus General Partnership
Partnerships fall under the Partnerships
and Business Names Law Cap 116, basically
similar to the equivalent English legislation.
They must be registered with the Registrar
of Partnerships within one month of formation,
giving name, purposes, place of business,
full particulars of the partners etc. Foreigners
may belong.
A general partnership may have between 2
and 20 individual members (up to 10 only,
if it intends to conduct banking business).
Partnerships do not need to file accounts
or to be audited.
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Cyprus Limited Partnership
These are similar to general partnerships
except that they have one or more general
partners with unlimited liability and one
or more limited partners (whose liability
is limited to the amount declared in the partnership
return filed with the Registrar).
Limited partnerships, used in conjunction with offshore
companies offer good tax planning possibilities.
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Cyprus Sole Proprietorship
A Sole Proprietorship falls under the Partnership
and Business Names Law Cap 116, 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, and any business name (other
than his own) must be registered with the
Registrar of Partnerships.
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Cyprus Trusts
Local Trusts
A 'local trust' is governed by the Cyprus
Trustees Law Cap 193, which closely follows
the English Trustee Act 1925. The settlor
and beneficiaries are normally residents of
Cyprus, and the trust and its property are
subject to exchange controls, although these are vestigial
since Cyprus joined the EU.
Offshore Trusts
Offshore Trusts are the same as local trusts,
but their beneficiaries must be non-resident,
and all the trust's activities must be outside Cyprus.
As with 'offshore' companies, the special
tax status of offshore companies has ceased
with Cyprus's accession to the EU.
International Trusts
The International Trusts Law of 1992 brought
Cyprus trust law into line with that of other
major international trust jurisdictions. Both
settlor and beneficiaries must be non-resident,
although one Trustee must be Cypriot. International
trusts may have many tax and legal advantages.
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