Cyprus: Types of Company
Private Company Limited by Shares
The relevant legislation, the Cyprus Companies Law, Cap. 113, is based on the English 1948 Companies Act and has deviated from it very little. A private company is one whose articles:
- Restrict the right to transfer its shares
- Limit the number of its members to 50
- Prohibit 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) then introduced new provisions controlling the validity of company transactions and the information to be included in official company documents. The Companies (Amendment) Law of 2001, Law 76(I) of 2001 provided for a new system of certification of companies' auditors; the recognition of bodies of auditors; the grant of approval to auditors with foreign qualifications and the recognition of accountants' companies by the Council of Ministers.
When 100% foreign-owned, a private company was formerly known as an 'offshore company'; the term ’international business company’(IBC) is now preferred. However, from 1st January, 2003, an offshore company or IBC no longer has separate tax status; it is taxed according to the same principles as a regular company. IBCs are now allowed to trade inside Cyprus.
A bank reference and copy of the owner's passport is required to register a foreign-owned company. The bank reference must be issued by a bank included on the Central Bank of Cyprus's list of qualifying banks.
Information necessary to form a standard Cyprus offshore company is as follows:
- Company name with two alternatives
- Company objectives (description of principal activities of a Cypriot offshore company)
- Capital: for partnerships and private limited companies, there is no minimum level of starting capital.
- Full personal details of shareholders.
- Full personal details of directors (minimum of two).
Registering a standard Cyprus offshore company typically takes three weeks. The company's formation documents, accounts and annual return must be filed in Greek. As part of the EU accession process, amendments were made to the Companies Law in 2003, including the following:
- Every company must prepare a full set of financial statements in accordance with International Financial Reporting Standards. Every parent company that has one or more subsidiaries, other than a company that 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. A copy, signed by a director and the company secretary, must immediately be filed with the Registrar of Companies. Under article 121, the annual return filed with the Registrar of Companies must be accompanied by a 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, co-funded by the European Regional Development Fund and the European Union, allows users access to 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.