The Cyprus Limited Company
The Cyprus Limited CompanyThe Cyprus Resident vs. Non-Resident Company
A Cyprus company, under the Income Tax Law of 2003 (118(I) 2002) can be either Tax Resident in Cyprus or Non-Tax Resident.
The Cyprus Resident vs. Non-Resident Company
A Cyprus company, under the Income Tax Law of 2003 (118(I) 2002) can be either Tax Resident in Cyprus or Non-Tax Resident.
(i) Tax Resident Company
A tax resident company is a company whose management and control is exercised in Cyprus. Hence the majority of directors must be in Cyprus. It pays 12.5% tax on its worldwide business profits (5% on interest income, 0% on dividend income). It can claim relief under the Cyprus double tax treaty network.
(ii) Non-Resident Company
A non-resident company is a company where the management and control is exercised outside of Cyprus. Hence the majority of the directors must be outside Cyprus. A non-resident company is taxable at 0% on its worldwide income. Any income generated in Cyprus is taxed at 12.5%.
Company Name
The name of a company must be approved by the Registrar of Companies before the whole registration procedure commences. Names of Companies similar to existing company names are not approved.
Stavrou, Keravnos & Sofroniou LLC maintains a list of names already approved by the Registrar of Companies. The registration of the company may therefore commence immediately if one of those names is chosen. The list of already approved names is available on request.
Main Objects/Purpose of the Company
The main objects/purpose of the company must be stated in the first paragraphs of the proposed company’s Memorandum and Articles of Association.
We also require a detailed description of the intended objects of the company to be registered.
Shareholders
The minimum number of registered shareholders is one. The minimum beneficial shareholders are also one. Shareholders can either be individuals or legal corporate entities. Trusts may also be shareholders of a Cyprus company.
Shares maybe held by trustee companies for the benefit of beneficial shareholders to preserve their anonymity. Trust Deeds are signed by the trustee in order to completely safeguard the interests of the beneficial shareholders.
Our Law Firm can provide trustee entities for this purpose.
The identity of the beneficial shareholder is kept absolutely confidential if a nominee trustee is used.
Directors
At least one director is necessary. The directors may be local Cypriot individuals or foreigners. It is generally advisable to appoint local directors if one wishes to have effective management and control in Cyprus rendering the company resident in Cyprus for tax purposes. A corporate entity may act as a director.
The name, address, nationality, passport number and occupation of each director is required.
Nominee directors may be provided by Stavrou, Keravnos & Sofroniou LLC.
Secretary
An individual or a secretarial company must be appointed. Our Law Firm is willing to be appointed to act as secretary.
Registered Office
The registered office of the company must be in Cyprus. The registered office address is the official address of the company where the statutory books, registers, and the seal of the company should be kept. Summons and writs are also served at the registered office address.
Our Law Firm can be used as the registered office of client companies.
Timing
The time needed to register a company in Cyprus is a minimum of ten days upon receipt of all necessary documents and/or information needed. However, an accelerated service is available at the Registrar of Companies office whereby a company may be registered very quickly, provided of course the name of the proposed company has already been approved.
Incorporation Requirements
We require completion of our standard application form for the incorporation of a Cyprus Company (you can download it at the bottom of the current page).
In order to comply with our due diligence requirements and the relevant anti-money laundering legislation we request the following information from all shareholders above the Cyprus company leading up to the ultimate beneficial owners(s) or to a regulated entity in an approved jurisdiction. In addition to shareholders and beneficial owners, we request due diligence on any foreign directors appointed on the board of the company, bank signatories and instructing parties.
The documents required for the know-your-client (KYC) purposes for corporate entities include:
- Corporate certificates of incorporation, shareholders, directors, secretary and registered office.
- Memorandum and Articles of Association.
The documents required for the know-your-client (KYC) purposes for individuals include:
- A certified copy of a valid international passport.
- A certified copy of a utility bill as proof of residency.
- A bank reference letter.
- Nominee Shareholders
- Nominee Directors
- Company Secretary
- Registered Office Facility
- is required to prepare consolidated accounts, or
- is a Public Limited company, or
- fails to meet the small company criteria
Cost in Set up and operating a Cyprus Limited Company
The costs of establishing and operating a Cyprus IBC can be classed as follows:
1. Incorporation Costs One-off cost that depends on the capital of the IBC.
2. Representation Costs:
Annual fee (€350) payable on the 1st of January of each year.
This fee is time apportioned to 31st December in the year of incorporation.
3. Government Fee
Annual Return Filing Fee of €45 and Annual Professional Tax of €220 plus our fees for the submission and preparation of the statutory returns.
4. Administration & Accounting Time based fee. A quote is provided in advance.
5. Auditing and Reporting Time based fee
Time based fee is payable to third party local audit firm, a quote of which is provided in advance.
Accounting Records and Audited Financial Statements
(i) Company Law Requirements
The company Law requires that a company maintains proper accounting records in accordance with the International Accounting Standards.
The first reporting period can be up to 18 months from the date of incorporation. Financial statements for a 12-month accounting period have to be prepared annually after that. A Cyprus registered auditor is required to be appointed in the cases where the company:
(ii) Tax Returns
Tax resident companies have to prepare and submit their annual tax returns (IR4) to the Tax Authorities by 31 December following their year-end. The IR4 must be signed by a registered auditor.
Non-resident companies, although not required to submit an annual tax return, are still subject to the provision of the Company Law for the appointment of a Cyprus registered auditor.
(iii) Returns to the Registrar of Companies
All Cyprus companies must submit their audited financial statements (or unaudited when the Company Law exemptions apply) to the Registrar of Companies together with their annual return HE32.
Operating a Cyprus Limited Company
The operations of a Cyprus Company can be performed without the need for a fully-fledged office in Cyprus.
In the case where nominee directors are used for the establishment of the Company, the beneficial shareholders or the decision makers can be issued with specific Powers of Attorney to enable them to engage the Company into business activities as prescribed by the Memorandum and Articles of Association.
We undertake to perform the day-to-day activities of the Cyprus Company.
Banking in Cyprus
The bank accounts of a Cyprus Company can be opened in any jurisdiction worldwide. We strongly recommend the appointment of our Cyprus resident director as signatory to the bank account in order to demonstrate that management and control is exercised locally. The local bank signatory may have joint signatory authority with a designated individual as signatory to the bank account.
The banking system in Cyprus is highly developed and efficient, capable of coping with the ever increasing needs of the business community in a fast growing economy. Most of the banks in Cyprus offer the facility of internet and electronic e-banking.
The commercial banks of Cyprus have strong international connections, which enhance their ability to provide banking services on an international level.
Cyprus has very strict bank confidentiality laws. However, as part of the global anti-terrorism and anti-money laundering policy, the banks require to know the identity of the beneficial owner of the bank account.
To receive more information on a specific bank and its services or to receive account opening forms please contact us directly.
Download and fill our Form for a Cyprus Company