For most sectors, there are no restrictions applicable to direct investments in Cyprus or investments via Cyprus by natural or legal persons from EU Member States or third countries. Also, there are no longer any special or offshore regimes in Cyprus.
This means that Cyprus Entities, whether beneficially owned by foreign nationals or local persons, can engage immediately into either local or international activities without restrictions or differentiation or the need for any special permission.
Businesses can either:
* Establish their own offices immediately without any special permit being needed to that effect (& with additional use of our support services) or
* Rely solely on provision of registered office, agents & contract administration services.
The procedure for the incorporation of a Cyprus Legal Entity can be completed within a maximum period of two weeks at the most, and enables the legal entity to start business forthwith.
The company name name must be officially approved by the Registrar of Companies. On applying to the Registrar for the approval of a name, it is recommended that two or three possible names ending with the word “limited” be submitted as this may avoid unnecessary delays. Applicants should however, bear in mind that a name is not likely to be approved if:
* it is similar to the name of an existing company
* it is considered misleading or confusing
* it implies links with royalty
* it includes the word “Imperial”, “National”, and “Corporation, Commonwealth “ or Co-operative.
Where a subsidiary company proposes to adopt the name of its parent company, the latter must furnish its written consent for the use of its name. Once the approval of the Central Bank has been obtained, the next step is the registration of the company.
For a company to be registered, the following documents and information must be filed with the Registrar of Companies:
(a) The Memorandum and Articles of Association. The Memorandum must state, among other things, the following:
o The name of the company with “Limited” as the last word
o The situation of the registered office
o The objects of the company, which it is advisable that they should be as wide as possible so as to enable the company to engage in any kind of business or activity, without this being “ultra vires” (beyond the powers of) the company and, therefore voided.
o A statement that the liability of the members is limited by shares or by guarantee, when applicable.
o The amount of the share capital and details of the shares authorized to be issued, and
o The subscribers to the memorandum together with the number of shares for which they have subscribed.
(b) The Articles of Association which generally govern the company’s internal procedures and functions.The articles contain rules governing the internal management of the company and regulating the rights of its members among themselves.
The articles may be altered or added to by means of a special resolution, which requires a majority vote of over 75 per cent of the members. The articles deal with matters such as:
o General meetings of the company
o Voting rights of members
o Transfer of shares
o Appointment and powers of directors
o Dividends
o Accounts & Audit
o Specimen memorandum and articles of association, which have been prepared after careful study by lawyers and Focus Business Services, can be made available, but care should be taken that the first few main objects’ clauses are tailored to the specific circumstances and the main business objects of the company.
(c) A list of the directors and the secretary’s name and details. A minimum of one director is required, but there is no maximum. Although there is no necessity to have local directors, this is advisable especially where the provisions of a double tax treaty are going to be utilized; and it is important to show that the company is effectively managed and controlled from Cyprus (tax resident in Cyprus) and that all company decisions are taken in Cyprus. Also, for practical reasons, it is recommended that the Secretary is a Cyprus resident. Directors can also act as Secretaries, but a sole Director cannot act as a Company Secretary, except only in the case of a “one shareholder – one director – one secretary company” when one person can indeed act in all three aforementioned capacities.
(d) The address of the company’s registered office, which will be the place where all official notices will be served.
(e) A declaration or affidavit from a lawyer confirming that all formalities provided by The Companies’ Law have been complied with in relation to the incorporation in question.
Once all the required documents have been lodged with the Registrar of Companies and he has satisfied himself that they are in order, he will issue a Certificate of Incorporation. The formation and registration procedures, including printing of all official stationery and opening the necessary bank accounts, can usually be completed within a period of two weeks, whereupon the company can start operating immediately.
Period Needed for Registering a Company
The formation and registration procedures, including various administrative needs such as printing of the company’s letterheads; opening of statutory books and the opening of the required bank accounts, up to the time the certificate of incorporation is issued, can normally be completed within a period of two weeks.
Certificate of Incorporation
Once the Registrar of Companies has been satisfied that the documents lodged – in relation to a proposed company – are in order, a certificate of incorporation will be issued, whereupon the company becomes a corporate body, having an independent legal existence quite distinct from its shareholders. Each company’s file is available for public inspection at the office of The Registrar of Companies (details of directors, company secretary, registered office, charges, shareholders [see anonymity below], annual returns – required to be submitted once a year accompanied by the financial statements – Memorandum & Articles of Incorporation etc.).
Share Capital Requirements
There is no legal requirement as to the minimum or maximum share capital of the company. However, we recommend that the authorized share capital should be at least C£5.000 (or approximately €8.750), which may conveniently be divided into 5.000 shares of C£1 each. Not all of these shares have to be subscribed for.
Shares cannot be issued to the bearer. Also, there is a special kind – classes of shares with preferential rights or not may be issued.
Shareholders – Anonymity of Beneficial Owners
The liability of shareholders is limited to the nominal value of their share participation.
Under Cypriot law, every company, limited by shares, must have at least one shareholder (and maximum fifty for private companies). If anonymity is required, the shares may be held by authorized trustee companies (Focus Business Services authorized trustee companies) in trust for the beneficial owners without public disclosure of the owner’s identity. In this case, typically a Declaration of Trust, a pre-signed blank Instrument of Transfer and the Share Certificates are issued and certified at The Ministry of Foreign Affairs for authenticity and delivered to the beneficiaries.
The following information is required for each shareholder:
* Full name
* Residential and business address
* Date of birth
* Nationality
* Occupation
* Copies of passport or id if EU Nationals
* For corporate shareholders, copies of the statutory documents and the most recent financial statements.
Directors
The minimum number of directors is one without maximum number stipulated by the law. Directors may be local or foreign, individuals or legal persons and alternate Directors may be appointed. Meetings of the board of directors, as well as shareholder meetings, can be held in Cyprus or abroad.
Subject to certain statutory disqualification and restrictions, the manner of appointment of directors is laid down in the articles of association. Whatever these may provide, the ultimate control of the directors’ appointment and removal, vests with the members of the company.
The articles of association may, in certain cases, name the first directors of the company, who thus become directors from the date of incorporation. Alternatively, and more commonly, the articles may provide that the names of the first directors be determined by the subscribers to the memorandum – who in fact are the first members. An appropriate resolution signed by the subscribers is required and the persons named by the subscribers become directors on the date this resolution is signed.
From a tax planning point of view, it is usually important that the company is managed and controlled in Cyprus and, accordingly, it is recommended that the majority of the directors appointed are Cyprus residents. It is sometimes desirable that non-Cypriot resident directors are also appointed, but it is advisable that the number of these is always below the minimum number necessary to constitute a quorum. The quorum necessary is normally stated in the articles of association of the company.With regard to the appointment of directors the following particulars are required:
* Full name
* Residential and business address
* Date of birth
* Nationality
* Occupation
* Copies of passport or id if EU nationals
* Other directorships in Cypriot companies
* Corporate documents
It is advisable to ensure that upon the incorporation of the company its beneficial owners or other appropriate officials are provided with copies of all corporate documents, properly legalized and translated where appropriate, from Greek into English or any other language.
Such corporate documents normally comprise:
* Certificate of incorporation issued by The Registrar of Companies.
* Memorandum and articles of association – official copy certified by The Registrar of Companies.
* Address of the company’s registered office issued by The Registrar of Companies.
* The list of directors, secretary and shareholders issued by The Registrar of Companies.
* A Declaration of Trust, a pre-signed blank Instrument of Transfer and the Share Certificates certified at The Ministry of Foreign Affairs for authenticity.
* Statutory and other necessary minutes of the meetings of the directors and shareholders letterheads, invoices and other company stationery.
* Any other documents pertaining to the company’s activities up to the date of its establishment.
* Company Seal.
Stamp Duty
Stamp duty is payable on the registration of a company and its level depends on the authorized share capital of the company (= 60 CYP + 0.6% of Authorized share capital).
Appointment of Secretary (refer to section “Services”)
The Law requires the appointment of a Secretary. The Secretary is appointed by the directors and the articles of association should normally contain an appropriate provision to this effect. For practical purposes, a body corporate (i.e. a company) may be appointed secretary (member of the Focus Business Services Group).
Registered Office (also refer to section “Services”)
Every company must have a registered office from the day it commences business or from the fourteenth day after its incorporation, whichever is earlier. The registered office is the place where writs, summonses, notices, orders and other official documents can be served upon a company. The registered office is usually the place where the company’s Register of Members is kept, unless the company informs the Registrar of Companies of another place. Focus Business Services can provide the registered office.
Bankers, Currency and Signatories (also refer to section “Services”)
The company may open bank accounts with any bank in Cyprus or worldwide, in most of the main currencies and have money transfers effected without foreign exchange restrictions. Bank signatories can be provided locally, if necessary. Focus Business Services can facilitate the opening of bank accounts due to our capability as approved official introducers of a number of prestigious banks and financial institutions in Cyprus, the UK, Switzerland, Luxembourg, and worldwide.
Day-to-day Management of the Company
Focus Business Services can be instructed to deal with all the day-to-day activities of any company, such as bank account monitoring, processing of bank transfers, payroll preparation, invoicing, preparation and review of agreements, book-keeping, preparation of management reports and statutory financial statements, company secretarial and administration, tax and financial advice and other accounting and business administration.
Published by Lowtax.net
