REGISTER A CYPRUS COMPANY
All you need to know about Registering a Company in Cyprus
Welcome to our dedicated portal for Registering a Company in Cyprus – Our team at D. Hadjinestoros & Co LLC can assist you in establishing your business in Cyprus.
In this website you can find everything needed in relation to company formation in Cyprus.
For other legal services you can visit our website at www.dhadjinestoros.com.
CONTENTS OF THIS PAGE
- Various Forms of Business Entities in Cyprus
- General Overview of the Cyprus Company
- Advantages of the Cyprus Company
- Specific Characteristics of a Cyprus Company
- Structure of the Cyprus Company
- Process of Registering a Cyprus Company
- Reporting Requirements of a Cyprus Company
- Share Capital for Setting Up the Company
- Documents to be submitted to the Registrar of Cyprus Companies
- Documents to be provided to us for Registering a Cyprus Company
- News & Insights
Various Forms of Business Entities in Cyprus
There are several ways by which investors (either local or foreign) may conduct business in Cyprus. These are through the following methods:
The Sole Trader
These are self-employed physical persons, who are taxed as individuals and who are personally liable for the debts of their business. A sole trader may also wish to apply at the Registrar of Companies for a business name (or trade name) to carry out the activities of its business. However, unlike registering a company in Cyprus, a trade name does not guard against personal liability.
There are two form of partnership in Cyprus used to conduct business. The General Partnership and the Limited Partnership.
A General Partnership is where two or more individuals actively manage the whole business. As with sole traders, the liability of the partners is unlimited, and they are jointly and severally liable for all of the debts of the partnership.
A Limited Partnership is similar to a general partnership to the extent that it must consist of general partners who are all responsible for all of the debts of the partnership. However, there are also limited partners. Limited Partners do not have active management or control of the business but they are akin to investors in the partnership’s business.
Other Forms of Business Entity
Other ways to conduct business in Cyprus is through the registration of a European Company, an Overseas Company or a European Economic Interest Grouping. These form of business entities are more specific and are not used as often as the Cyprus Company. You can find out more about these types of business entities by visiting the official site of doing business in Cyprus.
The Cyprus Company
There are different types of Cyprus Companies which can be registered in Cyprus. There are the, (a) Private Limited Company, (b) the Public Limited Company and (c) the Limited Company without Share Capital.
The most common way of doing business in Cyprus is through the Cyprus Private Limited Company.
At D. Hadjinestoros & Co LLC, we Have Accumulated Substantial Experience And We Advise And Litigate With Regard To All Aspects Of Corporate Law.
General Overview of the Cyprus Company
A company is a legal entity established under Chapter 113 – the Cyprus Company Law.
To register a company in Cyprus, the investors will need to decide on the persons who will be responsible for the everyday running of the company (called “the Directors”) and also on the person who will be the Secretary. The ownership of the company consists of shares. The people who owns the shares (called “the Shareholders”) will usually be the investors themselves.
The Directors, the Secretary and the Shareholders may be legal or physical persons.
In a Cyprus Company Limited by shares the liability of the shareholders is limited. This means that they do not have to contribute over and above the amount of the investment that they agree to make in return for their shares.
For this specific reason, establishing a Cyprus company, encourages entrepreneurial activity. In this respect, investors can limit the risks involved in conducting their business.
Given that it is the directors who are responsible for running the company; establishing a company in Cyprus limited by shares, allows for passive investments. This means that shareholders may decide not to play a role in the active management of the company by appointing directors who will do the work for them. This leads to a separation of ownership (shareholders) and control (directors).
Supervising Authority of Companies in Cyprus
The supervising authority for companies in Cyprus is the Registrar of Companies and Official Receiver (“Registrar of Cyprus Companies”). This department holds all the information of registered companies in Cyprus.
Access to Information
All the records relating to a registered company in Cyprus are public and can be accessed by anyone (either online or at the Registrar of Cyprus Companies’ premises). However, for the time being, in cases where the company uses nominee directors or shareholders, the information as to the ultimate directors or ultimate shareholders (the ultimate beneficial owners) is not publicly available.
Shares in Cyprus Companies
The minimum share capital of a Cyprus Private Company is €1 euro. In practice, the usual share capital of a newly registered Cyprus Company is €1000 shares of 1 euro each. For a more information on the minimum share capital of a company please click here.
The Memorandum and Articles of Association of a Cyprus Company
When registering a company in Cyprus, it is necessary for a lawyer to prepare and submit to the Registrar of Cyprus Companies the Memorandum of Association and the Articles of Association.
Memorandum of Association
The Memorandum of Association contains the purposes (objects) of the company. It is signed by the members i.e. the shareholders and it contains the name of the company, the names of the members as well as the amount of shares each hold in the company.
Articles of Association
The Articles of Association contains information relating to the internal affairs of the company such as the voting rights of the members, how the accounts and audits take place, the appointment of the directors, information about shareholders’ meetings, the companies seal as well as other information which relate to the running of the company.
Shareholders’ Meetings and Board Meetings
A Shareholders’ meeting or General Meeting is a meeting held by the shareholders of a company for the purposes of voting on a specific subject matter. For example whether the appoint or remove directors from the board.
Board Meetings are meetings held by the Directors of the company for the purposes of voting on a specific subject matter. For example a decision whether to buy an asset for the company or not.
Shareholders’ meetings as well as directors’ meetings need not take place with the physical presence of the shareholders or the directors.
Annual Shareholders’ Meetings
All Cyprus Companies must hold an Annual General Meeting. The first must be held within 18 months from the formation of the company. Thereafter it must be held yearly.
At the Annual Shareholders’ Meeting, the shareholders decide on the approval of a number of things. Firstly, they decide on the approval of the audited financial statements of the company. Secondly, they decide on the election of the Board of Directors and the appointment of the auditors and Thirdly, on the dividends payable as proposed by the Board of Directors.
Obligations of a Cyprus Company
A company in Cyprus has several reporting obligations. These include, accounting and auditing obligations, maintaining specific corporate documents and other registers in its registered office as well as obligations to provide copies and reports to the Registrar of Companies. For more information on these reporting obligations of Cyprus Companies you may click here.
Advantages of the Cyprus Company
A Cyprus Company has several advantages. They are the following:
Specific Characteristics of a Cyprus Company
A Cyprus Company has several characteristics. They are the following:
Structure of the Cyprus Company
Every company in Cyprus must have the following:
1. A registered office address in Cyprus
A company registered in Cyprus must have its registered office in Cyprus. That is, a physical location in Cyprus where its registered office is located. It is noted that the registered office need not be a fully functioning office with premises and equipment for accommodating the activities of that specific company. It is merely a legal requirement that any company registered in Cyprus must register an office at the Registrar of Cyprus Companies.
The office is used for example in order to abide to certain legal requirements such as keeping its financial records, a register of the members, register of directors, register of charges etc.
A company in Cyprus must also appoint a secretary. The secretary may be a legal or a natural person and must be resident in Cyprus. The Secretary is responsible for keeping an up to date Register of Members, Register of Charges, Register of the Directors and Secretary, the Company Seal and must keep minutes in the company’s meetings.
A Cyprus Private Company must have at least one director. The director may be a legal or natural person. If the company has only one director then it cannot be the same as the secretary. This is unless the company is a single person company. i.e. where the director, the shareholder and the secretary are one and the same persons.
In the case of a Cyprus Public Companies, there must be at least two Directors.
It should be noted that the directors may be of any nationality. However, if the Cyprus company is to enjoy the tax advantages offered, it is necessary for the management and control of the company to be exercised in Cyprus. This means that key decision making must be made in Cyprus. If the directors are tax resident in Cyprus that would generally mean that the management and control is exercised in Cyprus.
A Cyprus Private Company must have at least one shareholder. The shareholder may be a legal or natural person. The maximum number of shareholders in a private company is 50. In a Cyprus Public Company, the number of shareholders is at least 7 and there is no limit to the number of shareholders.
The shareholders may be of any nationality.
A note as to the directors and shareholders: A nominee shareholder or nominee director may be appointed in any Cyprus company. This can be a lawyer or an accountant. For further information please click here.
At D. Hadjinestoros & Co LLC we have accumulated substantial experience in corporate services and we advise with regard to all aspects of corporate law.
We have also acted for clients in relation to mergers and acquisitions, takeovers, acquisition of companies in Cyprus and abroad, capital raising, corporate reconstructions, schemes of arrangement, reduction of capital, formation and registration of companies, due diligence checks, shareholders’ disputes, full spectrum of corporate contracts and commercial agreements.
Our services do not only include corporate litigation but we also offer a wide range of corporate services such as representation services, secretarial services or bank support services.
We can act for the registration of different kind of companies in Cyprus. You can contact us and we will get back to you as soon as possible.
Process of Registering a Cyprus Company
When Registering a Cyprus Company, one can follow the expedited procedure or the normal procedure. The normal procedure is hardly ever used given the substantial difference in time required to use the normal procedure as against the small difference in the fees involved when proceeding with registration of a Cyprus Company under the expedited procedure.
Application for a Company Name
The first step required for the registration of a Cyprus Company is applying for a unique company name. The application for a name will usually take between 7 to 10 working days depending on the workload of the Registrar of Companies.
Rejection of Company Name
The Registrar approves or rejects applications for company name approval according to several factors (including similarity with other names or where a name is misleading). For this reason, it is important for the client to apply for 2-3 different names so that, in case one is rejected the others are approved.
Special Conditions for Approval of Name
Any name which includes words such as International, National, Republic, EU, Europe, Euro, International are only approved with specific caveats and in special circumstances.
License from Supervising Authorities
Furthermore, names which contain the words Bank, Trust, Insurance Broker all require a license from the respective Supervising Authority (for example the Insurance Company Control Service) prior to the name being approved.
Form Completion and Signature
Whilst the name is approved, we will require from you to complete specific forms relating to our Know Your Client Requirements. With these form we require your personal information to be submitted to us in order to comply with the law.
Furthermore we will require you to sign all documents which will be submitted to the Registrar of Cyprus Companies.
Application for Registration of the Cyprus Company
As soon as the name is approved and the required forms are completed and signed, then the application for setting up the new company is filed at the Registrar of Companies. It should be noted that the usual time frame from the moment of submitting a company to the date of its registration is approximately 5 to 7 working days.
Other Legal Services
Reporting Requirements of a Cyprus Company
A company in Cyprus has the following reporting obligations:
Accounting and Auditing obligations
A Cyprus Company must prepare financial statements in line with IFRS reporting standards. These financial statements must also be audited.
Furthermore, it must file an annual return to the Registrar of Cyprus Companies. The General Meeting must meet annually for this purpose. The annual return must be filed 28 days after holding the Annual Shareholders’ Meeting. A copy of the annual report must be kept in the company’s registered office.
Additionally, a company must keep proper books and records and after every quarter, a company in Cyprus must file its VAT reports.
All financial records must remain in the Company’s Registered Office and should be available from inspection by the Cyprus Tax Authorities.
Keep specific Corporate Documents
A company in Cyprus must keep in its registered office the Memorandum and Articles of Association, Certificate of Incorporation, Certificate of Shareholders, Certificate of Directors and Secretary as well as the Certificate of its Registered Office.
Furthermore, it must maintain in its Registered Office the minutes relating to general meetings held by the shareholders of the company.
Maintain specific Registers
Under the law, a Cyprus Company is also obliged to keep specific registers. These include, the Register of Directors, Secretaries, Shareholders and Charges. In these registers, records of all existing and previous persons or charges are held.
Obligations to Provide copies and reports to the Registrar of Cyprus Companies
Furthermore, a Company Registered in Cyprus owes obligations of providing copies and reports to the Registrar of Companies (for example specific resolutions passed by the General Meeting).
The minimum share capital of a Cyprus private company is €1 euro. However, in practice the usual share capital of a newly incorporated company is €1000 euro. The share capital need not be paid immediately and may be paid at any stage after the incorporation. Note that specific conditions apply in case the company performs specific activities licensed by the Cyprus Securities and Exchange Commission or where the company is Public. If the company is a public company then the minimum share capital is €25,630.
There are other types of businesses which do not require fulfilment of share capital conditions. These are the cases for example when the type of business is a sole trader, a partnership, or a limited partnership. You can view more information on these types of businesses here.
Documents to be submitted to the Registrar of Cyprus Companies
A number of documents must be submitted to the Registrar of Cyprus Companies prior to registration of a company in Cyprus. They are the following:
- Form HE1. This is an affidavit signed by the lawyer at the Registrar of the District Court.
- Form HE2. This is a form which states the registered office address of the company.
- Form HE3. This form lists the directors and the secretary of the Company. We note that if the company is Public then form HE5 must be submitted. HE5 is a list of persons who consent to act as directors of the company.
- Two sets of original Memorandum and Articles of Association must also be provided to the Registrar of Cyprus Companies in Greek. These must be prepared by a practicing lawyer who must also sign them. They can also be submitted in English, if they are supported by an affidavit of the person translating them. In such a case two sets of the Memorandum and Articles of Association are submitted in English as well as Greek. The Memorandum and Articles of Association must bear the signature of the shareholders and also a witness.
On the Registration of the Cyprus Company, the Registrar of Cyprus Companies will issue the following documents:
- Certificate of Shareholders
- Certificate of Directors and Secretaries
- Certificate of Registered Office
- Certificate of Incorporation
- A certified true copy of the Memorandum and the Articles of Association
News and Insights
Documents to be provided to us under Know-Your-Client-Procedures for Registering a Company in Cyprus
In order to set up a company in Cyprus a lawyer must perform the Know-Your-Client procedures under applicable Anti-Money Laundering Laws and Regulations in Cyprus. This means that the clients will need to provide us with documentation and fill in specific forms for the purpose of being able to register the company and act as Cyprus company service providers.
The documents below should be sent to us by scanned copy first. Then the originals should be sent by post.
Documentation required from the Shareholders (or the Ultimate Beneficial Owners), Directors and Secretary of the Company depend on whether they are physical persons or legal entities (for example companies), and they are the following:
In case the shareholders, directors or secretary are Physical Persons
For each person in the newly registered company:
- A certified copy of the Passport showing the passport number, photograph, date of birth other personal details and signature of the individual.
- A certified (and translated into English) recent Utility bill (not older than 3 months) showing the physical address of the individual.
- CV of the individual.
- A reference letter from the Bank (not older than 3 months) (this is always required for shareholders).
- A Company-Client Questionnaire
- A Due Diligence Form duly completed and signed for individuals.
- A Source of Wealth Form duly completed and signed for individuals.
In case the shareholders, directors or secretary are Legal Persons
For each legal entity in the newly registered company:
- A certified copy of the certificate of incorporation, registered office and certificate of shareholders, directors and secretary or similar document.
- A certified copy of the Memorandum and Articles of Association or similar document.
- Reference Letter from a Bank, Accountant, Auditor or Lawyer.
- Certificate of good standing.
- All documentation required from Physical Persons for all the Shareholders, Directors and Secretary of the Legal Person.
We note that in case the incorporators remain abroad, we will require them to sign the Memorandum and Articles of Association and send the originals to us.
Certification: The certification of the passport and the proof of address must be in the English language and be certified by the person who translated them in English (as being a true translation of the original). Furthermore, they need to be certified by a lawyer, accountant or auditor, notary public, bank manager or embassy official.
The person certifying the document must provide his/her name, address and profession on the certified document.