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Key Features of Cyprus Entities
Before any other steps are taken with regard to the Cyprus company registration, the Registrar of Companies must be approached to ascertain whether the name by which the company is proposed to be incorporated is acceptable.
It is desirable to submit for approval to the Registrar two or three alternatives to the first choice of name, as experience has shown that this can save time. Where the proposed Cyprus company is intended to have a similar name to that of its parent company, the Registrar will require the consent of the parent company for the use of such name.
There is no legal requirement as to the minimum or maximum share capital of the company. It is recommended that the authorised share capital should be at least or approximately €1.000 which may conveniently be divided into 1.000 shares of €1 each. There is no minimum paid up capital requirement. Class of shares can be registered shares, preference shares, redeemable shares and shares with or without voting rights.
The powers in a company are distributed between the board of directors and the shareholders as stipulated in the Articles of Association. The power of the directors can therefore be as wide or narrow as the Articles provide except that the exercise of certain powers are specifically reserved for the shareholders. For example, the shareholders always have the right to remove directors. Cyprus companies must have at least one shareholder. Shareholders may be either corporate or physical persons (individuals), residents of Cyprus or foreigners.
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 the 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.
The appointment of the secretary is made by the directors and the articles of association should normally contain an appropriate provision to this effect. The existence of a secretary is a requirement of the law. For practical purposes a body corporate (i.e. a company) may be appointed secretary. A number of secretarial companies which can act as secretaries to Cyprus companies are available and operate satisfactorily.
The powers in a company are distributed between the board of directors and the shareholders as stipulated in the Articles of Association. The power of the directors can therefore be as wide or narrow as the Articles provide except that the exercise of certain powers are specifically reserved for the shareholders. For example, the shareholders always have the right to remove directors.
The company must have at least one director, and they can be either corporate or physical persons (individuals). Although there is no requirement that the director(s) are local, we strongly recommend that the majority are Cyprus residents, so that the company is considered to be a tax resident of Cyprus.
Every Cyprus company must maintain accounting records that enable the preparation and audit of financial statements that show a true and fair view of the company’s financial position and performance in accordance with International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS).
The accounting records must be held either at the registered office or at another place in Cyprus and must always be available for inspection by the directors.
The financial statements must be accompanied by a report of the board of directors which includes:
- details of any changes in the nature or volume of operations
- any changes in the share capital
- any significant change in the constitution of the board of directors or the duties assigned to its members
- directors’ proposals regarding the distribution or not of the retained profits
Failure to comply with these requirements leaves the directors open to prosecution with the possibility of a fine of up to €10.000 and imprisonment of up to 12 months. The financial statements must be audited by a registered auditor.
Popular use of Cyprus companies
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Oneworld Ltd which employs a team of 75 professionals and corporate administrators provides incorporation, fiduciary, management, banking, accounting, redomiciliation services, as well as setting up and administering private funds and trusts. We advise on tax planning, incorporate and administer companies in zero and low tax jurisdictions and provide boutique services including citizenship and residency services.
Oneworld ltd is licensed by CySEC (license 146/196) as an ASP (Administrative Service Provider).
75 Prodromou Avenue,
Oneworld Parkview House
2063 Nicosia, Cyprus
P.O. Box 25207, Nicosia 1307