Corporate Law in Cyprus refers to the set of laws and regulations that govern the formation, operation, and dissolution of corporations in Cyprus. The primary source of corporate law in Cyprus is Companies Law (Cap 113), which sets out the rules for the incorporation and operation of companies in Cyprus, as well as the rights and obligations of shareholders, directors, and officers. In Cyprus, corporate law also covers topics such as share capital, corporate governance, mergers and acquisitions, and liquidation.
Company
A company is a legal person established under the provisions of the Companies Law (Cap. 113), for conducting any legal activity. It is an independent legal entity. In other words, it is a distinct and separate person from the persons who establish or manage it. Therefore, the members of the company are not personally liable for its debts or for any other obligations of the company and no action can be brought against them by the company’s creditors.
There are several reasons why someone might consider opening a company in Cyprus:
Steps to opening a Company:
Cyprus company formation is a term used to describe the process of forming a legal entity known as the Company in the Republic of Cyprus. The same concept is referred to as company registration or incorporation.
Incorporating a business in Cyprus is easier and faster than in most other European countries. The process begins with an application for name approval, and the Registrar of Companies then registers a company. Within 10-15 days, the company will be formed.
Company formation refers to the procedures and commitments made prior to the incorporation of the company. The preparation of the Memorandum and Articles of Association, which include the company’s rules and the directors’ duties, is required for company incorporation.
The procedure for forming a company in Cyprus begins with the appointment of a licensed lawyer who will prepare all necessary incorporation documents and register the company. Only licensed Cyprus lawyers can prepare and sign the company registration documents under Cyprus Companies Law.
Each company’s existence begins with the Registrar of Companies issuing the certificate of incorporation.
All Cyprus companies are registered with the Cyprus Registrar of Companies, who is responsible for maintaining the Register of Companies and must be informed of any company changes.
The first step is to submit an application for approval of the desired company name. The abbreviation Ltd or Limited appears at the end of the company name. The name cannot be too similar to the name of an existing company.
Furthermore, the following will be permitted only in exceptional circumstances for valid reasons:
National, international, democracy, Europe, Euro.
The words cooperative, municipal, privileged, and acknowledged should not be used in names.
Names containing a primary name that is not the small name and/or the surname of one of the directors or shareholders will be permitted only if they are provided and there are reasonable grounds for accepting them.
Names containing the following words will be permitted only if justified: Bank, Banking, Investing, Trust, Insurance, and Broker.
The name of a related company is not accepted unless written permission is obtained.
To get easier Cyprus company name approval from the register, we usually recommend using unique names and adding the owners’ initials in the front.
The name approval process takes 3-5 business days.
The following documents must be prepared by the lawyer and submitted to the Registrar of Companies for the registration of a Cyprus company:
Articles of Association
Memorandum
A statutory declaration by Lawyer (HE1)
Forms HE2 and HE3
The name approval process takes 3-5 business days.
The following provisions must be included in the articles of association of each Cyprus company:
It must include the Company’s approved name.
It must describe the Company’s business activities.
The company’s activities cannot be illegal. A company has the right and authority to carry out only the operations specified in its articles of incorporation. We recommend writing the articles in broadway and adding extra activities to engage in extra business activities as needed.
It must state that the liability of its members is limited.
The company has a separate legal personality, which means that its members/shareholders bear no personal liability if the company encounters problems.
It must state the amount of share capital that the Company intends to subscribe for and how it will be divided into shares of a specific size. The typical share capital is 1000 ordinary shares with a nominal share value of one euro.
A Cyprus company’s Memorandum is the document that establishes the rules that govern the company’s operations. They bind the company and its members, and are essentially an agreement of each member of the company to comply with the provisions of these two documents.
Lawyer’s Statutory Declaration (form HE1)
The form HE1 is an affidavit from the lawyer confirming that he has prepared all company documents in accordance with Cyprus company law.
Form HE2 – Registered office of the company
The registered office address is provided on form HE2. Every Cyprus company is required to have a registered address in Cyprus. The lawyer can optionally provide this as a service. All official notifications to the company can be served at this address.
Form HE3 – Company Director and Secretary
The company’s officials, director, and secretary are listed on the HE3 form. Every corporation must have at least one director and one secretary. More directors can be appointed.
The director does not have to be a shareholder and can be any natural person or company. The secretary is in the same boat. Both of the aforementioned services may be provided by licensed lawyers.
Submission of documents to the Cyprus Registrar All of the above documents are submitted for approval to the Cyprus Registrar of Companies. The following certificates are issued upon approval:
Incorporation
Directors and the secretary
Registered address
Shareholders
Memorandum and Articles of Association
The company’s certificates can be in either English or Greek. There is a fee for having the Articles and Memorandum in English.
The approval and registration of the company take 10-15 working days after submission.
The government fees required for a Cyprus company formation and registration are the following:
Registration with the Revenue Department
Every business must be registered with the Tax Registry. This must happen within sixty (60) days of the company’s establishment. On registration, a tax identification number (TIN) is given.
A company must also be included in the VAT register in certain circumstances:
When the total value of taxable goods and services transactions exceeds €15,600. This is calculated over the previous 12 months or for the next 30 days.
A trader who makes taxable supplies totaling less than €15.600.
Intentional traders who intend to make taxable supplies in the future.
Companies conducting transactions outside of Cyprus. This is permitted as long as they are managed and controlled in Cyprus.
Every employer is required to register in the Social Security Services Register of Employers.
Trademark registration is also essential. This is done to protect the company’s rights and to distinguish products and services on the market.
Any change must be reported to the Companies Registrar by the company. These are some examples:
In addition, the company prepares and submits the annual return once a year (HE32). This is accompanied by a copy of the financial statements.
Furthermore, the company is required to pay the annual levy of € 350. (until June 30 of each year).
Advice as to the most efficient Cyprus company structure.
Preparation and submission of company documents.
Secretarial Services – keep share registers, holding of Annual General Meetings, filing of financial statements.
Fiduciary and Domiciliary Services – provision of directors, nominee shareholders, registered address, and substance offices.
Accounting and Payroll Services.
Virtual Office Services.
Trade name
A trade name in Cyprus is also known as a business name. It is the name under which a company operates, and it is known to the public. A Trade name must be registered with the Registrar of Companies in Cyprus to obtain a certificate of incorporation and be able to conduct business activities. The Trade name must be unique and must not be misleading or resemble an existing registered name.
For more information contact us directly.
