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18 Oct, 2013

Legal Entities in Cyprus

Categories: Uncategorized

The following entities may be registered under Cypriot company law (similar to the Companies Act 1948 in the United Kingdom) with the Cyprus Registrar of Companies. There is no difference in the laws and regulations for foreign investors carrying on international business activities or for local entities.

The Private Limited Company is a distinct legal entity with a separate personality from its owners and can sue and be sued in its own right. It restricts the right to transfer its shares and prohibits the issue of bearer shares and also prohibits any invitation to the public to subscribe for its shares or debentures. There can be a minimum of one director, one shareholder and a company secretary (it is possible under CAP 113 to be the same person, legal or natural) and a maximum of 50 members. As a rule, international business entities are registered as private companies because this legal form enjoys comparatively inexpensive formation procedures, control over the membership, consensus of a few shareholders and uncomplicated reporting requirements.

The Public Limited Company is governed by more stringent regulations from the Registrar of Companies and more requirements by law.

A Partnership can become a partner with another company or with individuals, provided that it is authorized to do so by its articles. It comprises of two or more persons aiming to profit by carrying on a common business and the relationship of partners and management of the partnership is regulated by the partnership agreement or, if there is no agreement, regulated by law.

Business branches

A local Branch of a foreign company or a Branch of a local company may be registered in Cyprus with the Registrar of Companies under the relevant section of the Companies Law. They must file a Greek translation of the company’s Memorandum of Association and a list of directors and must appoint a local representative that is authorized to accept service in Cyprus. The Cyprus branch does not have a distinct legal personality and any liability remains with the foreign entity. For accounting purposes, it will be treated as a separate entity and must account for its profits on a similar basis as a limited liability company.

European Company (SE)

A European Company is registered according to EC Council Regulations 2157/2001. This allows companies in different EU member states to merge or form a holding company or joint subsidiary whilst avoiding the practical and legal constraints that would arise from 27 or more different legal systems.

Registration process

With FinExpertiza Cyprus team’s help you can register your new company with three easy steps:

 Step one: Approval of the name

The Registrar of Companies must first approve of any company name that may be established in Cyprus (it is always best to provide more than one name in order of preference to ensure registration). For a successful registration, the name:

  • must not be deemed undesirable; and
  • must be in the Latin or Greek alphabet; and
  • must not be identical or similar to an existing company name; and
  • must not imply illegal activities; and
  • must not imply royal or government patronage; and
  • must include the suffix ‘Limited’ or ‘Ltd’ which denotes limited liability.

The following names, or their derivatives and foreign language equivalents, require consent or a license: Asset Management, Asset Manager, Assurance, Bank, Banking, Broker, Brokerage, Building Society, Capital, Credit, Currency, Custodian, Custody, Dealer, Dealing, Deposit, Derivative, Exchange, Fiduciary, Finance, Financial, Fund, Future, Insurance, Reinsurance, Lending, Lender, Loan, Option, Pension, Portfolio, Reserves, Savings, Security, Stock, Trust and Trustees. The above is subject to approval from the official receiver and Registrar of Cyprus.

Step two: Corporate features of your future company

For the registration of a Limited Company in Cyprus, the following information is required:

  • A list of the Principal Activities in which the company is planning to be engaged; and
    • Authorized Share Capital
    • Shareholders – A minimum of one shareholder is required, which can be a company or a physical person but Bearer Shares cannot be issued under Cypriot law. (Please note: If you require confidentiality, the shares can be held by nominee shareholders in trust for the beneficial owners, whereas a trust document is provided, accompanying the share certificate.); and
    • Directors – A minimum of one director is required who can be a natural or a legal person. By law, this director may be a non-resident but for the company to qualify as a tax resident of Cyprus, the management and control of the company must be in Cyprus; and
    • Secretary – Because this person will be ensuring that the company adheres to Company Law requirements, it is practical to appoint a permanent Cypriot resident who is aware of the provisions of CAP 113.

Step three: Company registration

Registration of a new incorporated company will take approximately seven to ten days and to notarize and Apostille all documents will take approximately one or two days.

To enable you to keep your focus on day-to-day running of your company, FinExpertiza Cyprus can register an office address in Cyprus for official correspondence, nominate shareholders where required, provide director services, provide a Secretary for your company, arrange corporate management, arrange legalization by Apostille and Consulates, provide accounting services and tax and legal advice, open accounts with local banks, provide many other corporate services including Certificates of Good Standing, Incumbency, Certificates of Tax Exemption, etc.

For more information and/or advice, please contact us via email at info@finexpertiza.cy