Our Firm provides all types of corporate services, including the approval of company names, the Registration of Companies in Cyprus, nominee services for professional directors, secretary, and trustee shareholders, as well as provides registered office for all clients doing international business through Cyprus.
Companies under the Cyprus Companies Laws
The Company Laws CAP 113 provides for a variety of solutions.
- The most popular entity used by international investors is the Company Limited by shares, meaning that the company’s formation is based on share capital with limited liability for its shareholders. This is actually divided into:
(a) Public companies and
(b) Private companies which are also subdivided into:
- Exempt Private Company
- Limited Liability Private Company
- The Company Limited by guarantee is an alternative, where the shareholders liability is limited by guarantee.
- The Partnerships and Business Name Law, Chapter 116, also provides for two general types of Partnerships:
- a) General Partnership
- b) Limited Partnership
Further, Companies Laws, CAP 113 provides for the registration in Cyprus of foreign companies under the form of a branch.
The registration of the International Business Company
Approval of Name
The first step to register a Company is to approve a name. Such company name is always completed with the word ‘Limited’ in case the company is a limited company, as explained above.
The name suggested is forwarded to the appropriate department of the Registrar of Companies, for approval. It usually takes 2-3 working days to decide. Our Firm always maintains an extensive list of approved names which our clients may use for immediate incorporation.
Registration of Company includes the completion of the process of registration with the appropriate authorities including the supply of Memorandum and Articles (in English); Certificates of registration, legal address, directors and secretary, shareholders (where applicable); first resolutions of shareholders and directors; share certificates (upon request); stamp (additional seal is kept by the secretary by law); company letterhead (upon request). Actually upon completion of the process, the company is fully operative at the place of registration as well as anywhere else in the world.
Upon approval of the company name, our Firm undertakes to submit all appropriate documentation with the Registrar of Companies. These consist of the following.
- An affidavit in Court signed by one of our lawyers
- A statement on approved format to declare the Registered Office
- As statement on approved format to declare the Director(s) and secretary of the company
- The Memorandum and Articles of Associations of the Company.
Upon submission of all required forms and incorporation documents, the Registrar of Companies usually gives a registration number within 3-4 working days and then the corporate certificates are issued in English or Greek languages.
It is our duty to maintain absolute secrecy of the identity of the shareholders, either through trust fiduciary agreements or through nominees or through other companies.
The appointment of professional directors, nominee shareholders and secretary from our Firm and our associates guarantees non-disclosure of any information relating directly or indirectly to the Company or its officials or the ultimate Beneficial Owners.
The name of the actual shareholders is required only in case of opening a bank account in Cyprus (or foreign) Banks. However, the bank also operates under absolute confidentiality principles and procedures that guarantee non-disclosure of any information relating to the company itself or its beneficial owners or officials. The signatory of the bank account may be the beneficial owner personally or any of the appointed nominees.
In International Companies operating through Cyprus, our Firm performs a due diligence process, as per the instructions of the Central Bank of Cyprus. This process is simple and protects all parties involved, mainly the Ultimate Beneficial Owners.
Upon registration, the Ultimate Beneficial Owner needs to provide the following documents
- True Copy of his/her passport and/or ID
- Original recent utility bill on which the address of residence is shown
- Bank Reference Letter
Registered Address and Secretarial Support
The Cyprus Company Law requires the presence of the registered office of the company on the territory of Cyprus.
Address and secretarial support services are charged for the provision of registered office and local registered agent as required by law, and a secretary, handling minimum statutory formalities and filing of annual return. Our firm shall not incur any liability for any loss occasioned by its decision in this respect or for any loss, of whatever nature, attributable to delay in the Beneficiary receiving mail or other communications forwarded pursuant hereto.
Professional Directors and Nominee Shareholders
Our firm provides full nominee structure for anonymity of ownership and management of a company in the interests of its beneficiaries. The minimum number of nominee directors is one, as well as that of nominee shareholder. This means that a Company may be registered and be consisted of one director and one shareholder who may even be the same person.
Our firm will appoint a company or companies and/or a suitable Professional staff to act as professional director(s) and/or nominee shareholder(s) of the Company. When nominee shareholders are ordered, the owners will also receive declarations and instruments of share transfer. The persons and/or companies so appointed may be changed at any time upon the client’s request (for a fee) or when our firm sees it fit. Our firm shall not be liable for any costs incurred by the beneficiary or the Company as a result of any change of the professional director(s) and/or nominee shareholder(s) on the client’s request.
Bank Account Opening
Bank Account Opening is a service necessary to corporate services. Such service is supplied with most reputable Banks in Cyprus and abroad with maximum efficiency for the companies best interests. These are charged for the provision of assistance to open a bank account including the preparation and filing with the bank of the required documents and liaising with the Bank and the client in relation to the due diligence required by the banks. Our firm does not guarantee the success of bank account opening.
All services ordered after the initial company formation and not paid with the initial order as documented by this price list, are additionally liable for the Cyprus VAT. Any future increase in the rates/amounts of taxes/changes will be automatically reflected as increase in your invoice.
Our Firm undertakes the company registration with the VAT authorities as well as with the Department of Inland Revenue. This process is usually a same day process and the appropriate documentation required is the corporate documents.
Suggestions & Solutions
Cyprus offers a variety of tax benefits for international companies operating under Cyprus Companies Laws. There are a number of suggestions that can suit to anyone’s plans, the most important of which that are commonly used are the following:
The Cyprus Holding company
This is the most attractive and tax beneficial structure used by International companies who invest in other jurisdictions. Its advantages can be summarized as follows:
- Dividend income derived from subsidiaries and other investments, in most cases, is tax exempt in Cyprus
- Profit arising from the sale of shares in other companies is tax exempt in Cyprus.
- From the country’s double tax treaty network, Cyprus holding companies can benefit from low or zero withholding tax provisions.
- There is no controlled foreign company legislation applying in Cyprus.
- Payment of dividends to non Cyprus tax resident shareholders is tax free.
Financial services companies
This type of companies is widely used taking advantage of the tax benefits arising from the profits from financial instrument trading. The advantages are:
- Zero tax on profit arising from the trading in financial instruments, including shares, bonds, repo deals and other listed or private instruments.
- No tax on dividend income under normal circumstances
These companies can trade in any country in the world either for their own account or on behalf of their clients. In case of the latter a license will be required by the Cyprus Securities and Exchange Commission as an approved Investment Firm.
International trading companies can use Cyprus for their activities within and outside the EU with the following benefits:
- Lowest tax rate at 10% paid to business profits.
- Applying EU regulations and guidelines on VAT and simplifications for VAT registration and recording.
- Extensive network of double tax treaties
- Expenses relating to the business activities or closely related with the business activities are allowed for tax purposes.
Intellectual Property Income Companies
Following a recent amendment of the Income Tax Law, this type of companies are very attractive since they offer great advantages for businesses who use them.
These companies can be used for:
- Patents on new inventions as long as they are properly registered.
The new tax benefits for the income derived from the above named intellectual property sources, is summarized as follows:
- The wear and tear expense of the costs of development and purchase is 20% on the capital amount.
- From the profit arising from the business use of the IP rights and intangible assets, the company can deduct 80% and only pay income tax on the 20% of this profit.
- Effective tax rate can be reduced as low as 2%.
The new Cyprus Merchant Shipping legislation has created a very tax efficient structure for shipping groups and is ideal for holding company locations.
As from 01 January 2010, Cyprus has become the only EU country with an EU approved Tonnage Tax (TT) system that basically:
- Provides for TT on the net tonnage of the vessels rather than Corporation Tax on the actual profits, regulated by the Department of Merchant Shipping rather than the Tax Authorities.
- Gives total tax exemption of profits tax and distribution tax at all levels
- Allows mixed activities within a company
- Supports an open registry
- Allows split management activities (ship crews or technical)
The law provides full exemption to ship owners, charterers and ship managers from all profit taxes and imposes tonnage tax on the net tonnage of each vessel at approved rates.