Cyprus is an island situated in the north eastern Mediterranean Sea at the crossroads of Europe, Asia and Africa. The capital city is Nicosia, which has a population of about 200,000 people.
Cyprus gained independence from Britain in 1960 and adopted a presidential system of Government with elections for the President taking place every 5 years. In 1974 Turkey invaded Cyprus and has since occupied the northern 40% of the island although discussions are currently taking place with a view to reunification of the island.
The official languages are Greek and Turkish but English is widely spoken and is the language mostly used in business, government and the courts. Laws are based on the English legal system and company law is modelled on the UK Companies Act 1948. In addition, Cyprus is expected to be a full member of the European Union in 2004. Communications are excellent.
A Cyprus international business company is defined as an otherwise normal Cyprus company which is owned by non-residents of Cyprus and does business exclusively outside the island. Such a company has the following characteristics:
Shareholders A minimum of one shareholder is required and details appear on the public file but anonymity can be retained by the use of nominee shareholders. Bank references on the beneficial owners must be submitted to the Central Bank of Cyprus but secrecy laws protect these details. Bearer shares are not permitted.
Directors: A minimum of one director is required and details appear on the public file but anonymity can be retained by the use of third party directors. There is no legal requirement that the directors be Cyprus resident but in order to obtain relief under the taxation treaties signed by Cyprus it is likely that the company would need to be seen to be Cyprus resident and therefore have a majority of the directors based in Cyprus.
Officers/Secretary: All companies must appoint a company secretary, who may be a natural person or body corporate. It is advisable to appoint a resident company secretary.
Restriction on Name & Activity Names must end with the word "Limited". The following words and their associated activities cannot be used: Assurance, Bank, Building Society or any other words seem sensitive or offensive.
Local Requirement: As a matter of local company law the company must maintain a registered office address within Cyprus and must also appoint a company secretary who, for practical reasons, must be resident in Cyprus. We would normally provide these services as part of our domiciliary service fee.
Timescale: Normally it will take approximately 14 days from the receipt of bank references on the beneficial owners for incorporation to be achieved. However, in special circumstances an accelerated process is available which would allow incorporation in 3 days after receipt of those references. Shelf companies are available but the requirement to provide bank references on the beneficial owners means that such companies cannot be activated until references have been received in Cyprus.
Reporting: Companies need to comply with the following filings annually:
Taxation: All companies which are resident in Cyprus, whether operating locally or internationally, are required to pay taxes are laid down below. A company is considered resident in Cyprus if it is managed and controlled in Cyprus.
The main features of the tax law are as follows:
The above benefits, coupled with the fact that Cyprus has an extensive treaty network with around 40 countries, provide an environment in which very advantageous tax structures can be put in place using a Cyprus company.
Confidentiality:Although details of the shareholders and directors appear on the public file, statutory secrecy provisions protect details of the beneficial owners supplied to the Central Bank.
Company Renewal:Renewal of company, to be paid in June every year. This is a requirement by company registry. Failure to do so results in penalties and could result in the striking-off of the company from the company registry.
Latest valid passport copy and recent utility bill for address proof of shareholder/director are required to be submitted at every renewal as a part of enhanced due diligence. If shareholder is a corporate entity, then latest certificate of incumbency and above stated docs of directors would be required.
KYC Documents for individual Director/Shareholder
KYC for Corporate Director/Shareholder
Whilst every effort has been made to ensure that the details contained herein are correct and up-to-date, it does not constitute legal, tax or other professional advice. We do not accept any responsibility, legal or otherwise, for any errors or omissions.