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TYPES & INCORPORATION

Company Types

The Republic of Cyprus is an attractive jurisdiction for conducting business via one of the various types of companies and other legal entities available. Cyprus companies are regulated by the Companies Act (Cap. 113), as amended, which has been subject to considerable change and improvement over the last years.

The most sought-after type of legal entity used as a vehicle for doing business in Cyprus is a private limited company by shares or by guarantee.

A private limited company by shares is a company where the liability of the shareholders is limited, as determined by its Memorandum, to the amount, if any, that has not been paid for the shares they hold. A private limited company by shares must have at least one (1) shareholder and a maximum of fifty (50) shareholders. Different types of shares can be issued (e.g., preferred shares, redeemable shares, and so forth) but no bearer shares can be issued for this type of company. The transfer of shares is restricted by the company’s Articles of Association and/or the applicable law.  The company must have a registered office address in Cyprus. Private companies limited by shares are identified by the word “Limited”, frequently abbreviated as “Ltd”.

A private limited company by guarantee is a company where the liability of the shareholders, as determined by its Memorandum, is limited to the amount that the members wanted to undertake respectively to contribute to the company’s assets in case of its dissolution. The majority of this type of companies are non-profit organisations.

In addition, businesses may be conducted via:

  • Public company: a public company must have at least seven (7) shareholders and two (2) directors. Key characteristics of public companies include a minimum share capital of €25,629 (CYP £15,000), the fact that the public can subscribe to their shares, and that the transfer of shares is not restricted.
  • Branch of a foreign company: foreign companies establish a branch of their operations in Cyprus in order to build on their legal presence and economic substance in the country.
  • Redomiciliation: companies established in a jurisdiction other than the Republic of Cyprus choose to redomicile (relocate) to Cyprus in order to take advantage of the various benefits Cyprus has to offer.

  • Societa Europea (SE): this type of company is a public limited company established in any Member State of the European Union (EU) in accordance with the provisions of Council Regulation (EC) No 2157/2001 of 8 October 2001 on the Statute for a European company (SE) (known as Regulation 2157/2001) and can relocate the registered office from another Member State to Cyprus (and vice versa), without having to dissolve the company but via a merger or a conversion or the creation of a holding/subsidiary company.
  • Partnerships: there are two (2) main types of partnerships. First, a general partnership, where each partner is liable jointly and separately with the other partners for an unlimited amount of the debts and obligations of the partnership. Second, a limited partnership, where at least one of the partners has unlimited liability for the debts and obligations of the partnership and the remaining partners have limited liability.
Incorporation

Incorporating (registering) a Company in Cyprus is a process that requires skilful and knowledgeable professionals, with a thorough understanding of the entire incorporation process on a practical level, qualities that we possess at ServPRO.

Our in-depth understanding of the applicable legislative provisions and the required documentation, coupled with our established hands-on experience in matters pertaining to incorporation of companies, enables us to give our clients the best professional service possible.

In order to address frequent enquiries made by our clientele (existing and prospective), with the help of our Corporate Team we have put together a snapshot of the key steps taken during a Company’s incorporation process:

 

Approval of Company Name:

An application has to be submitted to the Registrar of Companies and Official Receiver of the Republic of Cyprus for the approval of the Company’s name. The Registrar is unlikely to accept a name which is similar to an existing one, or is considered misleading, or too general. Names which include any of the words National, International, Corporation, European, Co-operative may be allowed only in special circumstances for sound reasons and with conditions.

 

Documents submitted to the Registrar of Companies about the new Company

1. Memorandum and Articles of Association

The Memorandum of Association mainly contains the objects of the Company. It also includes details of the share capital and the subscribers to the Memorandum with the number subscribed. The Companies Act (Cap. 113), as amended, allows a company that is not set up for specific objects to be set up as a commercial company of general objects.

The Articles of Association may adopt partially or in full the Table A of the Companies Act and contain the regulations under which the Company operates, including provisions for the rights of the shareholders, procedure for the transfer of shares, voting rights, powers of the Directors and appointment and removal of thereof, dividends, general meetings of the Company, accounts and audits.

Our Corporate team has extensive knowledge and practice in drafting tailor-made Articles of Associations in line with each respective client’s intentions and wishes.

Contact us today for our Memorandum and Articles of Association services.

 

2. Directors and Secretary

The details of the first appointed Director(s) and the Secretary of the Company should be submitted. For taxation purposes and for taking advantage of the existing Double Tax Treaties (DTT) it is advisable to show that the management and control of the company is exercised in Cyprus by appointing local Director(s).

Contact us today for our Directorial and Secretarial services.

 

3. Registered Office Address

The details of the Registered Office address of the company in Cyprus.

Contact us today for our Registered Office services.

 

Registration Certificates

Once the company registration process is complete the Registrar of Companies issues the incorporation certificates relating to the newly-incorporated Cypriot Company, consisting of the following:

  • The Certificate of Incorporation;
  • The Certificate of the Director(s) and Secretary;
  • The Certificate of the Shareholders;
  • The Certificate of the Registered Office Address; and
  • The Certified Memorandum and Articles of Association of the Company.

Note:

  1. For the incorporation of company in Cyprus, a lawyer is required to sign as to the legitimacy of the company.
  2. In terms of accounting and auditing, the Companies Act imposes a requirement of book-keeping and preparation of audited financial statements as well as the preparation and submission of annual returns at the Registrar of Companies and Official Receiver in the Republic of Cyprus. Any changes to the company are to be submitted at the Registrar of Companies and Official Receiver of the Republic of Cyprus.
INCORPORATION PURPOSES

Cypriot entities may be incorporated / registered for a variety of purposes, some of which include:

General trading and provision of services: benefiting from Cyprus’ strategic position and access to 3 continents, the excellent shipping industry as well as other logistics conveniences, the favourable taxation on the payment of dividends, interest and royalties as well as the extensive network of Double Tax Treaties (DTT) between the Republic of Cyprus and other States.

Cyprus Holding Companies: having a Cyprus holding company with a portfolio of overseas subsidiaries generating revenue streams and benefiting from the favourable taxation on the payment of dividends, interest and royalties as well as the extensive network of DTT between the Republic of Cyprus and other States.

Cyprus IP Companies: benefiting from the IP Tax Box Regime, based on an amendment to the Income Tax Law in 2016, bringing the provisions of the law in line with the latest international developments on the taxation of IP income and the OECD’s action plan on fighting base erosion and profit shifting (BEPS).

The regime contained “Grandfathering provisions” from the old IP regime to the current IP regime, which is enforceable, which hasphased out by 30th June 2021.

The new IP regime introduces the idea of qualifying profits that are eligible for the 80% tax exemption which are calculated based on a “nexus approach” and relate to intellectual property which is eligible for the new regime (qualifying assets). The “nexus approach” is based on R&D expenditure incurred to develop the qualifying assets. The qualifying assets are described in the new provisions of the legislation and include amongst others patents, copyrighted software programs and other intangible assets that are non-obvious but exclude trademarks and other copyrights.

The new IP regime applies to Cyprus tax residents, non-tax residents with a permanent establishment in Cyprus as well as foreign residents who are subject to tax in Cyprus.

Furthermore, under the new regime there is no income tax imposed on capital gains arising from the disposal of a qualifying asset and the capital gains arising from such disposal are not included in the qualifying profits.  Additionally, the newly amended Income Tax Law introduces capital allowances for all intangible assets, excluding goodwill and assets qualifying for the existing IP regime.

Cyprus Finance Companies: benefiting from the favourable taxation on the payment of dividends, interest and royalties as well as the extensive network of Cyprus DTT. Such companies are also eligible for Notional Interest Deduction (NID) on equity introduced (which includes share capital and share premium). Profit is taxable in Cyprus at the rate of 12,5% but can be reduced to as low as 2,5% due to the NID on equity of the Cyprus Finance company. Any applicable transfer pricing policies should be taken into account.

Regional Headquarters: multinational companies wishing to take advantage of the Cyprus strategic position and many advantages may establish their regional offices in the island.

Shipping and ship-management: the strategic position of Cyprus, together with tax and non-tax incentives, contributed to the success of the island as an established international shipping centre.

Our Corporate Practice Portfolio

Over the past 10 years, ServPRO has advised hundreds of businesses in numerous industries and ranging in size on relocating (redomiciling), incorporating, and doing business in Cyprus. Our Corporate Team has a stellar track record in delivering practical solutions to corporate clients with a spherical, solution-driven and detail-oriented approach, while demonstrating an aptitude of professionalism, integrity and commercial acumen.

Our Corporate Team is at hand to assist you with Company Incorporation / Registration services for any type of company in Cyprus as well as in any other jurisdiction, of your preference, and to facilitate the management and corporate administration of the operations of your business.

For clients wishing to redomicile (relocate) their company’s seat of incorporation (registered office) to Cyprus, our Corporate Team handles the entire redomiciliation process, from assessing whether the company’s Memorandum and Articles of Association (i.e., the incorporation documents) provide for the possibility of redomiciliation, to issuing of the company’s Certificate of Continuation. In addition, our Corporate Team undertakes the subsequent registration of the redomiciled company to the Tax Registry, the Employers Registry and any other service that may be sought for by our clients (e.g., trade mark registration services). Visit our Redomiciliation page for more information and contact us today for an initial, complimentary consultation.

The process of incorporating or redomiciling a company in Cyprus requires skilful and knowledgeable professionals, with a thorough understanding of the entire incorporation / redomiciliation process on a practical level, qualities that we possess at ServPRO.

Our in-depth understanding of the applicable legislative provisions and the required documentation, coupled with our established hands-on experience in matters pertaining to incorporation and redomiciliation, enables us to help our clients transition through the process in a smooth and transparent manner.

Take a look at the abundant variety of Corporate Services that we offer and contact us today for an initial, complimentary consultation.

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