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Cyprus

Introduction

Cyprus is located in the extreme northeast corner of the Eastern Mediterranean. Strategic location at the crossroads of three continents. The capital and largest city is Nicosia.

The Cyprus now has become a services hub in the Eastern Mediterranean, serving as a business bridge between Europe, the Middle East, Africa and Asia. The country’s efforts to streamline its business environment have seen success.

The area is 9,251 km2.

Population

1,170,125 (2016 estimate)

Language

Greek, English

Political Structure

The Republic of Cyprus is a member of the Eurozone and a Member State of the European Union. Cyprus has since evolved into an independent, sovereign Presidential Republic with a written constitution which safeguards the rule of law, political stability and human and property rights.

Cyprus’ corporate statutes are based on English company legislation and the legal system is modelled on English common law.

Cyprus’ legislation, including employment law, is fully aligned and compliant with European Union legislation. European Union Directives are fully implemented into local legislation and European Union Regulations have direct effect and application in Cyprus.

Economy

Currency

Euro (EUR)

Exchange Control

No exchange control restrictions once the approval for the registration of the company is granted by the Central Bank of Cyprus.

Freely transferable accounts of any currency may be kept either in Cyprus or anywhere abroad without any exchange control restrictions. Cyprus is one of the most popular EU jurisdiction for company formation.

Financial services industry

In the early 21st century the Cypriot economy has diversified and become prosperous.

In the Cyprus, the leading industries are: Financial services, Tourism, Real estate, Shipping, Energy and Education. Cyprus has been sought as a base for several offshore businesses for its low tax rates.

Cyprus has a sophisticated and advanced financial services sector, which is expanding year on year. Banking is the largest component of the sector, and is regulated by the Central Bank of Cyprus. Commercial banking arrangements and practices follow the British model and there are currently over 40 Cypriot and international banks operating in Cyprus.

There are no restrictions on foreign investors’ access to financing in Cyprus and borrowing from foreign sources is not restricted. Therefore, Cyprus is ideal location for many investors around the world go to do business.

Cyprus has spent decades building an economy based on the provision of top-quality professional services, and is recognised internationally as a leading provider of corporate structuring, international tax planning and other financial services.

Corporate Law/Act

Type of Company/Corporation

Cyprus continues to be one of the leading jurisdictions used by corporations and corporate planners to establish their companies to channel investments into key markets worldwide.

One IBC supply incorporation service for all investors to set up a Company in Cyprus and Corporate services related. The popular type of entity is Private Limited Company with governing corporate legislation is Companies Law, Cap 113, as amended.

Company Name

The name of each company must end with the word “Limited” or its abbreviation “Ltd”.

The Registrar will not permit registration of a name the same as or confusingly similar to that of an already registered company.

No company shall be registered by a name which in the opinion of the Council of Ministers is undesirable.

Where it is proved to the satisfaction of the Council of Ministers that an association about to be formed as a company is to be formed for promoting commerce, art, science, religion, charity or any other useful object, and intends to apply its profits, if any, or other income in promoting its objects, and to prohibit the payment of any dividend to its members, the Council of Ministers may by licence direct that the association may be registered as a company with limited liability, without the addition of the word "limited" to its name.

Company Information privacy

Information published relating to shares and shareholders: Issued capital notified on incorporation and annually together with a list of shareholders.

Incorporation Procedure

Just 4 simple steps are given to incorporate a Cyprus Company so easily:

  • Step 1: Select basic Resident/Founder nationality information and other additional services which you want (if any).
  • Step 2: Register or login and fill in the company names and director/ shareholder(s) and fill in billing address and special request (if any).
  • Step 3: Choose your payment method (We accept payment by Credit/Debit Card, PayPal or Wire Transfer).
  • Step 4: You will receive soft copies of necessary documents including: Certificate of Incorporation, Business Registration, Memorandum and Articles of Association, etc. Then, your new company in a jurisdiction is ready to do business. You can bring the documents in company kit to open corporate bank account or we can help you with our long experience of Banking support service.

* These documents required to Incorporate Cyprus company:

  • Passport of each shareholder/beneficial owner and director;
  • Proof of residential address of each director and shareholder (Must be in English or certified translation version);
  • The proposed company names;
  • The issued share capital and par value of shares.

Compliance

Capital

The usual authorised share capital of a Cyprus company is 5,000 EUR and the usual minimum issued capital is 1,000 EUR.

Statutory minimum paid up capital requirements

One share must be subscribed to at the date of incorporation but there is no requirement that this be paid up. There is no minimum share capital requirement under statute.

Share

The following classes of shares are available registered (nominative) shares, preference shares, redeemable shares and shares with special (or no) voting rights. It is not permissible to have shares of no par value or bearer shares.

Director

A minimum of one director required. An individual and corporate directors are permitted. None of requirements the nationality and residency of directors.

Shareholder

Minimum of one, maximum of 50 nominee shareholders are permitted as is holding shares on trust.

Beneficial Owner

Due Diligence required on each Beneficial Owner (UBO) by providing documents and information as required for the incorporation of a Cyprus Company.

Taxation

As a stable and neutral country, coupled with an EU and OECD-approved tax system and one of the lowest corporate tax rates in Europe, Cyprus has become one of the most attractive international business centres in the region.

For the Resident Companies

Resident Companies are the Companies whose management and control is exercised in Cyprus.

The Corporation Tax for Resident Companies is 1 %.2.5

For the Non - resident Companies

Non-Resident Companies are the Companies whose management and control is exercised outside Cyprus. The Corporation Tax for the Non-Resident Companies is Nil.

Finance statement

Companies are required to complete financial statements compliant with International Financial Reporting Standards, and certain companies must appoint an approved local auditor to inspect the financial statements.

All Cyprus companies are required to hold a yearly General Meeting and file an annual return with the Registrar of Companies. A return outlines changes that took place with the shareholders, director or secretary of a company.

Local Agent

Cypriot companies require a company secretary. If you need to establish tax residency for the company, your company needs to demonstrate that management and control of the company takes place in Cyprus.

Double Taxation Agreements

Cyprus has managed throughout the years to establish a wide network of double tax treaties enabling businesses to avoid being taxed twice on income earned from dividends, interest and royalties.

In accordance with the Cyprus tax legislation payments of dividends and interest to non Cyprus tax residents are exempted from withholding tax in Cyprus. Royalties granted for use outside Cyprus are also free of withholding tax in Cyprus.

License

License Fee & Levy

As of 2013 all Cyprus registered companies irrespective of their year of registration are required to pay the Annual Government Levy. The Levy is payable to the Registrar of Companies by 30th June of each year.

Payment, Company return date Date: The first financial period may cover a period of not more than 18 months from the date of incorporation and, thereafter, the accounting reference period is a 12 - month period coinciding with the calendar year.

Penalty

The company, directors, as the case may be, shall be liable to a fine not exceeding eight hundred fifty-four euros, and, in the case of default by the company, every officer of the company who is in default shall be liable to the like penalty.

Company Restoration

The court will order the restoration to the companies register, provided that it is satisfied that: (a) the company was at the time of the strike-off carrying on business, or in operation; and (b) that it is otherwise just for the company to be restored to the companies register. Upon an office copy of the court order being filed to the Registrar of Companies for registration, the company will be deemed to have continued in existence as if it had never been struck off and dissolved. The effect of the restoration court order is retroactive.

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