Cyprus offers a plethora of reasons why foreign investors, international groups and businessmen should not only invest in the country or simply add it on the diagram of their international business structures, but also to relocate and transfer their business activities there.
You can find a detailed analysis of the various advantages and incentives available for setting up or relocating a business to Cyprus, on our dedicated page and video, by clicking here.
What follows is a summary of
the main elements to be defined and the procedure to be followed for the formation
of a Cyprus Private Limited Liability Company, which is by far the most popular
type of company used in Cyprus.
1. Key elements to be defined
Companies are managed and controlled by the Board of Directors, who may be physical persons or legal entities. Under Cyprus Company Law, a Cyprus private company must have at least one director.
There is no legal requirement for the directors to be Cyprus residents, however in order for the management and control concept for tax residency purposes to be established in Cyprus, it is important that the majority of the directors are residents of Cyprus.
The company secretary is the second officer of a company, after the director. As with the director it may be a physical person or a legal entity. As its name suggests, its duties are of a secretarial nature, such as maintaining the Corporate Register of the company, receiving and sending notices, dealing with the Registrar of Companies and calling for meetings. For practical reasons it is recommended that the secretary appointed is a Cyprus resident as all statutory filings are made in Greek.
A Cyprus private company must have at least one shareholder, who can be either a physical person or a legal entity, of any nationality. The Law permits the holding of shares by third parties (nominee shareholders) on behalf of the beneficial owners, allowing thus anonymity when desired.
There is no minimum or maximum share capital required by Law, however, it is recommended that a company should have a minimum share capital of €1,000, or the equivalent in any other currency, which can be divided in any number of shares.
All Cyprus companies must have their registered office in Cyprus, to receive and maintain all official documentation related to them. The registered office address can also be used as the business address.
Prior approval of the name by the Registrar of Companies is required. Very general or deceptive names are not accepted nor are names similar to existing ones. A company’s name may be changed at any time and as many times as necessary following a decision of its shareholders. The name of the private limited liability company must end with the word ‘Limited’ or “Ltd”.
Preparation of Memorandum and Articles of Association
All Cyprus limited liability companies must prepare a Memorandum and Articles of Association (M&A). The Memorandum specifies the company’s name, registered office, object (can cover a wide range of activities) and share capital. The Articles of Association, on the other hand, secure the smooth functioning of the business by specifying the rules governing the internal management of the company, such as powers of directors, voting rights of members and transfers of shares.
The M&A of the company must be submitted for filing with the Registrar of Companies in Greek. If required, a translation file may also be established in any foreign language.
Application for incorporation to Registrar
The submission of the application for the company’s incorporation to the Registrar of Companies is accompanied by a sworn declaration by a qualified lawyer, member of the Cyprus Bar Association.
Resolutions and other corporate documentation for the incorporation
Documents that need to be prepared upon incorporation are the Share Certificate, the Corporate Register and the minutes of the meeting of the Board of Directors deciding on the formation of the company and its statutory details, adopting also the company’s seal. These documents are prepared by the company secretary and are kept at the company’s registered office.
B. How we can help
The set-up of a company is often the first important step in implementing the plans of a client and one that will need the assistance of qualified and experienced advisors with local expertise. Our aim is to make this step as smooth and efficient as possible so that the plans can turn to action the soonest and as intended. Seamark can provide timely, reliable and efficient assistance on, among others, the following areas:
We can also offer already incorporated and never used before (shelf) companies for cases where there is shortage of time to incorporate from scratch.
For more information on other aspects of setting up presence in Cyprus you can refer to the dedicated section of our website, which can be found by clicking here.