Company Formation Survey 2008


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		1. Company law	Companies Law, Cap 113 (based almost entirely on English Companies Act 1948) as amended in 2007.
		2. Types of company:	Public companies limited by shares, private companies limited by shares, companies limited by guarantee, branches.
		(a) type of company preferred for international transactions:	Private company limited by shares, both managed and controlled by residents.
		(b) shareless companies:	Not allowed under Cyprus Law.
		3. Capital requirements:	No minimum required - However advisable to be at least ? EUR2,000.
		4. Costs to incorporate, excluding government fees:	Depending upon work involved and complexity of Articles of Association – approx. EUR2,500 including legal counsel’s fees, notary (certifying officers) fees and duties of all kinds payable to public authorities.
		5. Fees paid to authorities to incorporate:	Flat fee ?EUR102,52 plus 0.6% of the nominal value of the authorised share capital with no upper limit.
		6. Annual fees paid to authorities:	EUR17,09 or EUR34,17 for late filing.
		7. Taxation rates applied to companies generally:	Taxation system residence based. In relation to companies’ residence, determined by management and control test and generally where majority of Board resident and where Board decisions effectively made. Corporation tax of resident companies 10% on profits. The following are additional features of Cyprus Tax legislation: • exemption from tax on profit on disposal of shares; • provisions on reorganisations and securities; • deduction of foreign tax paid as a tax credit from taxes payable in Cyprus, under certain conditions; • exemption from tax of dividend income from abroad the tax payable in Cyprus; • exemption from tax of profits from foreign PE; • 50% exemption from corporation tax of passive income; • group relief provisions for the utilisation of losses interest income. Dividends received from non-resident companies are exempt from the Special contribution for defence at 15% if the holding company in the paying company is at least 1%. This exemption does not apply if the company paying the dividend engages: (1) more than 50% in activities which lead to investment income, and (2) the foreign tax burden is substantially lower than the tax burden of the company in Cyprus. No withholding tax on dividends paid to non-residents whether individual or corporations. Non-resident companies not subject to taxation in Cyprus but tax treaties cannot be revoked.
		(a) the taxation of companies in 2 (a)	As above.
		8. Method of incorporation:	Memorandum & Articles of Association drafted in Greek (with English Official translation), by practicing lawyers, signed by one or more subscribers and submitted to Registrar of Companies.
		9. Who may incorporate - specify what, if any, local representatives/ professionals required?	Only practising lawyers (in-house lawyers are not practising lawyers and therefore not allowed to incorporate companies).
		(a) are ready made companies available?	Shelf companies are available.
		10. Length of time to incorporate:	Thirty days – efforts are being made to shorten said period to five to seven days.
		11. Minimum members:	One for private company; seven for public company.
		12. Registered office:	Mandatory requirement - registered office/address in Cyprus.
		(a) Can the registered office be a bank/ lawyer/ accountant's office (brass plate)?	Yes - Majority of registered offices however are provided mainly by practising lawyers or, alternatively, by accountants.
		13. Directors and secretary:	No legal requirement for either, but if no resident Director, then may be considered non-resident company (see 7 above).
		(a) Must a director/ secretary be resident?	Resident Secretary need not be resident but advisable as Annual Return and other documentation is required to be submitted in Greek language.
		(b) Are Corporate Directors allowed?	Yes
		14. Appointee directors/ secretary possible?	Yes - widely used.
		15. Amount of fees payable to appointee directors/ secretary:	EUR500 for a corporate director, EUR300 for Secretary.
		16. Meetings:	AGM of shareholders required within 18 months of incorporation and thereafter annually. AGM/EGMs necessary to approve and file audited accounts with Annual Return. Telephone ?and electronic meetings possible. Written resolutions permissible if unanimous and executed by all relevant parties.
		17. Annual return:	Mandatory indicating share capital, names of directors, shareholders and secretary. Must be filed with audited financial statements in Greek.
		(a) Must financial statements of a company be audited?	Yes, in all cases.
		18. Is disclosure of profits required by filing balance sheets with annual returns?	Yes.
		19. Are there any exchange control or other financial restraints imposed upon a company?	None apart from restrictions, if any, emanating from EU Treaties in force from time to time.
		20. Companies formed in the last year:	29,016.
		21. Number of companies on the company register altogether:	184,133.
S I T E M A P BACK TO TOP		22. How, if any, is migration into and out of the jurisdiction achieved?	Can now be achieved after an amendment of Cap113 by Law 124(I)/2006 with redomiciliation of companies in and out of Cyprus.
		23. Is migration out of your country provided for?	Yes provided in above law.
		24. Any amendments to company law over the last 12 months:	Yes, see above number 22.
		25. Anticipated amendments to company law over the next 12 months:	Conversion of company share capital into Euro following Cyprus’ entry in the Eurozone 1 January 2008.
			Compiled by Peter G. Economides, Totalserve Management Ltd.