4. Legal entities

a. Introduction

The private limited company is the pre-eminent legal entity in Cyprus. In addition, branches of foreign companies and international partnerships are in regular use. Companies may be limited by shares or by guarantee or a combination of both.

The law governing companies is contained in CAP113 – Companies Law (as amended). Amendments since independence have tended to be made so as to bring Cypriot law into harmony with EU law.

Public or private collective investment schemes taking the form of companies, unit trusts or international partnerships have grown in popularity since the introduction of legislation in 1999. Such schemes are known for their tax-efficient qualities. The Central Bank of Cyprus regulates the probity of this sector.

b. Incorporation

It takes about seven days for the registrar to approve a company’s name, and a further 25 days to incorporate it. The time can be reduced through the purchase of a pre-incorporated company, the use of a pre-approved company name or the payment of an acceleration fee.

Incorporation is never earlier than the date given on the company’s certificate of incorporation and is preceded by the completion of the company’s memorandum and articles of association duly confirmed by a Cypriot lawyer and filed with the Registrar of Companies. The documents to be filed must be written in Greek (or Turkish); however, copies in any European language may also be filed as long as they are accompanied by an affidavit confirming that they are a true translation of the Greek copy.

It is legally permissible to transfer a company’s registered office in and out of Cyprus.

c. Capitalisation

There is no minimum share capital of private companies. Stamp duty is payable at 0.6 per cent of authorised share capital, along with a fixed amount of EUR102.52.

Shares in a company may be either ordinary, preference or redeemable. The rights of a particular class are set out in the company’s articles of association.

d. Director requirements

Any person wishing to act as a director is required to file with the registrar details of name, address, nationality, number of ID or passport and occupation. A company having two or more members may have a single director that is either an individual or a corporate body, provided the company’s secretary is a different person. There is no such restriction for a single-member company.

e. Disclosure and other requirements

It is compulsory for all Cypriot companies, other than those that qualify as a small-sized company, to file audited financial statements at the company registry. In addition, the Commissioner of Income Taxes requires all resident companies and branches to file audited financial statements with their tax declarations.

© 2012 Society of Trust & Estate Practitioners