Registration procedures of International Business Entities in Cyprus
An international business entity may be registered in Cyprus either as a private company limited by shares or as a partnership or as a branch of a foreign entity.
International business limited companies
Herein below we set out an outline of the procedure for registering such entities in Cyprus:
Approval of name
The first step to be taken, with regard to the incorporation of a company, is to apply for and obtain the approval of the proposed name of the Company by the Registrar of Companies. It is advisable to file for approval to the Registrar office two or three alternative names in case the first name is rejected by the Registrar. Please note that names which bear similarities to existing names or to names in the list of reserved names and/or names which have a very general meaning usually are not acceptable.
Filing of the memorandum and articles of association
The appointed lawyer of the Company must prepare and file with the Registrar's office the memorandum and articles of association of the Company. The memorandum must stipulate the objects of the Companies activities. It is advisable that the objects should be as wide as possible to enable the company to be activated in various business fields. The articles of association must contain the principles by which the Company is internally managed and must regulate the relationship between its members.
Share capital requirements
Any company may be registered with a very low minimum authorised share capital, although the issued share capital, which may not be paid up, may be as low as Euro1.
Under the relevant legislation there must be at least one shareholder for whom the following information is required:
- full name
- number of shares to be held
It is useful to point out that, should anonymity be required, trustee companies in Cyprus can hold the shares in trust for the non-resident beneficial owner. The trustee company normally prepares and delivers to the beneficial owner of the shares a properly executed instrument of trust accompanied by the share certificate.
The procedure for the appointment of directors is specified in the articles of association of the Company. However, whatever provisions are made therein, the members of the Company have the control of the appointment and removal of the directors. Usually it is provided in the articles that the first directors are appointed by the subscribers to the memorandum who are the first members. In this case, the subscribers must sign a resolution by which the persons named by the subscribers become the first directors of the Company upon signature of this resolution.
Where it is desirable for the company to be deemed to be effectively managed and controlled in Cyprus, for example in order to be able to benefit from the provisions of a double tax treaty, it is advisable that the majority of the directors be resident in Cyprus. Non-resident directors may also be appointed, however, it this case it is recommended that the number of these directors should be below the minimum number necessary to form a quorum.
Upon completion of the incorporation and registration procedure, the lawyer of the company shall send you the following documents for safekeeping:
- Certified copy of the certificate of incorporation
- Certified copy of the certificate of the shareholders of the Company
- Certified copy of the certificate of directors and secretary of the Company
- Certified copy of the certificate of the Company's registered office
- Certified copy of the memorandum and articles of association
The company to be registered is required by law to have a secretary, who might be a person or a company. It is advisable that the secretary is either a person or a company resident in Cyprus in order to be able to carry out their statutory duties which include the filing of all necessary returns (annual or otherwise) to the authorities in Cyprus.
Every company must have a registered office from the day it commences business or from the fourteenth day after its incorporation, whichever is earlier. The registered office is the place where writs, summonses, notices, orders and other official documents can be served upon the company. The situation of the registered office is determined by the directors by an appropriate board resolution.
Bankers, currency and signatories
The company may open bank accounts with any bank in Cyprus or outside Cyprus. It is possible to open bank accounts in Cyprus in most of the main currencies and money transfers can be effected without foreign exchange restrictions. Bank signatories can be provided locally, if necessary.
International business partnerships
The partnership is registered with the Registrar of Companies under the partnership law. This is effected through the filing of the necessary return to the Registrar containing (a) the name of the partnership (b)the object and duration of the partnership (c) the names and full address of the partners, and their authorities to bind the partnership. In the case where non-resident partners wish to reside in Cyprus, work permits issued by the Immigration Department are also required to be filed with the Registrar before the partnership is registered.
Partners are taxed on their shares of the profits of the partnership only if they are tax resident in Cyprus. However, the partners may be taxed in their countries of tax residence.
The partners usually have unlimited liability unless the partnership is registered as limited liability partnership. In this case, individual partners may be limited liability partners while at least one partner (eg a Cyprus IBC) must be a general partner having unlimited liability as far as the partnership is concerned.
Upon registration, the lawyer shall provide the partners with (a) certified copy of the certificate of registration, (b) certified copy of list of partners and their authorities to bind the partnership.
International business branches
The registration procedure is again very similar to the one concerning the registration of a company. However, an overseas company wishing to establish a branch in Cyprus must file with the Registrar of companies, within one month of establishment, the following documents:
certified copy of the charter, memorandum and articles of association or other instrument defining the constitution of the company (translated into Greek)
particulars of directors and secretary of the company
name and address of at least one person resident in Cyprus, authorised to accept on behalf of the company, any notices required to be served on the company
Please note that all the above documents must be legalised and appostilled in the country of origin by a notary public. Alternatively, legalisation is required both by a notary public and the consul of the Republic of Cyprus in that country.
Advantages of registering an international business branch
The advantages extended to IBCs as set out above can also be enjoyed by an international business branch registered in Cyprus. Whenever the management and control of the business of the international business branch is not in Cyprus, the profits of the branch are exempt from all taxes. If the management and control of the business of the international business branch is in Cyprus, then the profits of the branch are subject to a tax rate of 10%.