Limited Liability Company registration in Cyprus

An application must be submitted to the Registrar of Companies for the approval of the company’s name before the company is registered. The following words are prohibited: “Cooperative”, “Municipal”, “Privileged” or any other word implying association with the government. The company’s name must not be very similar to the names already existing in the Registrar causing confusion and it must not contain improper or offensive words. The company’s name must end with the word limited or an abbreviation of the word that stands for Limited Liability Company such as “Limited”, “Ltd”. The name of the company can have Greek or Latin characters. It should be noted that the Registrar is empowered by legislation to object the registration of any name that in the Registrars discretion is considered undesirable.

A Limited Liability Company in Cyprus is required to have a registered office and address in Cyprus, which must be stated to the Companies Registrar.

A Limited Liability Company in Cyprus is required to have a director and secretary who reside in Cyprus. Corporate persons can become director and secretary. Whereas a company is comprised of a single member, the director and the secretary can be the same person. The director and secretary details are registered on the Companies Registrar and can be accessed by the public.

One shareholder is the minimum required and the maximum is 50, there is no requirement for them to be locals and corporate entity or natural person can be appointed as shareholders. The director and shareholder can be the same person. The shareholders details are registered on the Companies Registrar and can be accessed by the public.

The beneficial owners’ details are not registered on the public record and cannot be accessed by the public.

The owners of a Cyprus company are free to determine any amount as the authorised capital at incorporation and it may be denominated in any currency, although the amount of EUR 1,000 is suggested as the most usual. The authorised share capital is the maximum amount of capital that the company is authorised by its constitutional documents to draw from its shareholders to issue in exchange for share issuance.

Only registered shares are admissible and the minimum number of shares that must be issued is one. A Limited Liability Company in Cyprus may not issue bearer shares.

No requirement is imposed on minimum paid up capital at incorporation; this means that the owners of the company are not required to set a deadline as to when such capital must be paid up by the shareholders.

A company in Cyprus can be incorporated within 8-10 days.

Ready-made but unused companies are available in Cyprus, in case you are in need of a quicker incorporation process.

There are no economic substance requirements in place, thus a Cyprus company may conduct its business from outside Cyprus or maintain a fully operational office in Cyprus.  However, only companies which are considered as Cyprus tax residents are taxed at a 12,5% on their income deriving from outside Cyprus. To qualify as a tax resident, a company must have its management and control exercised from within Cyprus. As the management and control of Cyprus company is exercised by the directors, the appointment of a Cyprus resident director is appointed in majority. Nominee services are available for this purpose.

It is mandatory for companies in Cyprus to submit financial statements that are audited or certified by duly licensed auditors or accountants with the local tax authority, regardless if the company is tax resident in Cyprus or inactive. Also, it is mandatory that companies file Annual Return to the Registrar of Companies every year. The first Annual Return submission is due 18 months after the date of company registration and subsequently it is due on an annual basis.

Additionally, Cyprus companies are subject to an annual government fee at the amount of EUR 350, payable each year on the 30^th of June to maintain the good standing and to remain incorporated in the record of the Companies Registrar.

Corporation tax rate in Cyprus is 12,5%; this is imposed on the company’s net income arising in the course of its business activities within Cyprus, but there are some significant exemptions. Companies which do not exercise their management and control from within Cyprus, are not considered as tax residents and their income deriving from a foreign source outside Cyprus is exempted. Corporate tax is imposed on non-tax resident companies only on their income arising from business activity conducted within a permanent establishment in Cyprus.

However, non-tax resident companies cannot be benefited by the provisions of double tax treaties concluded by Cyprus. Cyprus is a party to a vast number of double tax treaties offering significant benefits to companies registered there. The countries among those Treaties are concluded vary, the list includes UK, Russia, USA, Canada, China and India.

There are also advantages deriving from the tax exemption provisions for dividend income, profits on transactions in shares, interests and royalties. Additionally, there are no exchange controls and no tax is withheld for dividends paid to non-residents and no capital gains taxe aside from transactions regarding real estate in Cyprus.