Thursday, 29 July 2010
The Cyprus Company Law, Chapter 113, is based on the English Companies Act of 1948. Therefore the legal system and return forms are identical to those in the UK.
Companies
Legal forms of Companies under the Cyprus Law
1. Company Limited by shares which is subdivided into:
2. Company Limited by guarantee
The Partnerships and Business Name Law, Chapter 116, also provides for two general types of Partnerships:
Further, section 347 of the companies Law Chapter 113 provides for the registration in Cyprus of foreign companies under the form of a branch.
Requirements for establishing a Company
As from 1st October 2004, the Council of Ministers has approved the complete freedom of the policy governing direct investments from non-residents in Cyprus.
Consequently, non-residents who wish to establish a Company in Cyprus, or acquire shares in existing Cyprus companies, or otherwise to invest in or from Cyprus, no longer require approval by the Central Bank of Cyprus. Such applications should now be addressed directly to the Department of Registrar of Companies and Official Receiver.
The same applies for direct and portfolio investments by natural or legal persons from EU member states. Investors from the EU wishing to register a company in Cyprus or acquire shares in existing Cypriot legal entities should apply directly to the Registrar of Companies.
Registration
The non-residents’ share or participation must be registered in their names or in the names of their nominees at the department of the Registrar of Companies.
Confidentiality
It is possible to obtain absolute secrecy of the identity of the shareholders, either through trust fiduciary agreements or through nominees or through other companies. Business entities are required to prepare and submit to the Department of Finance and the Department of Inland Revenue annual financial statements audited by auditors practicing on the island.
Administration
Companies carry on business activities in and outside Cyprus, whilst it may well have offices and/or have its administration in Cyprus and have local and/or expatriate employees.
Registered Office
It is necessary for all Cypriot companies to have a registered office in Cyprus.
Objects
There is no restriction as to the type or objects and scope of the company. The Memorandum may be changed following an application to the court and having obtained the relevant court order, whilst the articles may be changed by special resolution.
Directors
It is not necessary for directors to hold qualification shares.
The minimum number of directors is one (natural or corporate) but in such a case he cannot also be the secretary of the company.
Alternate directors may be appointed. The minimum number of shareholders is one, natural or corporate. The annual general meeting and/or any extraordinary general meeting of the shareholders may be held in Cyprus.
Meetings
Also meetings of the board of directors may be held in Cyprus. A company must maintain a register of members, directors, secretaries, mortgage or charges and other statutory books.
Branches for Foreign Entities
The Law
A branch of a foreign company may be registered in Cyprus under section 347 of the Companies Law, Chapter 113.
Requirements
Overseas companies may establish a branch in Cyprus by applying directly to the Department of the Registrar of Companies and Official Receiver, within one month of such establishment.
With regard to the certification of the above documents, experience has shown that the documents must be legalized and “apostilled” in the country of origin. Alternatively, legalization is required both by a notary public and the consul of the Republic of Cyprus in that country.
Branch documents
As in the case of companies it is advisable that the management of the branch and the overseas company are provided, upon the registration of the branch, with a full set of documents, properly legalized and translated, where appropriate, into English or any other language. In the case of a branch such documents normally comprise:
Effect of registration
By registering a Cyprus branch of an overseas company, no new incorporation is effected since there is an already incorporated company abroad which is simply establishing a place of business in Cyprus.
The name of the branch is the same with the name of the overseas company.
Annual Financial Statements
The branch must file with the Registrar of Companies, a certified copy of the balance sheet and profit and loss account of the parent corporation, translated into Greek.
Partnership
The Law
The law governing partnerships is the Partnership and Business Names Law, Cap. 116. This is identical to its English counterpart.
Registration procedure
The registration of a partnership in Cyprus is effected by submitting a return to the Registrar containing the name, object and duration of the partnership, as well as the names and addresses of the partners and their authority to bind the partnership.
Definition
The legal definition of a partnership is the relationship between two or more persons carrying on business in common with a view to profit. Joint ownership, however, does not amount to partnership. There are two types of partnerships as described below.
General Partnership
With a few exceptions, any form of business may be carried on in Cyprus by a partnership. A partnership may not, however, consist of more than 20 persons. There is no requirement that all or any of the partners be Cypriot nationals and a corporate body may be a partner.
Partners and Liability
In general, the partners are jointly liable to the creditors for the debts and obligations of the partnership firm, and each of the partners is also personally liable for all the debts of the firm not satisfied by the partnership assets. Their rights and obligations are governed by the partnership agreement and by the above law.
Limited Partnership
The law also provides for a limited partnership with one or more general partners, who manage the firm’s business and have unlimited liability, and one or more limited partners who invest a fixed amount of capital in the firm and are not liable for its debts and obligations beyond the amount of the capital. Limited partnerships are not common.
Companies
Legal forms of Companies under the Cyprus Law
1. Company Limited by shares which is subdivided into:
- Public companies and
- Private companies which are also subdivided into:
- Exempt Private Company
- Limited Private Company
2. Company Limited by guarantee
The Partnerships and Business Name Law, Chapter 116, also provides for two general types of Partnerships:
- General Partnership
- Limited Partnership
Further, section 347 of the companies Law Chapter 113 provides for the registration in Cyprus of foreign companies under the form of a branch.
Requirements for establishing a Company
As from 1st October 2004, the Council of Ministers has approved the complete freedom of the policy governing direct investments from non-residents in Cyprus.
Consequently, non-residents who wish to establish a Company in Cyprus, or acquire shares in existing Cyprus companies, or otherwise to invest in or from Cyprus, no longer require approval by the Central Bank of Cyprus. Such applications should now be addressed directly to the Department of Registrar of Companies and Official Receiver.
The same applies for direct and portfolio investments by natural or legal persons from EU member states. Investors from the EU wishing to register a company in Cyprus or acquire shares in existing Cypriot legal entities should apply directly to the Registrar of Companies.
Registration
The non-residents’ share or participation must be registered in their names or in the names of their nominees at the department of the Registrar of Companies.
Confidentiality
It is possible to obtain absolute secrecy of the identity of the shareholders, either through trust fiduciary agreements or through nominees or through other companies. Business entities are required to prepare and submit to the Department of Finance and the Department of Inland Revenue annual financial statements audited by auditors practicing on the island.
Administration
Companies carry on business activities in and outside Cyprus, whilst it may well have offices and/or have its administration in Cyprus and have local and/or expatriate employees.
Registered Office
It is necessary for all Cypriot companies to have a registered office in Cyprus.
Objects
There is no restriction as to the type or objects and scope of the company. The Memorandum may be changed following an application to the court and having obtained the relevant court order, whilst the articles may be changed by special resolution.
Directors
It is not necessary for directors to hold qualification shares.
The minimum number of directors is one (natural or corporate) but in such a case he cannot also be the secretary of the company.
Alternate directors may be appointed. The minimum number of shareholders is one, natural or corporate. The annual general meeting and/or any extraordinary general meeting of the shareholders may be held in Cyprus.
Meetings
Also meetings of the board of directors may be held in Cyprus. A company must maintain a register of members, directors, secretaries, mortgage or charges and other statutory books.
Branches for Foreign Entities
The Law
A branch of a foreign company may be registered in Cyprus under section 347 of the Companies Law, Chapter 113.
Requirements
Overseas companies may establish a branch in Cyprus by applying directly to the Department of the Registrar of Companies and Official Receiver, within one month of such establishment.
With regard to the certification of the above documents, experience has shown that the documents must be legalized and “apostilled” in the country of origin. Alternatively, legalization is required both by a notary public and the consul of the Republic of Cyprus in that country.
Branch documents
As in the case of companies it is advisable that the management of the branch and the overseas company are provided, upon the registration of the branch, with a full set of documents, properly legalized and translated, where appropriate, into English or any other language. In the case of a branch such documents normally comprise:
- Certificate of registration
- The charter of the overseas company or other instrument defining its constitution
- List of directors and secretary of the company, name of at least one person resident in Cyprus authorized to accept on behalf of the company any notices required to be served on the company.
- Any other information and documentation pertaining to the activities of the branch and to the date of its establishment.
Effect of registration
By registering a Cyprus branch of an overseas company, no new incorporation is effected since there is an already incorporated company abroad which is simply establishing a place of business in Cyprus.
The name of the branch is the same with the name of the overseas company.
Annual Financial Statements
The branch must file with the Registrar of Companies, a certified copy of the balance sheet and profit and loss account of the parent corporation, translated into Greek.
Partnership
The Law
The law governing partnerships is the Partnership and Business Names Law, Cap. 116. This is identical to its English counterpart.
Registration procedure
The registration of a partnership in Cyprus is effected by submitting a return to the Registrar containing the name, object and duration of the partnership, as well as the names and addresses of the partners and their authority to bind the partnership.
Definition
The legal definition of a partnership is the relationship between two or more persons carrying on business in common with a view to profit. Joint ownership, however, does not amount to partnership. There are two types of partnerships as described below.
General Partnership
With a few exceptions, any form of business may be carried on in Cyprus by a partnership. A partnership may not, however, consist of more than 20 persons. There is no requirement that all or any of the partners be Cypriot nationals and a corporate body may be a partner.
Partners and Liability
In general, the partners are jointly liable to the creditors for the debts and obligations of the partnership firm, and each of the partners is also personally liable for all the debts of the firm not satisfied by the partnership assets. Their rights and obligations are governed by the partnership agreement and by the above law.
Limited Partnership
The law also provides for a limited partnership with one or more general partners, who manage the firm’s business and have unlimited liability, and one or more limited partners who invest a fixed amount of capital in the firm and are not liable for its debts and obligations beyond the amount of the capital. Limited partnerships are not common.