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The Republic of Cyprus The Republic of Cyprus is located on an island in the north-eastern Mediterranean Sea. The population of Cyprus is around 700,000 people. Capital - Nicosia. Official languages - English and Greek. Cyprus gained independence from Britain in 1960, 1 May 2004 the Greek part of the island joined the European Union. Literacy rate in Cyprus is 97%. Currency-EUR (from 01/01/2008) Background: Independence from the UK was approved in 1960 with constitutional guarantees by the Greek Cypriot majority to the Turkish Cypriot minority. In 1974 a Greek-sponsored attempt to seize the government was met by military intervention from Turkey, which soon controlled almost 40% of the island. In 1983 the Turkish-held area declared itself the Turkish Republic of Northern Cyprus, but it is recognized only by Turkey. Cyprus talks resumed in December 1999 to prepare the ground for a comprehensive settlement.

 

 Cyprus


Economy - overview: Economic affairs are dominated by the division of the country into the southern (Greek) area controlled by the Cyprus Government and the northern Turkish Cypriot-administered area. The Greek Cypriot economy is prosperous but highly susceptible to external shocks. Erratic growth rates in the 1990s reflect the economy's vulnerability to swings in tourist arrivals, caused by political instability on the island and fluctuations in economic conditions in Western Europe. Economic policy in the south is focused on meeting the criteria for admission to the E.U. As in the Turkish sector, water shortage is a growing problem, and several desalination plants are planned. The Turkish Cypriot economy has about one-fifth the population and one-third the per capita GDP of the south. Because it is recognized only by Turkey, it has had much difficulty arranging foreign financing, and foreign firms have hesitated to invest there. The economy remains heavily dependent on agriculture and government service, which together employ about half of the work force. Moreover, the small, vulnerable economy has suffered because the Turkish lira is legal tender. To compensate for the economy's weakness, Turkey provides direct and indirect aid to tourism, education, industry, etc.

Characteristics of companies registered in Cyprus


Corporate Law

Company Law, Section 113, as amended.


Types of registered companies

  •  Private company limited by shares - Company with limited liability closed
  •  Public company limited by shares - Limited liability company of open type
  •  Exempt private company - Closed company, exemption
  •  Company limited by guarantee - Company limited by the amount guaranteed
  •  Partnership - Partnership
  •  Trust - Trust


Capital

The minimum size of registered capital of the company - 1,000 EUR. The proposed share capital of 1,000 EUR, divided into 1,000 shares of par value 1EUR


Requirements for the company:

  •     The minimum number of shareholders - one
  •     Minimum number of directors - one (recommended at least one director - a resident of Cyprus, for the use of agreements on avoidance of double taxation)
  •     Shareholder (s) and director (s) can be both physical and legal persons.
  •     Nominee directors and shareholders - are allowed
  •     Requires the Secretary of the company (may be an individual or a legal entity)
  •     The registered office in Cyprus is compulsory for every company


Taxation

From 1 January 2003 all newly registered companies of Cyprus are subject to 10% tax on their profits. Dividends paid by Cyprus tax residents are taxed at a rate of 15%. Dividends paid to non-residents of Cyprus are exempt from taxation. VAT - 15%. Cyprus has signed a significant number of agreements on avoidance of double taxation. There are currently 28 such agreements, 3 are in the process of ratification and a few more - in the stage of negotiations. Signed and ratified by the Republic of Cyprus contracts are based on the model of the Organization for Economic Cooperation and Development (OECD). Cyprus is one of the leading offshore centers in the world having such a large number of agreements on avoidance of double taxation.

There are treaties with the following countries: Austria, Bulgaria, Canada, Hungary, Germany, Greece, Denmark, Egypt, India, Ireland, Italy, Canada, China, Kuwait, Malta, Norway, Poland, Romania, Russia, (including all the CIS countries, except for Kazakhstan), Slovakia, Syria, United States, France, Czech Republic, Sweden, and the countries of former Yugoslavia. We discuss the treaty with Belgium, Finland and Singapore. Under negotiation: Armenia, Thailand, and Ukraine.


Annual Fees

The house of representatives has passed laws to combat the global economic crisis and to reduce the sovereign deficit of Cyprus.

Amongst the measures an annual levy of €350 must be paid by every company registered with the department of the Registrar of Companies and Official Receiver unless one or more of the exemption applies.


Exemptions

The relevant amendment goes on to specify that a Cyprus company not holding any assets or an inactive company is not required to pay the levy of €350. In other words no assets/activities, no levy.

Furthermore if a Cypriot company belongs to a group of Cypriot companies the levy is capped at €20.000 for the entire group irrespective of the number of entities within the group, e.g. 100 x 350 = €20.000.

An exemption is also applicable to companies owning immovable property located in the non Government controlled areas of Cyprus.


Payment of Levy

The annual charge for 2011 must be paid by 31st of December 2011, whereas the levy for 2012 onwards must be paid by 30th of June of each year.

For newly registered Cypriot companies, the first annual charge is payable by 30th June in the year following incorporation. For example, companies registered in 2011, will pay their first annual charge by 30th of June 2012.

The department of the Registrar of Companies and Official Receiver have recently circulated a form which requires the inclusion of the name, the registered number and other details concerning the company for which the levy is being paid. Furthermore by the circulation of the form the manner in which the payment will be made has been clarified, i.e. the levy will be paid to the department of the Registrar of Companies and Official Receiver.


Consequences of Non-Payment of the Levy

Cyprus companies required to pay the levy and who do not pay the levy in the prescribed period, but the levy is paid within two months from the due date, a penalty of 10% applies. The levy is further increased to 30% if the levy is paid within five months from the due date.

If the levy is not paid within five months from the due date, the department of the Registrar of Companies and Official Receiver will remove the company from the list of registered companies by invoking the procedure for striking off companies, Section 327 of the Companies Law, Chapter 113 of the laws of Cyprus.

If the company is removed from the list of registered companies and within two years after the removal the amount of €500 is paid to the department of the Registrar of Companies and Official Receiver the Cyprus company may be reinstated to the list of active companies. For periods exceeding two years the charge is increased to €750.


Reporting / Meetings

Annual Report, which contains details of all those who have held shares during the year and directors during the year must be submitted to the Cyprus Taxation Authority and the Central Bank of Cyprus. In addition, every Cyprus company must prepare audited accounts and submit them to the Central Bank and the Tax office.

Each year, all companies must hold an annual general meeting within fifteen months after the previous general meeting. Annual and other meetings of shareholders and directors may be held in Cyprus or abroad, according to the decision of directors or shareholders.


Audit of financial statements and bookkeeping

Cyprus companies must prepare every year and apply to the Central Bank and tax authorities the company's financial statements, certified by auditors. In the case of non-compliance with this requirement the Central Bank of Cyprus may revoke the license of the company and the company will be liquidated. In addition, tax authorities may initiate criminal proceedings against the company.

If the company fails to file reports to the tax authorities within one year after the end of the fiscal year, the company's accrued tax will be imposed a fine of 5%.

Countries that signed treaties on avoidance of double taxation:
Russia, Ukraine and most of the CIS (except Georgia), Austria, Belgium, Bulgaria, Great Britain, Hungary, Germany, Greece, Denmark, Egypt, Ireland, Italy, Canada, China, Kuwait, Malta, Norway, Poland, Romania, Syria, Slovakia, United States, Finland, France, Czech Republic, Sweden, the former Yugoslavia.

 

International Business Company Standard order

 International Business Company with Nominee Services

EUR 1,650.00

 EUR 2,450.00

Standard order

The documents/services which are provided to the client are:

  • Certificate of Incorporation 
  • First Resolution of Director
  • Memorandum and Articles of Association
  • Share Certificate
  • Courier services
  • Corporate seal                     

       Price - EUR 1,650.00 includes:

  • Payment of government duties for registration of offshore company
  • Services of the registered office & registered agent in Cyprus for first year
  • Services of registered office for first year.
  • Courier

Standard order with Nominee Services:

The documents/services which are provided to the client are:

  • Certificate of Incorporation
  • Memorandum and Articles;
  • First resolution of the Directors
  • Appointment of First Directors;
  • Share Certificate;
  • Deed of Trast
  • Register of the Directors and Shareholders;
  • Letter of the acceptance of the Director;
  • Power of Attornay;
  • Apostille Bound Set in the country of registration;
  • Agreement for the provision of nominee services
  • One round rubber company stamp

Price - EUR 2,450.00 includes:

  • Payment of government duties for registration of offshore company;
  • Services of the registered office & registered agent in Cyprus for first year
  • Services of registered office for first year;
  • Nominee services for first year;
  • Courier.


Ready-made (shelf) companies

We have specially registered some companies for your convenience if you require the company immediately or if you require company with older incorporation date. You can sign the bank account opening forms as soon as you have purchased the shelf company which lets you to receive the account number and IBAN number straight away.
All these companies have not traded or entered into any dealings or obligations whatsoever. Since their incorporation, their documents have been kept motionless on the shelf in our office.
Please note that due to the fact that these are "shelf" companies they are without Apostille and most probably, you will need it so it will take 1-2 business days to arrange for it. And if you are a new customer it will take some time to fill out all the necessary forms due to our companies "know your customer" policy.
The Price for the shelf company varies depending on the incorporation date of the company.

For more detailed information about company formation in Cyprus or "shelf" companies please contact us and our experts will be glad to help you in any question you may have. Our telephone number is + 357 22 680602 and e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.