CYPRUS COMPANY FORMATION
COMMON REPORTING STANDARDS
All content presented here is for information purposes only.
Company formation, also known as Cyprus company registration, is the process of establishing and registering a company. Unlike other jurisdictions, in 2020 this process in Cyprus is still heavily paper-based and is not automated.
The processes involved in Cyprus company formation include:
Cyprus has a very large number of dormant companies. As a result, the Cyprus Registrar of Companies is concerned that the identity of one company does not impinge or affect another. Name selection is therefore an important aspect of Cyprus company registration.
In order to register a name, an investor should:
Search the Cyprus Registrar of Companies to see what similar names have already been registered;
Have 2-3 options of names, often with acronyms included in the names, to provide differentiation from existing Cyprus companies.
The most frequently-used company forms in Cyprus are limited liability companies. The capital paid in is typically € 1,000.00. However, each investor should review the capital adequacy rules and Cyprus company forms most suitable to their operations.
Articles of Association / Company Statutes
The articles of association, or company statutes, outline the basic operations and activities of the Cyprus company. In Cyprus, investors often overlook this element of the company registration process, and as a result their lawyers or accountants simply re-use an existing document. This can create problems later on.
We strongly recommend implementing a comprehensive review and development of the Cyprus company articles of association. These should include:
Mission and core activities of the company
Governance structure and how key decisions will be made
The votes needed for key decisions (such as appointment of auditors, approval of accounts, etc);
The rights and responsibilities of different key executives in the company;
What happens if there is a deadlock in decision-making;
Legal remedies and procedures for resolving shareholder disputes;
Processes for replacing key executives and/or shareholders.
Key Positions & Registered Office
A Cyprus company requires:
At least one Director, who may be a shareholder or a shareholder's representative;
A Company Secretary, who is responsible for maintaining all documentation and communications with government authorities.
Companies which have shareholders not resident in Cyprus need to appoint a majority of directors who are Cypriot citizens or residents in order to benefit from the Cyprus tax jurisdiction.
Companies also need to appoint, either in an external or internal capacity:
An accountant (this function can be fulfilled internally)
An auditor (this function should be external and independent).
A registered office is also needed. Please note that companies today need to comply with Cyprus substance requirements.
The legal registration is implemented by a lawyer. The following documentation is provided by the Cyprus Registrar of Companies:
Company Registration Certificate, which provides the date of registration and company registration number;
Shareholder/Director Certificate, which outlines the shareholders and/or directors of the firm;
Registered Address: the certificate with the registered address of the Cyprus company.
This documentation can be requested in Greek or English languages.
Once the registration process is complete, a Cyprus company typically needs to implement at least three further steps:
Registration for the Value Added Tax: VAT registration is a condition for Cyprus companies doing a certain level of turnover.
Registration with Social Security: If the company will employ people, it needs to register with the social security administration.
Opening a Bank Account: While not necessary, a Cyprus bank account is useful and a strong sign of Cyprus substance.