How To Set Up A Cyprus Company


  • Christina Sarris, Attorney at law
    Partner at Polakis Sarris & Co Lawyers

Why invest through a Cyprus Legal Entity?

Cyprus is a small but significant country and an already established international business center. Especially after the accession of our country to the EU in 2004, a new door of opportunities has opened for foreign enterprises and individual investors to explore and take advantage of the suitability of the Cyprus legal entities. The Cyprus Legal System follows in general lines English and Anglosaxon Law including Common Law and Equity Law. When we speak about Companies, the basic Law is the Companies Law Chapter 113, which is identical to the English Companies Act of 1948 with very few amendments. When we speak about Partnerships, the basic Law is the Partnership and Business Names Law Chapter 116. When it comes to business through Cyprus, investors and businessmen have the option of using one of the following legal entities:

  • a limited liability Company
  • a partnership
  • a branch of a foreign / overseas Company
  • the use of own name The most commonly used legal entity is the registration and establishment of limited liability companies, which carry the following characteristics:
  • The minimum number of shareholders is one and the maximum is 50
  • The is no personal liability of the shareholders al all except for the payment of the registration fees for the Company
  • Bearer shares are not allowed. If however, anonymity is required by the shareholders, then the possibility for the use of a nominee or of another bearer share company as a shareholder may be examined.
  • The minimum number of Directors is 1. The Board Meetings of the Company can take place in Cyprus or anywhere else in the world or can be made through telephone conferences or via the issuance of proxies. However, in order for the company to enjoy full tax and other benefits, you have to bear in mind that it is vital to establish that the management and control of the Company is affected in Cyprus and it is for this reason that we advise that the majority Company directors reside and meet in Cyprus.
  • Company bank accounts of any currency may be opened in Cyprus or abroad without any difficulties.
  • Annual audited accounts must be filed with the Inland Revenue
  • And Annual Returns must also be filed with the Registrar of Companies.
  • The Company’s file with the Registrar of Companies is open to the public for inspection
  • Charges, mortgages, etc may be registered with the Registrar.
  • The Company must also draft and file its Article of Association and Memorandum of Association
  • The word “Limited” must appear at the end of the name of each Company.
  • There is a prohibition as to the invitation to the public to subscribe for any shares.

What do the Articles of Association Include?

The Articles of Association contain the regulations for the management of the Company and provisions as to the:

  • Dividents
  • The accounts and the audit
  • The voting rights amongst the Board of Directors
  • The Annual and Extraordinary General Meetings
  • The Appointment and Removal of Directors
  • The possibility of loans to Directors, pensions, annuities etc
  • The winding up of the company.

What does the Memorandum of Association contain?

The Memorandum of Association contain:

  • The name of the Company
  • The Objects of the Company
  • The place of the registered office of the company which must be in Cyprus
  • The authorized and paid up capital. Here I would like to indicate that there is no minimum or maximum required sum and it may be denoted in any international currency. The suggested initial amount is EUR 2.000. Stamp duty is always paid on the nominal capital.
  • Finally the MoA must contain the details of the shareholders (ie names and address.)

How do we register a Cyprus Company?

In order to proceed with the registration and establishment of a Cyprus Company the investor or businessman must provide the following information:

The name, residency address, occupation, nationality and a valid passport copy of the proposed shareholders or ultimate beneficial owners of the Company. If another legal entity will act as the proposed shareholder of the Cyprus Company then full particulars of this company (ie corporate documentation) must be provided as well as the details of its shareholders and/or beneficial owners.

  • The proposed name for the Cyprus Company, which of course must be approved for use by the Company’s Registrar.
  • A description of the activity and the objects of the Company
  • The details of the proposed Directors (i.e. names, residency address, occupation, nationality and a valid passport copy
  • And finally the Proposed Capital (both nominal and paid up) In conclusion it is vital to note that for a Cyprus Company to be able to enjoy all the available benefits (tax and other), the management and control must be established to be carried out in Cyprus and it is for this reason that the investor would have to consider the appointment of local directors within the Company’s Boards of Directors.

What is Partnerships and Business Names Law?

The first distinction that needs to be made is between:

  • General Partnerships and Limited Partnerships.
  • In General Partnerships every partner is liable jointly and severally with all other partners for an unlimited amount for the debts and other obligations of the partnership. A partner may be an individual physical person or a legal entity.
  • In Limited Partnerships, at least one of the partners must have unlimited liability for the debts of the Partnership and the rest of the partners may have limited liability. The partner with the unlimited liability may be a Limited Liability Company.

What are Branches of Overseas Companies?

  • The registration of overseas companies as a Cyprus Branch is regulated by the Companies Law s. 347 and is rather simple.
  • Branches are taxed at the same tax rate as the limited liability companies and they also enjoy all the other advantages. If however, the management and control is outside Cyprus then they pay no tax in Cyprus.

What is Sole Proprietorship (Business Name Law)?

  • Any Cypriot or EU citizen may carry out business either on his or her own name or through a business name which can be registered under Law 116. The liability is of course unlimited.

What are the Advantages of Cyprus Companies?

  • Corporate Tax is calculated at only 10% on the net profits of the Company (the lowest corporate imposed tax in Europe)
  • There is no withholding tax on dividends or any other tax Polakis Sarris & Co Lawyers
  • There is no capital gains tax on the sale of shares of any local or overseas companies or on immovable properties, unless the immovable property is in Cyprus.
  • There is no estate duty on the inheritance of shares.
  • There is the freedom of transferable accounts of any currency anywhere in the world.
  • Finally there is no exchange control or any other restrictions.

Why choose Cyprus?

Cyprus offers excellent organised professional services including

  • legal
  • auditing
  • Accounting; and
  • Management services

Additionally, Cyprus offers

  • its good industrial relations
  • minimum of red tape
  • law and order prevailance
  • a favorable and simple legal system
  • and ideal geographic location
  • good air connections
  • excellent climate
  • Pleasant European style living conditions
  • Relatively low costs of living
  • High quality of hotels, housing and offices
  • Availability of foreign speaking schools
  • Excellent banking services
  • ExistenceofDoubleTaxTreatieswith46Countriesand3newcountriesundernegotiations
  • Any company may be a member of the Cyprus Chamber of Commerce and Industry
  • And easily available processes of legalization and appostilled of documents.

International activities?

Due to the low corporate tax rate of 10% and all the other advantages, the existence of 43 Double tax treaties, as well as the geographical location of the island and infrastructure, many foreign enterprises and individual investors consider Cyprus as an ideal location for their international tax planning scheme, setting up companies which are engaged, amongst other areas, in:

  • Advertising and Marketing
  • Architecture and Engineering
  • Captive Insurance
  • Constructions and Drilling
  • Employment
  • Finance
  • Holding
  • Investment Fund
  • Leasing
  • Press (Magazines and Newspapers)
  • Management
  • Real Estate and Land Development
  • Royalties
  • Sales
  • Shipping and Ship management
  • Trading
  • And Trusts.

As professional legal advisors offering full corporate services from the setting up of legal entities, to the management of these entities and the tax planning advice that we offer our worldwide clients for more than 32 years now, we are of the opinion that the Cyprus is an ideal option for international investors.




Log in to your account or