The Cyprus International Business Company
The companies' law in Cyprus is the Cyprus Companies Law, Cap.113, which is based on the English 1948 Companies Act. Single member companies were introduced by the Companies (Amendment) Act 2000 and other amending legislation was passed in 2000 and 2001.
In this section we consider only private companies. A private company is one which by its articles:
- Restricts the right to transfer its shares
- Limits the number of its members to 50
- Prohibits any public subscription to shares or debentures
When wholly foreign-owned, a private company is referred to as an international business company. Before 1st January 2003, an offshore company was subject to a special, favourable, tax regime but the distinction was abolished and all companies are now taxed on the same basis.
The normal time to form a Cyprus company is three weeks. In addition to the usual proof of identity and address documents the owner must provide a reference from a bank recognised for the purpose by the Central Bank of Cyprus.
In Cyprus, a company's formation documents and its annual return must be filed in Greek; the same applies to accounts when these need to be filed.
Amendments made in 2003 to the Companies Law as part of the EU accession process included the following changes:
- Every company must prepare a full set of financial statements in accordance with International Financial Reporting Standards, and every parent company that has one or more subsidiaries, other than a company which is itself a wholly owned subsidiary, should present consolidated financial statements
- Under article 120, every company must complete an annual return within a period of 42 days from the date of its Annual General Meeting and must file immediately with the Registrar of Companies, a copy of the annual return, signed by a director and the company secretary. Under article 121, the annual return filed with the Registrar of Companies must be accompanied by the full set of financial statements
Exempt Private Company
A private company limited by shares is exempt if:
- No body corporate other than another exempt company holds any of its shares or debentures
- The number of debenture holders is not more than 50
- No body corporate is a director of the company
The main advantages of an exempt private company are:
- It need not file accounts with its Annual Return
- It is not subject to the statutory restrictions on loans to directors
To talk to an adviser specialising in offshore company formation in Cyprus, call us on +353 1 431 9663 or complete our contact form.
