Cyprus companies law: Provisions and Company Establishment

The Cyprus Companies Law Cap 113 is based on the English Companies Act of 1948. It was initially written in English and then translated into the Greek language. It was subject to many changes throughout the years.

Definition of Cyprus Company

Cyprus Company is a legal entity established under the Law on Companies (Chapter 113) to carry out legal activities. A company in Cyprus can have five alternative forms:

• Private company of limited liability with shares
• Public limited liability company with shares
• Limited Liability Company with guarantee without share capital
• Limited Liability Company with guarantee and share capital
• Variable capital investment company

The private company limited by shares is the most widely used. It is used for business activities in Cyprus and internationally by foreign investors.

Principle of Limited Liability

An essential aspect of a company is that it is an independent legal entity. This means that it is considered a legal person entirely separate from the people who establish, manage, or own it.

Therefore, the company members are not personally responsible for the debts or other obligations of the company. As a result, they can not be sued by the creditors of the company.

Registrar of companies

The Department of the registrar of companies and official receiver is a part of the Ministry of Commerce, Energy and Industry. The Department is headed by the Registrar of companies, Mr. Spyros Kokkinos.

It is divided into three sections:

1. Companies section
2. Intellectual and industrial property
3. Insolvency service

The department is responsible for the registration and keeping of the register of the following:

• Companies
• Partnerships
• Trade Names
• Trademarks
• Patents
• Industrial Plans

It also has the duty for the management of assets of insolvent companies and individuals.

Company Registration

To register a company in Cyprus, you need the following:

• name of the company
• address of the registered office
• Officers of the company (directors and secretary)
• Shareholders and share capital
• Activities of the company
• memorandum and articles of association

The lawyer submits the company for registration. The registrar will confirm that all the documents submitted are according to the laws and regulations. The company registration is then published in the Official Gazette, and a certificate of incorporation is issued.

The issuance of the certificate of incorporation marks the beginning of the legal existence of the company.

Read more about Cyprus company formation procedure.

After the Registration

Registration at the Tax Department

Each company is obliged to be registered in the Tax Registry. This must take place within sixty (60) days from the date of its establishment. On registration, a tax identification number (TIN) is given.

V.A.T. Department

Also, in certain cases, a company needs to be included in the VAT register:

Compulsory:

When the value of taxable transactions of goods and services exceeds €15,600. This is calculated for the previous 12 months or to be made within the next 30 days.

Voluntary:

• A trader with taxable supplies that do not exceed the provisions of €15.600.
• Intending traders who perform business to make taxable supplies in the future.
• Businesses making transactions outside Cyprus. This is allowed provided their management and control are exercised in Cyprus.

Registration in Social Insurance

Every employer has an obligation to register in the Register of Employers of the Social Security Services.

Securing Trademark

Trademark registration is also important. This is to secure the rights of the company and to distinguish products and services in the market.

Corporate Compliance

The company has the duty to inform the Companies registrar of any change done. Those include the below:

• change of name
• details of directors and secretary
• changes in the share capital
• change of registered office
• registration of charges on company assets.

Once such a change is submitted, the registrar issues the new certificate.

At the end of each tax year, the company must prepare audited financial statements. Those are submitted to the Tax department together with the tax return.

Also, once every calendar year, the company prepares and submits the annual return (HE32). This is submitted with a copy of the financial statements.

In addition, the company is obliged to pay the annual levy, which is € 350 (until June 30 of each year).