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Cyprus Legal Entities
1.1. Characteristics of a Cyprus Private Company limited by shares.
Evidently the most popular type of Companies in the business world, the general characteristics of this type being the following:
- The minimum number of members is 1 and the maximum is 50;
- Any invitation to the public to subscribe for its shares or debentures is prohibited;
- The liability of every member is limited to the amount of their subscribed shares;
- No bearer shares can be issued (however nominee services can be offered);
- Preferential shares or different classes of shares can be issued;
- The right to transfer shares is restricted;
- The word “limited” must appear at the end of the name of the company;
- There must be at least 1 Director who can be either Cypriot of foreigner and the Board Meetings can be held anywhere in the world;
- The company must have a Registered Address and a company Secretary in Cyprus;
- The Secretary maintains the Register of Members, the Minute Book recording all the Board Meetings and Resolutions, the Register of Charges, the Register of Directors and Secretary and the Company seal (under its custody); and
- Any charges against the company must be registered with the Company Registrar in order to ensure priority and protection against other creditors of the Company.
What is important to know when registering this type of Legal entity, is that through nominee holding, the beneficial owner may maintain their personal information confidential. This confidentiality is maintained as long as the company and its ultimate beneficial owners are not involved in any criminal activity. Furthermore, if the beneficial owner chooses to open an account with a bank in Cyprus, the bank may request information for the needs of creating the account.
1.2. Characteristics of a Public Company limited by shares
Some characteristics of Public Companies limited by shares are:
- They require at least 7 or more members;
- It is mandatory to have at least 2 directors;
- They can issue share warrants;
- Invitation to the public to subscribe for its shares or debentures is allowed; and
- They must have at least EUR 25.629 share capital.
1.3. Characteristics of a Company limited by guarantee
Usually, this type of Company is used to incorporate non-profit making organizations, in line with section 20 of Cyprus Company Law (CAP 113). Some of its characteristics are:
- Each member’s liability is limited to the amount agreed in the Memorandum of Association to be contributed in the event the company goes into liquidation; and
- They can be registered with or without a share capital.
If you want to register the LTD company, please visit the LTD requirements page
To read more about company maintenance in Cyprus jurisdiction, please click the link here
Branches of foreign legal entities
Any company incorporated outside of Cyprus may establish a legal presence in Cyprus through the legal entity of a branch in Cyprus – the so-called overseas companies.
To register a branch the following documents must be filed translated into Greek:
- A certified true translation copy of the constitutional documents of the company (Memorandum and Articles of Association, its charter, etc.)
- Information regarding the Directors and Secretary of the Company;
- Name and address of at least one person who is a resident of Cyprus duly authorized to receive on behalf of the company any notices.
If the foreign legal entity is a bank, insurance or an investment company then special licenses must also be obtained from the relevant regulatory authorities.
The Cyprus Company Law changes implemented in 2003 as part of the EU accession process have also affected the rules covering branches, in that every foreign corporation post EU accession, that maintains a branch in Cyprus must now submit, for every financial year, copies of its financial statements as presented in its last AGM and published in accordance with its country of incorporation.
For EU corporations though the law provides some exemptions; these 3 are exempted from submitting separate branch financial statements, if they publish their financial statements in their countries of registration and they submit them to the Registrar of Companies.
European Public Limited Liability Companies (SE)
This kind of legal entity can be registered in Cyprus either as a result of a merger between two Public Companies, registered at least in two different European countries, or by formation of a new company, under certain circumstances or by transformation of an existing Public Company into European Company.
Partnerships are governed by the Partnerships and Business Names Law, Cap 116, as amended and which is also based on English Legislation. A Partnership exists between two parties and usually consists of twenty (20) natural or legal entities, having a common view to profit. There are currently two kinds of Partnerships within Cyprus: the general and the limited liability partnerships. Their differences mainly focus with reference to liability as in a general partnership every partner is liable several ad jointly with the other partners without limit for all debts and obligations coming from the partnership, whilst within a limited partnership consists of at least one general partner liable for all the debts and obligations of the partnership.
Trusts in Cyprus are mostly governed by the Trustee Law (CAP 193) which was enacted in 1955, being founded on the English 1927 Trustees Act.
There are essentially separated into categories such as Private Trusts, Express Private Trusts, Resulting Trust, Constructive Trust, Implied Trusts, Charitable Trusts, Fixed Trusts, and Discretionary Trust. A Trustee’s main duties are to administer the trust property and/or assets in good faith and to comply with the terms stipulated within the trust.
Effect of the four freedoms concept on a Cyprus registered company
Re-domiciliation of Companies
A company registered in Cyprus may re-domicile to another country provided that the jurisdiction of this country authorizes or allows that legal entities registered in that other country may re-domicile in Cyprus.
As from the end of 2007, it is possible to have a merger of a Cyprus company with one or more companies from the European Union and the resulting company may register in Cyprus or in an EU country or alternatively two or more companies from the EU can merge and register the resulting company in Cyprus.