Situated in the Eastern Mediterranean, the island of Cyprus is at the crossroads of three continents. It has an excellent business and financial structure and offers many tax incentives. Cyprus company law is based on British company law. Since 1977 over 40,000 international business companies have been registered in Cyprus whilst over 1,000 companies have fully fledged offices in Cyprus.
WHO CAN REGISTER A CYPRIOT COMPANY?
Central Bank of Cyprus permission is no longer required for foreign nationals to hold shares in Cypriot companies. Anyone may now register a company in Cyprus, i.e. Cypriot nationals, European nationals, and non-European nationals alike. All are treated equally, and the process of registration has been made extremely simple. The registration of a company in Cyprus does not require the presence of the beneficial shareholders on the Island.
IS ANONYMITY POSSIBLE?
Yes anonymity is possible by appointing nominee shareholders, nominee directors and a nominee company secretary. The interests of the beneficial shareholder are safeguarded by the issue of a declaration of trust by the nominee in favour of the beneficial shareholder or shareholders. Where nominees are used, the disclosure of the beneficial shareholders or real directors is not a matter of public record, and the names need never be disclosed. The directors of the company will however encounter difficulties when they come to open a corporate bank account, and will be required to disclose the ultimate beneficial shareholders of the company. The disclosure of this information to the bank does not mean that the information is available to the public. Banks will not disclose information to anyone unless requested to do so by a court of law in Cyprus. Such incidents are rare, and necessarily involve the suspicion of money laundering and/or connection with terrorist organisations.
HOW LONG DOES IT TAKE TO REGISTER A COMPANY?
There are two routes that can be taken in order to register a company – either expedited, or non-expedited. In Cyprus, there is no set time within which the registration procedure is completed. Do not believe any claims guaranteeing registration within a specified period. The actual time taken depends on the existing workload of the registration department of the Registrar of Companies, as well as whether or not an additional fee has been paid for an expedited service. To register a company from scratch, takes approximately 10 to 18 working days. The first step in any registration is to give the company a name. A name or names, must therefore be submitted to the Registrar of Companies for approval. This can take between 5 – 10 working days. Once approval has been received, it is possible to proceed onto the next step which is the actual company registration. The process of registration takes a further 5 to 8 working days.
TAXES AND ACCOUNTS
Cyprus is not a tax haven but a low tax area with an annual tax rate between 0% and 10% payable in the case of an International Business Company. Cyprus has numerous double tax treaties for the avoidance of double taxation. In particular, extremely favourable treaties have been concluded with many countries for receipt of dividends, interest and royalty payments. Audited accounts must be filed with the Commissioner of Income Tax and the Central Bank of Cyprus. INCORPORATION/NAME It normally takes one or two weeks to incorporate a new company, but shelf companies (i.e. already established) are available. All companies must end with the word “Limited” and there are restrictions on the use of particular words in the company’s name, such as “Corporation”, “International”, “Group”, “Financial” etc
A minimum of one director, one secretary and one shareholder is required. To fully benefit from the various double taxation agreements, it is advisable to appoint at least one local Cypriot director.
DISCLOSURE OF INFORMATION
During the incorporation process, a bank or other reference, a curriculum vitae and a passport copy for each beneficial owner should be submitted together with proof of address (such as utility bill).