- 11 September 2018
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The Private Company limited by shares is the most popular business form in Cyprus. Foreign investors majority choose to set up this business form and it can be established by EU or non-EU citizens/companies.
Moreover, the Shareholder(s) of the company can remain anonymous creating a trust.
The settlοr will transfer the property to the trustee and the trustee will have legal obligation to take care of assets on behalf of the trust's beneficiary or beneficiaries.
Profits of an international trust derived, or deemed to be derived, from a source outside Cyprus are entirely exempt from any tax.
The limited liability company must be registered at the Cypriot Registrar of Companies. Certain documents as well as apply for a company name will need to be prepared by the investor.
Our company formation experts can assist you throughout the company incorporation procedure and help you provide the necessary documents and information.
Requirements for a limited liability company in Cyprus
Limited liability companies in Cyprus can be private or public.
There are no applicable requirements for the minimum share capital of a private limited liability in Cyprus.
Public limited liability companies need to have a minimum share capital of 25629EUR.
The Companies Act regulates the number of shareholders for these companies which is at least one member for the private limited liability company and at least seven members for the public LTD; a private LTD can have up to 50 members.
If you wish that the company be considered ‘Cypriot’ for tax purposes, then the Cyprus legal tax system requires that the management and control of the company should be exercised in Cyprus. So, among other, the majority of the Directors should have their permanent residence in Cyprus.
Our experts can help you know more about the attributions of a company director in Cyprus and the legal requirements for corporate taxation. Our office provides very competitive rates for the annual services of Directors, Secretaries, Shareholders and registered office. Send us an email to discuss your needs and our final fees.
The duties of directors arise out of common law and are, in general, the duty of care and a fiduciary duty against the company. A Director must always act in the best interests of the company and can take decisions relating to all matters of the company.
The Directors are liable in tort to the company if they are found to have acted in a manner inconsistent with their common law duty of care.
Furthermore they are also liable for breach of fiduciary duty if they are held to have acted against the best interests of the company especially if they have sought to gain personal benefits and profits out of their position, without first disclosing such an interest to the shareholders and/or other directors.
The first step when setting up a LTD in Cyprus is to prepare the required documents.
The investor proposes a company name and an application for its approval shall be submitted to the Companies Registrar.
The availability of the name can be checked online. After the name is approved, the investor can start gathering the documents needed to register the company.
The following documents will be requested by the Registrar of Companies:
- completed forms for the purported director/s, secretary and for the registered address of the company;
- form/sworn affidavit by the lawyer who has prepared the Articles and Memorandum of Association;
- the company’s Articles and Memorandum of Association duly signed.
There are various fees associated with the company registration procedure payable to the Registrar of Companies.
Additional requirements for a newly established company in Cyprus include opening a bank account, which we provide for free for our registered companies in Cyprus.
Our company law experts can help you open a limited liability company and also give you information about the other types of companies available in the country.
How much does it cost?
There are 4 kinds of fees involved when setting up a Cyprus company.
- The registration or set up fee.
- The annual fees.
- The accounting/auditing fee.
- The annual expenses payable to the registrar of companies.
- Other fees
This is the fee that you pay to create the company. It is paid only once and it is fixed. The price range for the formation of a company in our office is 1000 -1500 EUR depending on the company’s objects/activities.
Annual fees vary depending on the scope of requested services and may include the fees for the services of nominees, secretary and registered office, administration of the company, maintenance of bank accounts.
- Nominee services are divided into:
- a) Nominee shareholders and
- b) Nominee directors
Nominees are used in order to ensure the anonymity of the client.
Our office provides very competitive rates for nominee services.
- Moreover, a company has to designate a registered office in Cyprus and have a secretary (there are exceptions) .
The registered office is usually the address of the law office which has incorporated the company.
- Furthermore the Company shall comply with the obligations imposed by Law, such as holding of Annual General Meetings, Board of Directors meetings, submission of Annual Company Returns. \
We can assist you in with the aforesaid plus with the maintenance your bank accounts and other relevant services which will be either covered by one off annual administration fees which shall depend on a number of requested services or charged at hourly rate agreed between us.
Accounting and auditing fees vary and they depend on:
- a) The number of transactions the company executes each year.
- b) The total sum of the company’s transaction and the tax planning of the company.
A Cyprus company needs to register with the Inland Revenue Office and get a tax number. Thereinafter, it has to file audited accounts every year and pay tax.
Some companies are also registered with the VAT Department and get a VAT number. In such case they have to file a VAT return every three months.
We cooperate with reputable Accountants/Auditors firms closely to ensure prompt and accurate filing of the company’s accounts and you can expect a really competitive rates.
Annual tax on all companies in Cyprus, which amounts to 350 Euros shall be payable. Additionally the annual filing of forms might cost you approximately 100 – 500 EUR depending on your needs and any changes you wish to make to the company’s formation.
If you want for example to open one more bank account, or need the power of attorney then it involves additional fees.
Corporate Tax Rate
Trading profits of a Cyprus tax resident are taxed at the rate of 12.5%.
All expenses that are wholly and exclusively for the purpose of trade are tax allowable when determining the taxable profit of the Company.
Contact us and receive more details as for the Cyprus tax perspective of Businesses, operating through Cyprus.
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