Wednesday 13 December 2017
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Cyprus Company Registration By: Andreas Danos Law Firm

"In the increasingly competitive modern business market, companies must do everything they can to maximise their chances of success. Financial considerations in particular are more pertinent today than ever before, and with this in mind, many companies are turning to new ways of conducting business in order to give themselves a competitive advantage.

Thanks to its beneficial tax system, Cyprus is proving itself to be of the most popular jurisdictions for holding, trading and intermediary companies to conduct international business.

We’re here to help by enabling companies in numerous sectors enjoy the many benefits of establishing a business presence in the popular European country of Cyprus. Below, you’ll find lots of useful information on the advantages of registering a company in Cyprus, including who can benefit and how to do it.

 

Advantages of Cyprus Company Formation:

 

-European jurisdiction;

-Advantageous vehicle for International Tax Planning and use; -0% tax on Dividends received (Dividends received by a Cyprus Company, on certain conditions, are free of tax making Cyprus the most competitive jurisdiction for holding companies); -0% withholding tax on Dividend payments (Dividends payable by a Cyprus resident company to its foreign shareholders (whether a company or

individual) are not subject to any withholding tax in Cyprus); -Full tax exception on the payment of dividends to its non-resident shareholders and has a real advantage over the other traditional holding jurisdictions; -No capital gains tax is paid on the transfer of immovable property owned by a Cyprus Company abroad (outside Cyprus); -12, 5% Taxation for tax resident companies. (Starting from accounting period of 2014); -0% Taxation for NON tax resident companies; -Double Tax Treaties (Cyprus has signed a considerable number of Double Taxation Treaties with various countries, to avoid the double taxation of income earned in any of the two contracting states); -A minimum of one director is required for a Cyprus company formation.

Director can be of any nationality and need not be resident, but Cypriot advisable for purposes of tax residency corporate directors are permitted; -A minimum of one shareholder is required for a Cyprus company formation; -Nominee Shareholders and Nominee Directors Allowed.

 

The law in Cyprus emerges out of a unique legal system, based on the Anglo-Saxon system, namely common law and equity, in a combination with the Continental system. Accordingly, various European law directives, regulations and international treaties, the constitution of the Republic of Cyprus (the supreme law of Cyprus), the legislation (statutory law) and the judicial precedent (case law), constitute the main sources of law in Cyprus.

 

In view of the above, a company is governed by the Companies’ Law Cap.

113. The Companies’ Law, being the core statutory law for corporate law in Cyprus, is comprised of several, detailed sections governing a Private Company from its incorporation until its dissolution. The law is mandatory and controls the contents of the Memorandum and Articles of Association.

A company is also governed by its own Memorandum and Articles of Association, provided that these have been set in accordance to the various provisions, rights or restrictions, mentioned in Cap. 113.

The main difference between the two is in the following:

The Memorandum of Association, declares the purposes for which a company has been incorporated, for example trading and / or holding assets, while the authorised share capital, the issued share capital and the name of the company, followed by the word “Ltd” or “Limited”, must also be clearly mentioned in the Memorandum.

The form of a Memorandum of Association of a Company Limited by Shares can found in Table B of the Companies’ Law Cap. 113. The Memorandum of Association can be amended, while the procedures followed for this alteration vary according to the nature of the amendment. For example, the name of a company can be amended through a special resolution signed by the shareholders of the company and upon the relevant approval by the Cyprus Registrar of Companies. The Memorandum may also be amended as to the purposes of a company, or for any changes to the company’s authorised capital.

On the other hand, the role of the Articles of Association is to specify various internal regulations controlling the day-to-day procedures of a company, e.g. the quorum needed for the shareholders’ meeting or the board of director’s meetings.

The Articles of Association of a company may adopt all or any of the regulations contained in Table A of the First Schedule of the Companies Law Cap. 113. The Articles of Association may be amended through a special resolution signed by the shareholders of the company as long as such an amendment is not in contradiction to the company law provisions; by restricting, for example, the interests of the minority of shareholders unless this would be analogous to the benefit of the Company."

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