Company-Related

A private limited company registered in Cyprus is prohibited by its articles from inviting the public to subscribe for any shares or debentures of the company.

There are 3 formal procedures for companies in financial difficulties and these are as follows:

• A reorganization plan of the company and/or a settlement between the company and its creditors may be effected following the approval of the court;

Audited Financial Statements and Management Accounts/Reports are both important tools for a business but each one serves a different purpose.

New Announcement from the Registrar of Companies in Cyprus

The Registrar of Companies announced on 16.8.2016 that as per Law N.89(I) of 2015 which amends the Companies Law Cap.113...

Companies registered in Cyprus that do not proceed with the payment of the annual levy of €350 on time will be liable to penalties.

A branch or a representative office of an overseas company may be registered in Cyprus if within one (1) month of the establishment of the place of business, it registers itself as an overseas company with the Registrar of Companies in Cyprus. 

According to section 391 of the Companies Law (Cap. 113), irrespective of any other provisions of any other law, all Cyprus registered companies are obliged to pay an annual levy of €350,00.  

The changes effected in December 2015 with regards to record keeping obligations for companies and limited partnerships aim to ensure that the BVI remains compliant with OECD requirements. 

A company is a legal person separate from its members and therefore the identity and motives of those who form and control the company are not relevant.

Securities nowdays are often required by the creditors for various transactions. One form of a security is a pledge over shares in a company, which by its nature is a possessory security interest and thus involves the delivery of possession, actual or constructive.

The new taxation status on Company is residence-based. A company is only ‘resident in the Republic’ if its business in centrally managed and controlled in Cyprus.

Managing a Cyprus company has many statutory and other reporting obligations.

Shares may be allotted following the formalities set out in the articles of association.  In general, shares may be allotted by a company for cash or non-cash consideration or a combination of both at par fully paid or partly paid or at par plus premium.

Shares of private limited companies are a personal property and may be transferred in the manner laid down in the company’s articles of association.

The major differences between a public and a private company are as follows:

A Company Limited by Guarantee is ‘a company having the liability of its members limited by the memorandum to such amount as the members agree may respectively thereby undertake to contribute to the assets of the company in the event of it being wound up.'

Insolvency procedures are governed by the Cypriot Companies Law Act, Cap 113. Section 203 of the Law provides two methods of liquidation, namely:

Cyprus Companies Law provides that every private company must have at least one director and every public company must have at least two directors (s.170).

The Companies Law has been recently amended by Law 90(Ι)/2013 published in the Official Gazette on 26 July 2013. The amendment effected is the following:

In Cyprus, there are two main methods of dissolving a company voluntarily.  The easiest and cheapest method is the strike off method under Section 327 of the Companies Law Cap.113. 

Any mark that is capable by itself of distinguishing the goods of one undertaking from those of other undertakings.

After the amendment in the legislation, dormant companies, which were exempted from the payment of the annual levy of Euro 350 for 2012 in accordance with the previous legislation, have to proceed with the payment of 2012 fee, prior to the end of March 2013.

A company may have classes of shares, for example, where different shares have different rights i.e. to vote or to receive dividends in return for their capital contributions. Shareholders receive their share of the profits by way of payment of dividend.

Under Section 347 of the Companies Law (Cap 113), companies incorporated outside the jurisdiction of the Republic of Cyprus may register a branch in Cyprus. 

The procedure of re-domiciliation of a foreign company to Cyprus is straight-forward. 

Directors have powers to take majority business decisions on behalf of the companies. Consequently, various duties are imposed on them, to ensure that the companies’ interests are protected.

The relief regime from import and excise duties for goods imported for use by offshore companies or their expatriate personnel has been terminated since 31 December 2003. 

Cyprus offers important possibilities for international tax planning. One such possibility which has proved to be very beneficial for international businesses is the use of a Cyprus Holding Company.

Multilysis Services Ltd through its associate Law firm, N. PIRILIDES & ASSOCIATES LLC provides a complete range of consulting/advisory services for the establishment, licensing and operation of Investment Firms in Cyprus. 

The Department of Merchant Shipping of Cyprus in collaboration with other relevant authorities of Cyprus has prepared a Bill which has been approved by the Council of Ministers of Cyprus, on the 20th of April 2012.

Multilysis Services Limited, through its associate law firm, namely Messrs N. Pirilides & Associates LLC, deals with the registration of International Collective Investment Schemes.