All companies in Cyprus
Entrepreneurs are free to choose the legal form of their company in Cyprus. If you chose this jurisdiction, we bring to your attention an overview of the most common forms of commercial enterprises on the island. After getting acquainted with the features of each of them, you will be able to assess how they meet your requirements and organize your business in the best possible way.
In accordance with the provisions of local law, there are two categories of companies that can be established in Cyprus:
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Company limited by shares
the liability of its members depends on the par value of their shares.
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Company Limited by Guarantee
the liability of its members is determined by the amount of their contribution. This company does not have an authorized capital, therefore, funds are not transferred to the current account. The liability of the participants is limited to the amount established in the statutory documents. This amount will be a guarantee that the participants must contribute in the event of the termination of the company's activities. As a rule, this legal form is used for charitable and non-profit organizations. In addition, a Cypriot company can be private or public.
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Private company
may not issue invitations to the public to subscribe for its shares or debentures. The name must contain the ending “limited”, “ltd” or “Ltd”.
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Public company
may offer its shares or debentures to the general public. The name must contain one of the following endings: “Public Company Limited”, “Public Company Ltd”, “Public Co. Ltd”, “Plc”, “Public Limited” or “Public Ltd”.
Companies in Cyprus
Public Company Limited by Shares
Private Company Limited by Shares
Exempt Private Company
Societas Europaea
Public Company Limited by Shares
Private joint-stock company analogue.
Registration procedurePrivate Company Limited by Shares
Private joint-stock company analogue.
Registration procedureExempt Private Company
It is essentially a private company limited by shares that is exempt from filing financial statements with the Registrar of Companies and is not restricted from making loans to its directors.
In practice, companies in this form are rarely established, since the tax service still recommends that enterprises submit audited financial statements. In addition, there are a number of restrictions for such a company, for example:
- No corporation other than another exempt company may own its shares or debentures.
- The number of debt holders must not exceed 50.
- The founder cannot be a director of the company.
Societas Europaea (European company)
The name must contain the ending “SE” This legal form applies to companies that operate or intend to operate in several member states of the European Union.
Partnerships
The essence of a partnership is a relationship between two or more persons with the common goal of making a profit. There are two types of partnerships: general and limited.
General Partnership (General partnership)
Limited Partnership (Limited partnership)
General Partnership (General partnership)
The main feature of a general partnership is that all partners are jointly and severally liable with other partners for the debts and obligations of the partnership without any restrictions. This liability exists only for the time that the partner is a partner in the partnership.
Limited Partnership (Limited partnership)
A limited partnership must consist of one or more persons called general partners and one or more persons called limited partners. General partners have unlimited personal liability, while limited partners are only liable according to their contribution to the partnership.
Branches
There are two types of branches in Cyprus:
Branch of a local company
Branch of a foreign company
A foreign company may establish a branch subject to the provision of satisfactory bank references and the submission to the Registrar of Companies of the following documents (translated into Greek):
- certified copies of the Memorandum and Articles of Association of the company, as well as any other documents confirming the incorporation of the company;
- details of directors and secretary of the company;
- personal data of at least one natural person who is a resident of the Republic of Cyprus. This person will be authorized to receive official communications regarding the affiliate.
Foundations and trusts in Cyprus
Cypriot Alternative Investment Funds (AIFs) and Undertakings for Collective Investments in Transferable Securities (UCITs). The sole purpose of AIF and UCITs is to jointly invest the funds of their investors / shareholders in the interests of these investors. It is possible to register two types of AIF in Cyprus:
- alternative investment funds with a limited number of persons (75) (AIFLNP);
- alternative investment funds with an unlimited number of persons (AIF).
Cyprus Alternative Investment Funds may be of limited or unlimited duration and take various legal forms depending on structural orientations and tax considerations. Below are the various legal forms in which an AIF can be created.
- AIF with a limited number of investors:
- variable capital investment company (VCIC);
- fixed capital investment company (FCIC);
- limited partnership (LP).
- AIF with an unlimited number of investors:
- variable capital investment company (VCIC);
- fixed capital investment company (FCIC);
- limited partnership (LP);
- common fund (CF).
UCITs can take the following legal forms:
- general fund;
- company with variable capital.
AIF and UCIT are taxable or non-taxable depending on their legal status. Under certain conditions, the management and administration fees charged for AIFs and UCITs may be exempt from VAT.
Trusts in Cyprus
A trust can be defined as an obligation of a person (i.e. trustee) to whom property is transferred by the owner of this property and the creator of the trust (i.e. settlor) to hold and manage such property for a certain period of time according to the oral or written wishes of the settlor, expressed in a Trust Deed or Will, in favor of a specified person or persons, or class of persons (i.e. beneficiaries). The trust is not a separate legal entity.
International trusts
- The law defines an international trust as a trust in respect of which:
- the settlor is not tax resident in Cyprus during the calendar year preceding the year in which the trust was created;
- at least one of the trustees is tax resident in Cyprus during the period of the trust;
- none of the beneficiaries is tax resident in Cyprus during the calendar year preceding the year in which the trust was created.
- In accordance with Cypriot law:
- If the beneficiary is a resident of Cyprus, Cyprus will levy every form of taxation on the income and profits of a Cyprus International Trust that are earned or deemed to be earned from both sources in Cyprus and outside of it.
- If the beneficiary is not a resident of Cyprus, Cyprus will levy each form of taxation only on income and profits of a Cyprus International Trust that are earned or deemed to be earned from sources in Cyprus.
