Setting up a Company/Structure in any jurisdiction is a nerve racking process. It can easily turn into a nightmare if the right processes are not followed, but it can also be an efficient and smooth process if done correctly.
Article below looks at 5 key points you need to know when incorporating a Cyprus Company to ensure a seemingless incorporation.
1. You need to apply for a name first
First step in the process is to apply and have a name approved for your Cyprus Company. The name cannot be any international brand – unless you have an authorization to use – or any other name already in use by the Registrar. You can send us a message through our contact form and we can let you know preliminarily whether your desired name is available. Usually name applications take 2-3 days to be approved, but we can expedite the process where required.
2. You do not need to visit Cyprus – scanned copies should suffice
There are several forms that need to be completed and submitted to the Registrar for the Company to be incorporated. Most of the forms are taken care and completed by us – just the Memorandum and Articles of Association will need to be signed by the first subscribers of the share capital of the Company (shareholders). If an individual from the client side is also appointed as Director, then some other documents/resolutions need to be signed
In a nutshell if you are not appointed as a Director, the only document you will need to sign is the Memorandum & Articles of Association. This can be achieved through scanned copies.
3. Timelines and other general information
As a first step (as described above), the name of the Company needs to be approved by the Registrar of Companies. This usually takes 2-3 business days to be approved, therefore we always apply for the name approval until all the other documents are prepared (i.e. until we received signed Memorandum etc).
After we submit all documents and forms to the Registrar it usually takes 4-5 business days for the Company to be incorporated. Depending on urgency this may also be reduced.
In relation to the Memorandum & Articles of Association, most of the Cyprus Companies are incorporated using our standard document, however, we can assist with amending in accordance with your specific needs and requirements.
On share capital, there is no specific requirement, but we usually incorporate our entities with 5,000 shares of €1 each as authorized capital, and issue 1,000 shares of €1 each as issued share capital.
4. You need to appoint Cyprus Resident Directors as a starting point for Cyprus Tax Residency
A Cyprus Company needs to have appointed Directors, Corporate Secretary and a Registered Office in Cyprus. The minimum test for Cyprus Tax Residency is for management and control to be exercised out of the Republic. This can be achieved with Cyprus Tax Resident Directors.
Our office can assist with the provision of the above services, and we do provide, professional, highly-skilled Directors who have minimum appointments and will strengthen the case of Tax Residency for the entity, with full confidentiality and trust. Please refer here for more information on how we can help you or contact us.
5. Annual Requirements
The Cyprus Company has several requirements which may look complex at first, but with the right service provider by your side they become simple and straight forward.
The two basic filing requirements which are same to all Companies are as follows:
- Submission of the Annual Company Return (HE32) to the Registrar of Companies accompanied by the Audited IFRS Financial Statements (FS) of the entity 18 months after incorporation and once per calendar year thereafter.
The HE32 includes basic information on the entity (Directors, Shareholders, Share Capital etc). The Financial Statements need to be audited by a licensed audit firm based in Cyprus. Accounting records and Financial Statements need to be prepared in accordance with the International Financial Reporting Standards (IFRS).
- The Cyprus Co needs to submit its Annual Income Tax Return (TD4) to the Tax Office 15 months after the year end. For example for years ending 31 Dec 2021 the TD4 needs to be submitted to the Tax Office by 31 March 2023 as per current legislation. TD4 includes Income/Expenses of a Company to arrive to the Taxable Income/Loss for the year, and is based on the Audited FS of an entity. The Company needs to also submit its provisional Income Tax Return twice every year, showcasing its estimated taxable profits for the year, and paying tax on those. This requirement is not applicable to Companies who are in a Taxable Loss position.
There may also be other requirements depending on the Companies activities, but typically these are the ones for a simple holding Company.
Costs for annual maintenance of a Cyprus Company will depend on the professionals involved, but can be on the low side compared with other jurisdictions. Feel free to visit our dedicated page on Cyprus Incorporations or Contact us for more information and to obtain a tailor-made fee quote.
Written By: The Asterisk Team