A complete guide to the Cyprus Annual Company Return (HE32) and Financial Statements filing requirements

Every Cyprus incorporated Company to be considered in Good Standing, needs to submit its Annual Company Return (HE32) accompanied by Audited Financial Statements.

In this article we explain in detail what is the annual return and what it includes. We will also touch upon the financial statements that need to be submitted with the HE32, however, for more information on audit requirements please read our blog article here.

What does an annual return include

Every company draws up an annual return once every calendar year which includes, essential information about the company as at the date of its drafting, in relation to:

  • the company’s registered office address;
  • the address of the place where the company’s registers are kept;
  • the directors and secretary the share capital (in case of a company with share capital);
  • the register of members.

The annual return is accompanied by the financial statements relating to the previous financial year (i.e. an annual return with return date within 2017 must be accompanied with the financial statements of 2016), duly certified by a director and the company’s secretary, together with payment of the appropriate fee. More information on the financial statements and relevant fees can be found below.

Exemption from submission of annual return

It is noted that a company that was registered prior to 14th August 1974, and had its registered office or place of business or all of their assets in an occupied or inaccessible area and that are no longer active and/or do not possess any other asset other than the assets located in areas which are not under the control of the Republic, is not obliged to submit an annual return. Towards this end, form HE67 must be submitted by hand/post.

Financial Statements and other accompanying documents

The directors of the company are responsible for ensuring that a complete set of financial statements for the company is prepared in accordance with the International Financial Reporting Standards (IFRS) and the provisions of the Companies Law.

The financial statements must include:

  • Profit and loss account;
  • Balance Sheet signed by at least two (2) directors;
  • Notes;
  • and must be accompanied, depending on the circumstances, by:
  • the company’s management report and depending on the circumstances a consolidated management report;
  • the company’s auditors report;
  • a non-financial report and depending on the circumstances a consolidated non-financial report;
  • a report, and depending on the circumstances, a consolidated report for the payments towards governments.
  • The financial statements of the company are firstly approved by the board of directors and presented in the annual general meeting of the company for approval by the shareholders.
These FS will need to be audited, therefore the auditor shall ensure that it complies with Registrars requirements.

Maintaining accounting books

The directors of the company are responsible for keeping proper books of account and records on the basis of which the company’s financial statements are prepared.

These books of account and records must give a true and fair view of the company’s financial affairs and allow the determination of the financial position of the company, with reasonable accuracy, at any specific point in time. They must also include supporting documents (including contracts and invoices), which should reflect:

  • all the amounts of money which are collected and spent by the company, as well as issues for which a relevant collection and expenditure is made;
  • all the sales, purchases and transactions of the company; and
  • all the assets and liabilities of the company.

Annual Return Filing Fee

The fee for the filing of the annual return amounts to:

  • twenty euros (€20);
  • additional fee of twenty euros (€20) must be paid if the accelerated procedure is required;
  • in the event of an overdue filing, an additional fee of twenty euros (€20) as well as the late filing fee is imposed.

As at 1/06/2021, the overdue filing of the annual return is subject to a late filing fee not exceeding the amount of fifty euros (€50) upon the first day of non-compliance and a further charge of one euro (€1) for every day the failure to comply continues for the first 6 months, raising up to two euros (€2) for every day thereon the failure to comply continues, up to the maximum amount of five hundred euros (€500).

The registrar has a very good late filing penalty calculator on their website which can assist you in calculating the late filing penalty of your annual return filing. You can find the calculator here.

Depending on how you submit the annual return the fees can be paid:

  • by credit card (for e-filing submission); or
  • in case of submission by hand/ post:
  • in cash;
  • by cheque;
  • via an account maintained with the Department of the Registrar of Companies; or
  • via bank transfer.

How do I file an Annual Return

For Companies we at Asterisk Corporate Services administer we perform the Annual Return filing ourselves on behalf of our client entities. Below however, you can find information on the filing process.

The information included in the annual return must be in accordance with the companies’ register of the Registrar of Companies. Otherwise, any changes in the company’s particulars must be notified to the Registrar, by filling the relevant form, prior to the filing of the annual return.

Annual return of a private company

From 2014 onwards, you can submit an annual return (form HE32I) for a private company with share capital, only through the e-filing system of the Registrar of Companies.

The annual return must be accompanied by the financial statements relating to the previous financial year and, must be certified by a director and the company’s secretary, together with payment of the appropriate fee. It is noted that, the first financial statements of the company must be presented eighteen (18) months following the incorporation of the company at the latest, and thereafter, at least once (1) every calendar year, accompanied by the annual return.

You are advised to refer to the main criteria of review and most common reasons for rejection, so as to acquire a better understanding of what is required and to facilitate the process further. More information can be found on the Registrar website here.

The link for the e-filing of annual return can be found here but please note certain registrations will need to take place.

Annual return of a public company and company without share capital

The annual return for a public company (form HE32Δ)) and a company without share capital (form HE32XK) can only be submitted by hand/post.

The annual return must be accompanied by financial statements relating to the previous financial year and, must be certified by a director and the secretary, together with payment of the relevant fee. It is noted that, the first financial statements of the company must be presented eighteen (18) months following the incorporation of the company at the latest, and thereafter, at least once (1) every calendar year, accompanied by the annual return.

When do I need to file an Annual Return

As from 19/6/2015, the annual return must be made up to a date until the company’s annual return date and, must be filed at the Department of the Registrar of Companies within twenty-eight (28) days from its drafting date. The company’s annual return date is defined on the basis of the below:

  • In the case of a new company, the drafting date of the annual return is the day following the expiry of the period of eighteen (18) months from the date of the incorporation of the company.
    • For example, if your company was incorporated on 6th January 2017, the annual return must be drafted up until 7th July 2018.
  • In the case of an existing company, the drafting date of the annual return is the date on which one (1) year lapses from the drafting date of the last filed annual return.
    • For example, if the drafting date of your last filed annual return was 5th December 2017, the next annual return must be drafted until the 5th December 2018.

It is noted that it is not possible to file an annual return which has a drafting date of the same calendar year as the last filed annual return.

Search for your Annual Return Filing Due Date

You are advised to refer to the Annual Return Date Calculator of the Registrar of Companies, for the annual return date and the filing due date of your next annual return. You can use this very useful calculator here.

Extending the Annual Return Date to a later date

The annual return date of the company may be extended, by notifying the Registrar of Companies of the new annual return date of the company before the expiry of the annual return date for that specific year. The new annual return date may not exceed 3 months from the annual return date of the company nor can it extend beyond the last day of the calendar year.

For example, if the return date for your company is 30/10/2018, the notification to extend the return date must be submitted to the Registrar of Companies until 29/10/2018 and the new date must not exceed 31/12/2018.

Late filing fee for overdue filing of annual return

As at 1/6/2021, the overdue filing of annual return is subject to a late filing fee not exceeding the amount of fifty euros (€50) upon the first day of non-compliance and a further charge of one euro (€1) for every day the failure to comply continues for the first 6 months, raising up to two euros (€2) for every day thereon the failure to comply continues, up to the maximum amount of five hundred euros (€500).

You are advised to refer to the Late filing penalty calculator of the Registrar of Companies here in order to calculate the late filing penalty of your annual return filing.

Late Filing

Failure to comply with the statutory obligation to submit annual returns to the Registrar of Companies, can have several consequences as follows:

Late filing fee for overdue filing of annual return

As at 1/06/2021, the overdue filing of the annual return is subject to a late filing fee not exceeding the amount of fifty euros (€50) upon the first day of non-compliance and a further charge of one euro (€1) for every day the failure to comply continues for the first 6 months, raising up to two euros (€2) for every day thereon the failure to comply continues, up to the maximum amount of five hundred euros (€500).

For example, if the drafting date of the annual return is 2/3/2022 then it must be submitted to the registrar of companies within twenty-eight (28) days, namely by 30/03/2022 at the latest. In the event that the annual return is submitted, for example, on 31/12/2022, then the company is subject to a late filing fee of four hundred seventeen euro (€417), calculated as follows:

  • €50 imposed on 31/3/2022;
  • €1 Χ 30 (days) = €30 for April;
  • €1 Χ 31 (days) = €31 for May;
  • €1 Χ 30 (days) = €30 for June;
  • €1 Χ 31 (days) = €31 for July;
  • €1 Χ 31 (days) = €31 for August;
  • €1 Χ 30 (days) = €30 for September;
  • €2 Χ 31 (days) = €62 for October;
  • €2 Χ 30 (days) = €60 for November;
  • €2 Χ 31 (days) = €62 for December.

You are advised to refer to the Annual Return Date Calculator, for the annual return date and the filing due date of your next annual return as well as to the Late filing penalty calculator in order to calculate the late filing penalty of your annual return filing. 

Prosecuting the Company and its Officers

Failure to file an annual return is also considered to be a criminal offence and in the event of conviction the company and every one of its officers, responsible for the omission, is liable to a fine not exceeding the maximum amount of forty two euros (€42).

Strike-off

Failure to file the annual returns and financial statements of a company may result to the involuntary strike off from the Register and subsequent dissolution of the company, by the Registrar of companies.

Conclusion

Annual Company Return (HE32) filing accompanied by the audited Financial Statements of a Cyprus Company is one of the main statutory requirements of a Cyprus Company. It is of imperative importance to be up to date with this requirement as it may result in a strike-off of your Cyprus Company as you can see from above.

Do not hesitate to contact us for more information and any assistance you may need.

The above is just for reference purposes and does constitute any form or advise nor is considered an exhaustive article on the topic.

Source: Registrar of Companies website

Every Cyprus incorporated Company to be considered in Good Standing, needs to submit its Annual Company Return (HE32) accompanied by Audited Financial Statements.

In this article we explain in detail what is the annual return and what it includes. We will also touch upon the financial statements that need to be submitted with the HE32, however, for more information on audit requirements please read our blog article here.

What does an annual return include

Every company draws up an annual return once every calendar year which includes, essential information about the company as at the date of its drafting, in relation to:

  • the company’s registered office address;
  • the address of the place where the company’s registers are kept;
  • the directors and secretary the share capital (in case of a company with share capital);
  • the register of members.

The annual return is accompanied by the financial statements relating to the previous financial year (i.e. an annual return with return date within 2017 must be accompanied with the financial statements of 2016), duly certified by a director and the company’s secretary, together with payment of the appropriate fee. More information on the financial statements and relevant fees can be found below.

Exemption from submission of annual return

It is noted that a company that was registered prior to 14th August 1974, and had its registered office or place of business or all of their assets in an occupied or inaccessible area and that are no longer active and/or do not possess any other asset other than the assets located in areas which are not under the control of the Republic, is not obliged to submit an annual return. Towards this end, form HE67 must be submitted by hand/post.

Financial Statements and other accompanying documents

The directors of the company are responsible for ensuring that a complete set of financial statements for the company is prepared in accordance with the International Financial Reporting Standards (IFRS) and the provisions of the Companies Law.

The financial statements must include:

  • Profit and loss account;
  • Balance Sheet signed by at least two (2) directors;
  • Notes;
  • and must be accompanied, depending on the circumstances, by:
  • the company’s management report and depending on the circumstances a consolidated management report;
  • the company’s auditors report;
  • a non-financial report and depending on the circumstances a consolidated non-financial report;
  • a report, and depending on the circumstances, a consolidated report for the payments towards governments.
  • The financial statements of the company are firstly approved by the board of directors and presented in the annual general meeting of the company for approval by the shareholders.
These FS will need to be audited, therefore the auditor shall ensure that it complies with Registrars requirements.

Maintaining accounting books

The directors of the company are responsible for keeping proper books of account and records on the basis of which the company’s financial statements are prepared.

These books of account and records must give a true and fair view of the company’s financial affairs and allow the determination of the financial position of the company, with reasonable accuracy, at any specific point in time. They must also include supporting documents (including contracts and invoices), which should reflect:

  • all the amounts of money which are collected and spent by the company, as well as issues for which a relevant collection and expenditure is made;
  • all the sales, purchases and transactions of the company; and
  • all the assets and liabilities of the company.

Annual Return Filing Fee

The fee for the filing of the annual return amounts to:

  • twenty euros (€20);
  • additional fee of twenty euros (€20) must be paid if the accelerated procedure is required;
  • in the event of an overdue filing, an additional fee of twenty euros (€20) as well as the late filing fee is imposed.

As at 1/06/2021, the overdue filing of the annual return is subject to a late filing fee not exceeding the amount of fifty euros (€50) upon the first day of non-compliance and a further charge of one euro (€1) for every day the failure to comply continues for the first 6 months, raising up to two euros (€2) for every day thereon the failure to comply continues, up to the maximum amount of five hundred euros (€500).

The registrar has a very good late filing penalty calculator on their website which can assist you in calculating the late filing penalty of your annual return filing. You can find the calculator here.

Depending on how you submit the annual return the fees can be paid:

  • by credit card (for e-filing submission); or
  • in case of submission by hand/ post:
  • in cash;
  • by cheque;
  • via an account maintained with the Department of the Registrar of Companies; or
  • via bank transfer.

How do I file an Annual Return

For Companies we at Asterisk Corporate Services administer we perform the Annual Return filing ourselves on behalf of our client entities. Below however, you can find information on the filing process.

The information included in the annual return must be in accordance with the companies’ register of the Registrar of Companies. Otherwise, any changes in the company’s particulars must be notified to the Registrar, by filling the relevant form, prior to the filing of the annual return.

Annual return of a private company

From 2014 onwards, you can submit an annual return (form HE32I) for a private company with share capital, only through the e-filing system of the Registrar of Companies.

The annual return must be accompanied by the financial statements relating to the previous financial year and, must be certified by a director and the company’s secretary, together with payment of the appropriate fee. It is noted that, the first financial statements of the company must be presented eighteen (18) months following the incorporation of the company at the latest, and thereafter, at least once (1) every calendar year, accompanied by the annual return.

You are advised to refer to the main criteria of review and most common reasons for rejection, so as to acquire a better understanding of what is required and to facilitate the process further. More information can be found on the Registrar website here.

The link for the e-filing of annual return can be found here but please note certain registrations will need to take place.

Annual return of a public company and company without share capital

The annual return for a public company (form HE32Δ)) and a company without share capital (form HE32XK) can only be submitted by hand/post.

The annual return must be accompanied by financial statements relating to the previous financial year and, must be certified by a director and the secretary, together with payment of the relevant fee. It is noted that, the first financial statements of the company must be presented eighteen (18) months following the incorporation of the company at the latest, and thereafter, at least once (1) every calendar year, accompanied by the annual return.

When do I need to file an Annual Return

As from 19/6/2015, the annual return must be made up to a date until the company’s annual return date and, must be filed at the Department of the Registrar of Companies within twenty-eight (28) days from its drafting date. The company’s annual return date is defined on the basis of the below:

  • In the case of a new company, the drafting date of the annual return is the day following the expiry of the period of eighteen (18) months from the date of the incorporation of the company.
    • For example, if your company was incorporated on 6th January 2017, the annual return must be drafted up until 7th July 2018.
  • In the case of an existing company, the drafting date of the annual return is the date on which one (1) year lapses from the drafting date of the last filed annual return.
    • For example, if the drafting date of your last filed annual return was 5th December 2017, the next annual return must be drafted until the 5th December 2018.

It is noted that it is not possible to file an annual return which has a drafting date of the same calendar year as the last filed annual return.

Search for your Annual Return Filing Due Date

You are advised to refer to the Annual Return Date Calculator of the Registrar of Companies, for the annual return date and the filing due date of your next annual return. You can use this very useful calculator here.

Extending the Annual Return Date to a later date

The annual return date of the company may be extended, by notifying the Registrar of Companies of the new annual return date of the company before the expiry of the annual return date for that specific year. The new annual return date may not exceed 3 months from the annual return date of the company nor can it extend beyond the last day of the calendar year.

For example, if the return date for your company is 30/10/2018, the notification to extend the return date must be submitted to the Registrar of Companies until 29/10/2018 and the new date must not exceed 31/12/2018.

Late filing fee for overdue filing of annual return

As at 1/6/2021, the overdue filing of annual return is subject to a late filing fee not exceeding the amount of fifty euros (€50) upon the first day of non-compliance and a further charge of one euro (€1) for every day the failure to comply continues for the first 6 months, raising up to two euros (€2) for every day thereon the failure to comply continues, up to the maximum amount of five hundred euros (€500).

You are advised to refer to the Late filing penalty calculator of the Registrar of Companies here in order to calculate the late filing penalty of your annual return filing.

Late Filing

Failure to comply with the statutory obligation to submit annual returns to the Registrar of Companies, can have several consequences as follows:

Late filing fee for overdue filing of annual return

As at 1/06/2021, the overdue filing of the annual return is subject to a late filing fee not exceeding the amount of fifty euros (€50) upon the first day of non-compliance and a further charge of one euro (€1) for every day the failure to comply continues for the first 6 months, raising up to two euros (€2) for every day thereon the failure to comply continues, up to the maximum amount of five hundred euros (€500).

For example, if the drafting date of the annual return is 2/3/2022 then it must be submitted to the registrar of companies within twenty-eight (28) days, namely by 30/03/2022 at the latest. In the event that the annual return is submitted, for example, on 31/12/2022, then the company is subject to a late filing fee of four hundred seventeen euro (€417), calculated as follows:

  • €50 imposed on 31/3/2022;
  • €1 Χ 30 (days) = €30 for April;
  • €1 Χ 31 (days) = €31 for May;
  • €1 Χ 30 (days) = €30 for June;
  • €1 Χ 31 (days) = €31 for July;
  • €1 Χ 31 (days) = €31 for August;
  • €1 Χ 30 (days) = €30 for September;
  • €2 Χ 31 (days) = €62 for October;
  • €2 Χ 30 (days) = €60 for November;
  • €2 Χ 31 (days) = €62 for December.

You are advised to refer to the Annual Return Date Calculator, for the annual return date and the filing due date of your next annual return as well as to the Late filing penalty calculator in order to calculate the late filing penalty of your annual return filing. 

Prosecuting the Company and its Officers

Failure to file an annual return is also considered to be a criminal offence and in the event of conviction the company and every one of its officers, responsible for the omission, is liable to a fine not exceeding the maximum amount of forty two euros (€42).

Strike-off

Failure to file the annual returns and financial statements of a company may result to the involuntary strike off from the Register and subsequent dissolution of the company, by the Registrar of companies.

Conclusion

Annual Company Return (HE32) filing accompanied by the audited Financial Statements of a Cyprus Company is one of the main statutory requirements of a Cyprus Company. It is of imperative importance to be up to date with this requirement as it may result in a strike-off of your Cyprus Company as you can see from above.

Do not hesitate to contact us for more information and any assistance you may need.

The above is just for reference purposes and does constitute any form or advise nor is considered an exhaustive article on the topic.

Source: Registrar of Companies website