Incorporating a Company in a foreign jurisdiction can be a daunting task. A lot of steps, logistics, intermediaries, documents as well as liaising with the authorities of a foreign jurisdiction can be tricky, making the process challenging and time/resources consuming.
Below we analyze the steps required pre and after incorporation to ensure that you have a timely and nerves-free formation of your Cyprus Company:
Pre-Incorporation Steps:
Step 1 – Choose the name, shareholders and officers of the company
Choose the important details to incorporate your entity:
- Company Name: First, we will need to apply for your desired name with the Registrar of Companies in Cyprus and this usually takes 2-5 business days to be approved. The name should not be generic or already been registered with the Registrar of Companies. In addition, if your desired name represents an international brand, an authorization may need to be obtained. You can contact us for a free name consultation any time.
- Share Capital / Memorandum: Our experts will then discuss with you the share capital and shareholding of the Company to be included in the Memorandum and Articles of Association. For most of our clients we set the authorized share capital at EUR€5,000 and the issued at EUR€1,000, so if you require to issue more shares at a later stage to be able to do that without having to increase the authorized share capital. Please note that the share capital can be denominated in any currency.
After the above are decided we will then proceed with drafting the Memorandum & Articles of Association of the Company. By default we use our standard template, but we can process any changes you may need, i.e. for classes of shares, quorum of Directors etc.
- Directors, Corporate Secretary, Registered Office: Every Cyprus Company will need to have appointed a Director, Corporate Secretary and a Registered Office Address. Here at Asterisk we provide Executive Level Directors who have limited appointments. We can also provide Corporate Secretary & Registered Office address services to complete this step.
Incorporation Steps
Step 2 – Application forms completion and submission
Memorandum & Forms to be submitted to the Registrar of Companies:
- After step 1 is completed we then send to you the Memorandum & Articles of Association as well as any other forms you may need to sign (in case you would like someone from your side to be appointed as Director). Please note that you do not need to come to Cyprus for the incorporation, nor you need to send originals, scanned copy signatures would suffice. We will arrange for everything.
- After all documentation is in place we proceed with submission to the Registrar of Companies and we usually have a fully incorporated entity within 4-5 business days from the moment of submission.
Post Incorporation
Step 3 – First board meeting & registrations
Relevant registrations and the first meeting of the Board of Directors take place:
- Corporate Certificates: After the Company is incorporated we will send to you all Corporate Certificates in scanned copy and original format if required. Otherwise such are kept at the registered office of the Company. We will also provide you with the share certificates of the entity proving your shareholding and we will also order the Company’s stamps.
- Tax Registrations: The newly incorporated Cyprus Company will need to also register with the Cyprus Tax Authorities and obtain a Tax Identification Code, 60 days after incorporation, otherwise penalties apply. We can assist with this process which also includes registration with Taxisnet for the online submission of Tax Forms.
- Bank Account: Under Cyprus Law the Company does not need to have a bank account to be able to be incorporated/operate. However, if you wish to open a bank account for your newly Cyprus Incorporated Company we can then assist with the bank account opening process by completing forms based on your instructions and liaising with any bank in Cyprus or abroad.
- First Board Meeting: After the Cyprus Company is incorporated the first meeting of the Board of Directors is convened. Amongst others the following preliminary matters are discussed/approved:
· Where the registered office of the Company is situated;
· Appointment of the secretary of the Company;
· Instruct the secretary to complete and file all the necessary notifications and returns with the Registrar within the time prescribed by law and to obtain/draft all the necessary statutory books and registers.
· Issue and allot the number of shares to be held by the subscribers.
Synopsis:
Overall formation of a Cyprus Company can look like a taunting task at the beginning, however, with the help of our professionals we can complete the process for you in no-time, with minimal involvement/worry from your site, as well as ensure that everything is in place for you to commence your business.
Feel free to contact our team to secure detailed information on incorporating your business entities in Cyprus.
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
