Cyprus Companies – An IntroductionMember, 43 + Tax Treaties

Overview…

Cyprus Companies:  A Basic Introduction to Cyprus Companies

What is a company?

  • A company is a legal entity (body, being or ‘thing’). This means it can take legal action and sue people or other companies, or be sued, have legal action taken against it.

What types of companies are there?

  • Countries describe them differently, but in the UK and Cyprus the following are the most common types:
    • Public (Public listed company: ‘Plc’); as traded on a stock exchange
    • Private (Private limited company: ‘Limited’ or ‘Ltd’); a private business owned by the shareholders.
  • Equivalents to limited companies can be found in other countries.  Example:
    • Plc = AG (Germany); SA (France, Poland)
    • Ltd = LLC (USA); GmbH (Germany); Sp. z o.o. (Poland)

Who can own a Cyprus company?

  • Cypriots or foreigners or other companies – anybody!

What do you need to start a company?

  • A name for the company.  The name must be submitted for approval to the Registrar of Companies before proceeding.  The chosen name should;
    • Not be the same as an existing company name
    • Not contain words such as: ‘euro’; ‘international’; unless particularly relevant
    • Not be offensive
    • Not contain geographic references, unless particularly relevant
  • A description of the activity of the new company
  • Name of Ultimate Beneficial Owner/s
  • Name of the people who will be the officials; Director/s and Secretary (officers) of the company and be responsible for it and it’s conduct
  • For owners and each of the officers the following is required: Proof of identity, address and good standing

What are nominees?

  • A nominee is a proxy.  The nominee might be an individual or a company.
  • Nominees provide greater anonymity and flexibility for the beneficial owner especially if the beneficial owner resides in a high tax country.  The Beneficial owner can appoint a nominee without losing control or risk, as a nominee may not take any action including management of the company.
  • If the owner of the company lives outside Cyprus it is usual for the company to employ nominees.
  • Nominees may be appointed for the following :
  • The following documents are provided by the nominee to protect the security of the beneficial owner:
    • Trust deed
    • Undated Instruments of transfer
    • Directors’ resolution approving the transfer of shares to the actual shareholder
    • The original share certificates issued in the names of the nominal shareholders
    • Undated letters of resignation of the nominee directors
  • Cyprus nominee shareholder; Cyprus nominee director; Cyprus nominee secretary; Cyprus nominee services; provision of nominee services in corpus;

How do I form a company?

  • All you have to do is find and instruct a competent corporate services company, account or law firm

What are the company documents?

  • Articles of Association & Memorandum
    • The articles of association of a company, often simply referred to as the articles are the regulations governing the relationships between the shareholders and directors of the company, Together with the memorandum, they form the constitution of a company.
    • Articles of association typically cover the issuing of shares the different voting and dividend rights attached to different classes of share, restrictions on the transfer of shares, the rules of board meetings and shareholder meetings, and other similar issues.
  • Certificates (there are 4 certificates):
    • Certificate of incorporation (proving the company is incorporated in Cyprus on “X” date
    • Certificates of registered address (shows the official address where the “company lives’
    • Certificate of shareholders (showing the name of shareholders and amount of shares held)
    • Certificate of directors & Secretary (shows who does want)
  • Company Stamp (for stamping official company documents)

What is Power of Attorney?

  • A power of attorney (POA) is an authorisation to act on someone else’s behalf in a legal or business matter. The person authorising the other to act is the Principal (granter of the power), and the one authorised to act is the Agent (the Attorney).

What does ‘certified’ mean and why might I need it?

  • A document is certified by, someone who is appropriately qualified such as a lawyer or bank officer or a public notary to prove a document is genuine and authentic.

What does ‘apostille’ mean and why might I need it?

  • Apostille is a French word meaning certification. It is commonly used in English to refer to the legalization of a public or government document when it will be used internationally.  Under the terms of the 1961 Hague Convention countries accept the legalized documents of other countries as official and genuine.

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