Registration of Cyprus Company. Enjoy Only 12.5% Taxes.
The Name of the Cyprus Company
The first step for the registration of a Cyprus Company or IBC in Cyprus is to choose a name. That name is submitted for approval by the Registrar of Companies. It usually takes 4 or 5 working days. The name can be anything you like and you can combine words initials or numbers, provided it’s not the same or similar to a pre existing company or it is not undesirable in the sense that it must not contain obscene words or meanings or words of the names of towns or other countries so as to be misleading. The name of a company can be changed at any time by a resolution of the company and it’s approved by the Registrar of Companies. Our Law Firm has lists of approved names so that you may choose from them and save the time required for its approval, which can be about 4-5 working days. The name of a company must always end in LIMITED or LTD.
The Capital of the Cyprus Company
On the registration of a Cyprus Company the share capital can be expressed in euro and there is no minimum or maximum. For practical purposes however and so that the company can be run in a practical and easy way we recommend a share capital of one thousand euro divided into 1000 shares of one euro each. There is no minimum of capital so a one share capital worth one euro will do. The capital does not have to be paid into the bank account of the company. It is not taxable in any way, and can be increased or decreased at any time by a resolution of the company. In the case of a decrease, it has to be approved by the Court. The capital is the participation of the shareholders in the assets of the company. And their participation towards the debts of the company is restricted to their shares held by them each. After all this is the general idea of the LIMITED. The creditors can only have resort to the share participation of the shareholders to the company and not to the rest of the personal property of the shareholders.
The Directors of the Cyprus Company
At its formation a IBC in Cyprus must have Directors. They are the persons who will manage the company and run the everyday business of the company. The minimum number of Directors is one. The nationality of the Directors is immaterial. Many times, members of our company will be appointed as Nominee Directors in order to carry out board meetings and resolutions of the company in Cyprus. In this way management and control of the company is considered to be in Cyprus for tax purposes, so that you can enjoy the 10% tax benefit. Any person or legal entity such as another company can be a Director. The duties and liabilities of the Directors and their rights are provided for in the articles of association of the company, which in general terms is based on the provisions of the Company Law CAP 113. The Directors are the officers who run the company`s business and every day affairs, by selling or buying, or signing agreements and contracts on its behalf, by securing loans and running the bank accounts of the company etc. All the Directors together form the Board of Directors, which usually takes decisions for the company by a simple majority vote.
The Shareholders in a general meeting by a simple majority vote can appoint or remove any Director, with immediate effect. A Director can resign at any time by a letter in writing handed over to the Board of Directors. On the death of a Director his position becomes vacant and the Shareholders in a General Meeting appoint another Director in his place if they desire.
The Shareholders of the Cyprus Company
At its incorporation the Cyprus IBC must also have Shareholders. A Shareholder is by law the real beneficiary owner of the company and its property. It has the power to make decisions at the general meetings for appointing or dismissing the Directors. Although he is not an officer of the company he is the person who will eventually take the profits of the company. The minimum number of Shareholders can be one. A Shareholder can sell his shares at any time he likes. The profits from the sale of the shares are generally not taxable. Share Certificates are issued for the number of the shares actually issued and paid. The transfers of the shares are not free and there no share certificates the delivery of which by hand to hand transfers the ownership of the shares. One share can be owned by more than one person. The shareholders in General Meetings of the company can appoint or remove the Directors, and the Secretary, can hire person ell or other experts, and can take decisions for the company such as mergers or acquisitions. Any person can be a shareholder, or any legal entity such as another company. No one can remove a shareholder from the company unless he sells his shares. A person becomes a shareholder by buying shares of the company.
The Secretary of the Cyprus Company
Finally a company at its formation must have a Secretary. He is an officer of the company with particular duties and he is appointed by the Directors. The existence of a Secretary is required by the law. It is recommended that the Secretary of the company is a Cyprus resident because a lot of formal papers must be frequently signed by the Secretary. A Secretary can be an employee of the Company who gets a salary for his services or he can act as an officer without a salary. A Secretary`s duties are formal and his signature is not necessary on the agreements or contracts of the company for them to be valid. A Secretary can be removed by the Board of Directors and another one appointed in his place.
What is The Memorandum of the Cyprus Company?
The memorandum of the company as the word itself suggests is a MEMO of the objects of activities of the company. It is a very important document of the company because it must set out in detail all the company`s activities otherwise if the Directors enter into an agreement for the purchase of immovable property for example and that is not included in the Memorandum the purchase is Ultra Vires, i.e. beyond the power of the company and it is void! A memorandum can be altered at any time by adding or removing from it new powers.
Our Memorandum is so concise and extensive it cover all the activities required by any normal company for as long as it exists!
The Memorandum is submitted to the Registrar of Companies with the rest of the documents required and it is approved, and certified copy is handed to the company, which must adhere to its provisions as explained above.
The Articles of Association of the Cyprus Company
The Articles of Association as the words themselves suggest are the provisions which regulate the relation or association between the various officers of the company, such as the Directors the Shareholders and the Secretary. It is a very significant document of the Company and it contains provisions such as the appointment or removal of the Directors, how shares can be sold or inherited, how is the Board of Directors going to function, how to hold the General Meetings of the Company, and many other important and crucial provisions. The Articles of Association of the Company can be altered by adding or deleting some of its provisions.
The Registered Office of the Cyprus Company
The law of Cyprus requires every company to have a registered office, address. This is submitted during the incorporation of the company to the Registrar of Companies and it is registered in his archives as the place where letters, documents, notices, lawsuits, from all the Authorities and from private individuals or legal entities may be sent, delivered or legally served.
It is a very important part of the company structure. For example if a legal suit is not properly served at the registered office, then sometimes it is invalid and may be dismissed.
The Virtual Office Address
This is a completely different idea to the Registered Office Address. By virtual office we mean a place which is kept as a real office for the company. This place may be in the offices of the provider of the company, but a telephone line, fax line and email address is allocated to the company which can be used by its clients and its employees for messages and documents, so that the company gives the impression of physical presence in the jurisdiction where it is registered and carries out its activities.
Such address and the rest of the details can be used on a professional card by the businessman.
Nominee Services for a Cyprus Company
Nominees are persons usually employed by our company to act on behalf of the real Directors and Shareholders of a Cyprus IBC registered in Cyprus. These are responsible persons and in this way your secrecy and confidentiality are secure. A Nominee Shareholder will sign an undated instrument of transfer of the shares to the real beneficiary. Also a trust deed will be executed in the necessary form to secure that the Nominee Shareholder cannot sell or in any way burden or alienate the shares. The Nominee Directors are not entitled to run the company in any way, without the approval of the real beneficial owners. There can also be a Nominee Secretary, (Recommended), who will be signing a lot of formal documents for the company. This system secures for you a high level of confidentiality and security. The following documents are usually executed by the Nominees to protect the ownership and security of the beneficial owner:
- Agreement for provision of nominee services
- A trust deed guaranteeing the ownership of the shares to the Real Beneficial Owner
- Undated instruments of transfer of the shares to the benefit of the real owner
- A resolution by the Directors through which the transfer of the shares to the beneficial owner is approved.
- Original share certificates for the shares issued in the names of the Nominee Shareholders, delivered to the real owner
- An agreement between the Nominee Directors and the real beneficial owner to the effect that the Directors will do nothing on behalf of the company unless specifically instructed in writing by the beneficial owner.