Over the last years Cyprus has introduced considerably changes in its Company Law (Cap 113) and its relevant regulations rendering the island an attractive jurisdiction for many international businesses to conduct their activities via various types of Cyprus legal entities.
At present business in Cyprus may be conducted through the following legal corporate forms:
A Cyprus Company can be a:
Private Limited Company
The minimum number of members is one and the maximum is limited to fifty. And there can be no invitation to the public to subscribe for any shares or debentures.
This is the most popular type of companies in the business world and their general characteristics are the following:
Public companies need seven or more founder members, they can invite the public to subscribe for their shares or debentures and do not restrict share transfers.
The liability of each member is limited to the amount agreed on the Memorandum of Association to be contributed in the event the company goes into liquidation. In the majority of cases these companies are incorporated as non-profit making organisations under section 20 of Cap 113.
Any company incorporated outside of Cyprus may establish a legal presence in Cyprus through the legal form of a branch in Cyprus – the so-called overseas companies.
To register a branch the following documents must be filed translated into Greek:
The Cyprus Company Law changes implemented in 2003 as part of the EU accession process have also affected the rules covering branches. Every foreign corporation that maintains a branch in Cyprus must submit, for every financial year, copies of its financial statements as presented in its last AGM and published in accordance with its country of incorporation. For EU corporations though the law provides some exemptions; they are exempted from submitting separate branch financial statements if they publish their financial statements in their countries of registration and they submit them to the Registrar of Companies.
Cyprus has amended its Company Law in order the implement the provisions of the Council Regulation No. 2157/2001. The changes have been implemented by the Amendment Law No. 98(I) of 2006 and was enacted n the 7th July 2006. Thus an SE can now transfer its office from another Member State to Cyprus (and vice versa) without dissolving the company in the other Member State.
There are four possible ways for incorporating an SE:
Merger, i.e. a public limited company from two member states can form an SE by merger;
Holding, i.e. a public and private limited companies from two Member states can form a holding company;
Subsidiary; any legal entities governed by public or private law from two Member States (or an SE itself) can form a subsidiary SE;
Conversion; a public limited liability company can convert into an SE if it had a subsidiary in another Member State for two years.
Furthermore a EC can be established by an already existing European company.
As we had already informed the readers it was last year, on the 28th of July 2006, that the Cyprus Company Law, Cap 113 has been amended to introduce the concept of re-domiciliation of companies. However it is only recently and more specifically on the 6th of July 2007 that the amendment in the law can finally be implemented through the regulations that have been issued by the Council of Ministers. The regulations lay down the procedure to be followed, the forms to be filed and the fees payable for proceeding with the re-domiciliation.
Thus it is only now that it has become possible for foreign companies to be re-domiciled in Cyprus and proceed with the relevant applications.
In order to proceed with an application for re-domiciliation the foreign company must be registered in a country which allows re-domiciliation and its Memorandum and Articles of Association permit it to do so.