Cyprus: Company formation
Cyprus: Company formation
We specialise primarily in Corporate and Commercial Law, and advise clients on all aspects of international and commercial activity. This includes, inter alia, the legal and fiscal aspects of the formation and incorporation of offshore companies, trusts, shipping, mergers and acquisitions, joint ventures and international tax planning for companies and individuals. We guide our clients from the initial instructions through to the incorporation and annual management to suit the clients’ requirements.
Our firm is essentially international in outlook with approximately half of our clientele being of international origin. However, we also have a firm foothold in the domestic market.
We believe that business in Cyprus has been less affected by the global economic downturn than many other countries. All of the advantages that existed prior to the economic crisis are still present in Cyprus. For example, low rates of income tax, and our English-based legal system (Cyprus company law is based on the English Company Law of 1948, which has been amended accordingly in order to comply with European Law, and is now governed by Cyprus Company Law, Cap. 113).
However, what may have changed is the mindset of some businesses, leading them to be more cautious in their dealings – but this in itself should not be viewed in a negative light.
The island’s location at the crossroads of Europe, Asia and Africa; its English-based legal system; generous tax incentives; and air/sea links have all contributed to establishing Cyprus as a highly favorable and competitive European offshore center. Its entry into the Euro-zone in 2007 meant that any final barriers to trade were removed, thus improving the Cypriot economy.
The fact that the trust relationship is recognised under Cyprus Law, both by statute and in equity, provides greater protection for beneficial owners of companies and more flexibility. The principles of equity which apply under English Law were preserved in Cyprus after its independence by the provisions of our Courts of Justice Law of 1960.
The procedure for incorporating a Cyprus Company or an International Business Company (IBC) is relatively simple, with incorporation currently taking 7-12 days.
One matter which may be seen by some as a complexity in Cypriot company formations, is the fact that bearer shares are not possible in the case of a Cyprus private company. However, anonymity can still be achieved in one of two ways: by having as one of the shareholders of the Cyprus company corporations incorporated abroad which may themselves issue bearer shares; or by having Cypriot nominee (or trustee) shareholders.
Many clients prefer to use nominee services for the shareholders and directors as well as for the registered office and secretary and our office is well equipped and experienced at providing such services.