The Republic of Cyprus is an island in the Eastern Mediterranean Sea, east of Greece, south of Turkey, west of Syria, Lebanon, northwest of Israel and north of Egypt. Cyprus is the third largest island in the Mediterranean Sea, a member state of the European Union.
The Republic of Cyprus has de jure sovereignty over the island of Cyprus and its surrounding waters, except for the British Overseas Territory of Akrotiri and Dhekelia, administered as Sovereign Base Areas. However, the Republic of Cyprus is de facto partitioned into two main parts; the area under the effective control of the Republic, comprising about 59% of the island's area, and the Turkish-controlled area in the north, calling itself the Turkish Republic of Northern Cyprus and recognized only by Turkey, covering about 36% of the island's area. The international community considers the North as occupied territory of the Republic of Cyprus. Cyprus is the third most populous island in the Mediterranean Sea and one of its most popular tourist destinations.
The official languages are Greek and Turkish but English is widely spoken and is the language mostly used in business, government and the courts.
Laws are based on the English legal system and company law is modeled on the UK Companies Act 1948.
Cyprus joined the European Union on May 1, 2004 and on 1 January 2008 the Republic of Cyprus joined the Eurozone. Cyprus enjoys the lowest corporate tax rate in Europe: there is a 10% corporate tax levied on the resident companies based on the worldwide income.
Cyprus has been sought as a base for several offshore businesses for its highly developed infrastructure. Tourism, financial services, and shipping are significant parts of the economy. The island has witnessed a massive growth in tourism over the years and as such the property rental market in Cyprus has grown alongside. Added to this is the capital growth in property that has been created from the demand of incoming investors and property buyers to the island.
The Name of the Company
There are certain restrictions on company names. Any name which the registrar of companies considers undesirable or any name that is similar to or identical to an existing company is prohibited. Any name that implies illegal activity or Royal or Government patronage is also disallowed. Names may be expressed in using the Greek or Latin alphabet. Certain names require consent or a license for example "Bank", "Trust", "Building Society", Insurance", "Re-Insurance", their foreign language equivalents or any name which the registrar considers may have a connection with the aforementioned. The name of each company must end with the word "Limited" or its abbreviation "Ltd.".
Shareholders of the Company
The minimum "registered shareholders" can be one. The minimum "beneficial shareholders" may also be one. Shareholders can either be individuals or legal corporate entities. Shares may be held by trustee companies for the benefit of the beneficial owners where anonymity and confidentiality of the beneficial owners is required.
Share capital of the Company
Share capital may be expressed in various currencies such as United States Dollars, Euro etc.. Registered shares of par value, preference shares, redeemable shares and shares with no voting rights are permitted. Bearer shares are not permitted.
Registered Office / Agent
A registered office must be maintained in Cyprus.
Directors / Officers
The minimum amount of directors is one. The director may be a natural person or corporate, be of any nationality and need not be resident in Cyprus. Management powers are freely determinable by the company's articles of association. General Powers of management are usually given to the Board of Directors acting as a Board with provision for a possible limit on borrowing powers.
All Cypriot companies must appoint a company secretary, who may be local or foreign, physical or legal. It is advisable to appoint a resident company secretary. Books, Records, and Seal: Statutory books, registers, and the seal of the company should be kept at the registered office. Summons and writs are also served at the registered office address. Proper records must be kept with respect with assets and liabilities of the company.
In view of Cyprus' accession to the European Union since January 1st, 2003, new tax legislation was enacted eliminating the distinction between local and offshore companies. There is now no longer a distinction between local companies and offshore companies. With this new legislation companies now, with regards to taxation matters are distinguished to:
⋅ Resident companies
⋅ Non- resident companies Taxation of resident companies vary from 0% - 10% subject to the nature of their income. Non-resident companies are not subject to any tax in Cyprus on any income derived from sources outside Cyprus (0%), but if they have activities in Cyprus any net profit for these activities is taxed according to normal rates.