It is a company’s main goal to keep its profits at the highest level possible. In this article we will focus on the various benefits a Cyprus company provides. It is a fact that Cyprus’ taxation system offers this opportunity to the above mentioned entities. With a 10% tax on corporate profits, the exemption from corporate tax of interest income, dividend income and profits from disposal of securities and a host of double taxation treaties Cyprus forms the perfect candidate for any company protecting its interests. Furthermore, its geographical position gives an easy access to Europe as well as the Middle East and Africa thus making any transaction easier and faster.
It is imperative for any company wanting to be established in Cyprus to ask the right questions and take the proper decisions regarding the kind of the legal entity and everything following after this.
Type of Legal Entity
The most important question which needs to be asked is which tool is the most appropriate for a client. Is it a company? After deciding the right tool, the next question on the table is the structure. A corporate structure can take three forms, public limited company, private company and limited liability company.
Company Name
It is important to choose the name of the company carefully as it will play a consistent role in its incorporation. This is so, as after choosing the name, the company must be submitted to the Registrar of Companies (by your lawyer). While at the Registrar of Companies, the name will be checked and if it is too similar to another, misleading, deceptive or offensive the company will not be given a permit and as a result will not be incorporated.
The Share Capital
Each company is authorized to issue a specific amount of shares to its shareholders, also known as share capital. These are then divided into individual shares of fixed sums, commonly upon creation the share capital will be 1000 shares of € 1 each. These numbers can increase when issuing new shares at any given time.
The Shareholders
Shareholders are the ones to whom the shares are allocated. There must be at least one registered shareholder, which can be either a person or a legal entity (i.e. company).
Directors
The appointed director or directors of a company can either be Cypriot or a foreigner. However the nationality of the director will play a role in determining if the company can benefit from the Cypriot taxation laws (if it is managed and controlled in Cyprus).
The main responsibility and role of the directors is the approval of the constitutional documents of the company, such as the Memorandum of Association. Furthermore they have the obligation to ensure the implementation of the company’s fundamental documents and Cypriot Law in its day to day functioning.
Company Secretary
The post of company secretary is fulfilled by a person voted by the Board of Directors. This person is the administrator of the company instructed by the Board of Directors and, without the Board’s or Shareholders’ approval, has no binding authority.
Registered Office
This is the official address of the company and to which all correspondence will be sent. For Cypriot companies it is imperative that the registered address be in Cyprus.
Objects
The Memorandum is considered to be the most important company document. Although it is drafted in general terms, it is the document clarifying the fields in which the company is allowed to take action and undertake the activities, again, described in the Memorandum.
Articles of Association
The Articles of Association are the main document describing the functioning of a company. They outline the procedures for any company activity. Each document drafted is according to the client’s needs and wants for their company. It is not uncommon for these articles to change in time as long as this change follows the appropriate procedure.
Creation of the Company
For the ease of clients, there are some companies already created and incorporated (off-the shelf companies) which can be changed to fit, accordingly, the client’s needs. Or they can be created from scratch based on the client’s description of the company they have in mind.
Our Firm can provide this for you, as well as any other assistance needed for the incorporation of the company. The firm provides the client with services regarding all the above mentioned steps towards becoming the owner of a Cypriot company.