CYPRUS COMPANY LEGISLATION: The main company legislation under which CYPRUS COMPANIES are incorporated and administered by the REGISTRAR OF COMPANIES, at COMPANIES HOUSE,  in Cyprus is the Companies Law, CAP. 113 of 1951. This is practically a duplicate of the Company’s Act of 1948 of the United Kingdom.

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WHAT IS AN IBC?  A Cyprus International Business Company or a CYPRUS  IBC is one of the best and most effective vessels for your International Tax Planning.
The Cyprus legislation contains the right of taxation on preferential terms for the companies belonging to non residents by virtue of the many DOUBE TAX AVOIDANCE TREATIES signed with over 42 countries, making the Cyprus Company the most effective way for you to plan your tax, so that the minimum possible CORPORATE TAXES, are paid, legally and cost effectively, making the Cyprus Company or a CYPRUS IBC a very powerful tool for your tax planning.
 An IBC can either be resident in Cyprus if its management and control is in Cyprus or it can be nonresident if its management and control  is outside Cyprus.

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WHAT IS AN LLC:     An llc is a Cyprus Company  of  limited liability,  a l-imited l-iability c-ompany. It has no different attributes than the Cyprus Company described above and hereinbelow. It is simply a shorcut use to denote the common or garden CYPRUS COMPANY. Of course there are other forms of Cyprus Companies, such as a company limited by guarantee, a partnership etc. But when we speak about the Cyprus Company we mean the LIMITED LIABILITY COMPANY, by which the directrors and shareholders have no responsibility for the debts of the company.

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THE DOUBLE TAXATION TREATIES:

Cyprus has signed  DOUBLE TAX TREATIES, with many countries all over the World, which makes the Cyprus Company much more attractive than those of  other Jurisdictions. Combined with the Cyprus Corporate Tax Rate of 10%,  the 0%  Tax on the dividends paid out to the shareholders and the liberal Cyprus Tax legislation , Cyprus is a very priveliged and respected jurisdiction. There are more than 42 DOUBLE TAX TREATIES signed between Cyprus and other countries all over the world, such as:

THE REGISTRATION OF A CYPRUS COMPANY:

        THE NAME OF THE CYPRUS COMPANY:  

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The first step in order to register a CYPRUS 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 company 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:   

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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:  

 A CYPRUS IBC 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 hande 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 SHAREHODLERS OF THE CYPRUS  COMPANY:   

A CYRPUS 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 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 appoint ment 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, law suits, 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:

1.   Agreement for provision of nominee services
2.   A trust deed guaranteeing the ownership of the shares to the Real Beneficial Owner
3.   Undated instruments of transfer of the shares to the benefit of the real owner
4.   A resolution by the Directors through which the transfer of the shares to the beneficial owner is approved.
5.   Original share certificates for the shares issued in the names of the Nominee Shareholders, delivered to the real owner
6.   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.
 

CONFIDENTIALITY               

All information revealed by you to our company is treated as highly confidential. No third party will ever have knowledge of your affairs, dealings, client lists or business secrets. Our company is willing to sign a confidentiality agreement with you. 

15.02.2011

The Cyprus Company Formation is the legal act of the creation of a new distinct legal entity, which is completely separate and discernible from the physical persons, who are the Shareholders or members of the Cyprus Company.

According to the Cyprus Company Law, once a Cyprus Company Formation is complete, then we have a Cyprus Company Incorporation. So the final stage of a Cyprus Company Formation is its INCORPORATION.

In other words, when the partners get together and sign the necessary documents to set up a Cyprus Company that is the process of a Cyprus Company Formation. When all is ready and everything is thus submitted to the CYPRUS REGISTRAR OF COMPANIES, at the CYPRUS COMPANY HOUSE, we are entering the stage of a Cyprus Company Incorporation.

What is then the Cyprus Company Registration? That is the formal act of the CYPRUS REGISTRAR OF COMPANIES of actually marking in his “BOOKS” the incorporation of this Cyprus Company: i.e. the Name of the Company, the names, the addresses and other details of the Shareholders and Directors and the number of shares each has taken, the address of the Registered Office of the Cyprus Company etc and most important the Number of Registration of this new Cyprus Company.

Once the Cyprus Company Formation is complete, then the Cyprus Registrar of Companies, issues the incorporation certificates of the Cyprus Company.

These Certificates include the Incorporation or Registration Certificate of the company, the certificate of Directors and the company Secretary, the certificate of Shareholders and the certificate of the Registered Office of the company. At the initial stage of incorporation no other certificate is issued.

We mustn’t forget, of course, that an integral part of the Cyprus Company Formation is the Memorandum and Articles of Association. The Memorandum in brief, contains all the activities which the company may trade in and the Articles contain the “rules” of the game i.e. all the rules which regulate how the company is run by the Directors and of course the members.

2.    CYPRUS REGISTRAR OF COMPANIES:

As the name suggests, the Cyprus Registrar of Companies, is the top official, appointed by the Cyprus Government, specifically to manage this branch of the Cyprus financial activity, called the Cyprus Company Formation.

The Cyprus Registrar of Companies is the absolute ruler. He oversees the whole process of a Cyprus Company Formation, Incorporation and Registration. The issue of the necessary certificates, the use of a proper Company name, the abiding by the company owners of all the regulations, the correct process and way of all changes in a company structure and finally is striking off the records or winding up and much much more. According to the Cyprus Company Law, Cap 113, the Cyprus Registrar of Companies, has the power to intervene in the company formation and other formalities even months after the Cyprus Company has been incorporated and registered in the Cyprus Company Registry.

 3.    CYPRUS COMPANIES HOUSE:

The Cyprus Companies House, as the name again suggests, is the main official office of the Cyprus Registrar of Companies. It’s the place where all the personnel is situated, where all the records, books, files are kept and the place where you will go to file the documents for the incorporation of your Cyprus Company.

The general public, is welcome to visit the Companies House, to self help themselves at any of Company House departments and to secure themselves a Cyprus Company Formation or to get approval for a new Cyprus Company name, to secure fresh Certificates for his Cyprus Company or to file his HE32 form and many other services.

Basically, the COMPANIES HOUSE is a one `stop shop` for all services needed for the Cyprus Company!

4.    CYPRUS COMPANY INCORPORATION:

The term Cyprus Company Incorporation, is basically the same as the Cyprus Company Formation. Here we have the notion of corporation. 

In other words, when the members who join together to a common venture create a company that is the act of Incorporation of a Cyprus Company. This is a worldwide notion. The Incorporation of a Cyprus Company then has the same meaning as the process for the Cyprus Company Formation.  

 5.    CYPRUS OFFSHORE COMPANY:

It was a general term describing the Cyprus Company which had  all the legal characteristics of a local Cyprus Company, but It was allowed to trade only offshore. It enjoyed a few privileges apart from the Corporate Income Tax, which has only 4, 25%. Now the Cyprus Offshore Company is extinct. It has been replaced by the Cyprus IBC, which is a normal local Cyprus Company, incorporated and registered by the Cyprus Registrar of Companies, at Cyprus Companies House. It enjoys the same privileges as the local companies with a Cyprus Tax of10% on the company`s profits and 0% on the dividends paid out to the shareholders.

6.    CYPRUS COMPANY REGISTRY:

The Cyprus Company Registry is a term which connotes that a Cyprus Company is filed in a register at the Cyprus Companies House, where all companies incorporated ever, can be found.

The Cyprus Company Registry is of course, kept meticulously by the Cyprus Registrar of Companies and updated daily, so that everyone interested can make a search of the Cyprus Company Registry, in order to safeguard against any dangers. In the Cyprus Company Registry, one can find in the particular company’s file all the information of the financial status of every Cyprus Company.

He can also see filed there all the changes to the structure of the company, such as the name, the shareholders, the directors, an increase of decrease of the Cyprus Company`s capital which is crucial sometimes, or any changes to the Memorandum or Articles of Association.

06 MAY 2011