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Types of Cypriot Companies

Updated on Thursday 15th October 2020

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Opening a company in Cyprus is quite simple, and one of the first steps to take implies choosing a legal entity under which the local business will operate. From this point of view, the Cyprus Company Law offers various choices to foreign investors interested in setting up commercial operations here.

 

Below, our company formation specialists in Cyprus offer detailed information on the types of companies which can be incorporated in this country and the requirements related to the registration process. We specialize in offering customized company registration solutions to local and foreign investors in Cyprus.

Types of companies presented by our Cypriot company formation agents

When a foreign investor decides to set up a company in Cyprus, he must at first make up his mind upon the type of company that best suits his interests. The companies accepted by the Cyprus Companies Law.

The following types of companies are available for registration in Cyprus:

  • -          the sole trader or proprietorship is the simplest business form available in Cyprus;
  • -          the companies with limited liability which are divided into three categories are the most popular in Cyprus;
  • -          the general and limited partnership are also business forms which can be registered in Cyprus;
  • -          foreign companies can register branch offices, subsidiaries, and representative offices here;
  • -          those interested in enhanced asset protection and tax minimization tools can set up trusts in Cyprus.

Our Cyprus company formation experts have prepared a video about the main types of legal entities:

The Cyprus private and public companies limited by shares 

This type of company is the most popular in Cyprus. There is no minimum share capital required. It is necessary that one to 50 shareholders set up an LTD in Cyprus. They subscribe nontransferable shares and are liable to the company’s obligations only to the extent of their contribution. A private company which is entirely owned by foreign investors is also known as an offshore company or an International Business Company. Our experts in company formation in Cyprus can give you more details about the LTD.

The private limited liability company is the most employed type of company in Cyprus because it can be used for various purposes. Among these, we remind the following:

  1. -          it can be used as a holding company and benefit from many tax advantages;
  2. -          it can also be used as a trading company and undertake a wide variety of commercial activities;
  3. -          it can be used as a financial company and investors can set up private banking institutions under it;
  4. -          it can also be registered as a company ready to be sold, also known as a shelf company.

Private companies can also be registered as exempt private companies and unlimited companies in Cyprus. Our specialists in company registration in Cyprus can offer detailed information on the characteristics of each type of limited liability company and can help you invest in Cyprus.

A public company limited by shares in Cyprus is quite similar to a private company limited by shares.  However, the difference is that the shares are freely transferable and there can be as many shareholders as wished. Among the requirements of a public company is having at least 7 shareholders. The incorporation of a public company limited by shares requires approximately 26,000 euros as initial capital.

The Cyprus company limited by guarantee

A company limited by shares has a similar structure to the one for limited companies, but it is usually a type of company established for non-profit purposes and charitable actions. Our Cyprus company formation agents can help businessmen open this type of company.

The Cyprus partnership

A general partnership in Cyprus can be formed by two to twenty individuals. The registration of the partners with the Registrar of Partnerships is mandatory. No capital is required. Partners are fully liable for this partnership to the extent of their private assets.

The difference between a general partnership and a limited partnership is that the latter must have a general partner who is fully liable for the company’s obligations and at least one limited partner who is liable to the extent of his contribution. Just like the general partnership, a limited partnership requires at least two partners who must register with the Registrar of Partnerships. 

The Cypriot sole proprietorship

The main characteristic of a sole proprietorship in Cyprus is that the company is run by a single member with full liability. It is a simple and informal type of business, but still has to register with the Registrar of Partnerships.

Business structures available for foreign companies in Cyprus

Foreign companies interested in operating in Cyprus can set up subsidiaries, branches, and representative or liaison offices. The main differences between them reside in the types of activities they can undertake and degree of independence in relation to the parent company.

The subsidiary company will usually be registered as a limited liability company which will grant it the status of a Cyprus resident company. It is an independent type of company which can undertake other activities than the foreign parent company.

The branch office depends entirely on the parent company and its activities cannot be different from the foreign business’. The branch office is considered a Cyprus resident company; however, it is cheaper and easier to create and the subsidiary. It also benefits from many tax advantages as it is protected by Cypriot double taxation agreements.

The last business form available for foreign companies is the representative office which cannot undertake any commercial activity. This type of structure is limited to completing marketing activities and acting as a contact point between the foreign company and potential clients and business partners in Cyprus.

The trust in Cyprus

The trust has become very popular in the last few years in Cyprus thanks to the tax advantages it offers to its settlor. The creation of a trust is based on drawing up the trust deed through which the settlor can protect his or her assets by leaving them to the desired beneficiaries.

A Cypriot trust is one of the safest ways of reducing the tax burden on the settlor and it represents a great tax and estate planning solution for foreigners.

All companies are also required to register for VAT in Cyprus.

How to register any type of company in Cyprus

The registration of a company in Cyprus implies the business owner’s identification papers in the case of natural persons or the company’s incorporation documents in the case of foreign businesses. To these, the application forms issued by the Trade Register in Cyprus need to be filled out and the Articles of Association of the new company need to be drafted and notarized.

Based on these documents, the new company will receive its certificate of registration and will be able to start its operations in Cyprus.

For more information about the types of companies that can be established in Cyprus or matters regarding the taxes that must be paid by entrepreneurs, please contact our Cypriot company formation specialists. We remind foreign investors that they can rely on us for personalized company formation services in Cyprus and for specialized advice on choosing the right type of company in accordance with their needs.

 

Meet us in Larnaca

Call us now at +357 24 656 406 to set up an appointment with our consultants in Larnaca, Cyprus. Evgenios Erotokritou is the CEO of E.R. Team Global Consultants and he will help you open your company in Cyprus as fast as possible.

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