Foreign Company operating in Cyprus
When a foreign company is going to be operating in Cyprus it can do so by registering with the department of the registrar of companies and official receiver. In this article we will be considering the legal aspects regarding doing business in Cyprus, the relevant obligations, as well as the differences between the various business vehicles that a Foreign Company operating in Cyprus may choose from for a quick answer scroll to the Questions and Answers section.
Every foreign Company wishing to operate in Cyprus must register with he department of the registrar of companies within 30 days. Such registration requires that the necessary forms are submitted along with the supporting documents. Because a separate legal personality is not created foreign companies are required to appoint a local legal representative. The exact extent of this local representatives obligations towards third parties and the government authorities is not specified under the said law, nevertheless it is expected that he/she/they would be the first point of contact with any interested party.
Frequently Asked Questions Regarding Foreign Companies Operating in Cyprus
Can a foreign Company operate in Cyprus?
A foreign company established outside Cyprus may choose to operate in Cyprus. To do so it must register, within one month from commencement of operation, with the department of the registrar with of companies in accordance with the provisions of the Companies Law, Chapter 113.
Is a seperate legal personality created because of the foreign company operating in Cyprus ?
It must be clarified that a separate legal personality is not created simply because a foreign company operating in Cyprus registers with the registrar of companies. To create a separate legal personality a Cyprus private company limited by shares, or a Cyprus private company limited by guarantee should be formed in accordance with the provisions of the Companies Law, Chapter 113.
How to register a foreign Company operating in Cyprus?
Prior to registration of a foreign company operating in Cyprus the place of operation and the legal representative must be selected. Once these two matters have been resolved the legal representative or the legal team entrusted with the registration must request a name approval from the registrar of companies.
Once the registrar approves the use of the foreign Company’s name then within 30 days of commencing operations the following process should be followed:
Form AE1 is the main form entailing the registration with the local authorities.
- Provide the country of incorporation
- The address currently operating
- A certified copy of the internal rules. Certification should be in the form of an apostille or in the instance that the foreign jurisdiction does not participate in the Hague Convention on Private International Law then the document is to be certified by a competent foreign authority or a certified translation in case the document is in a language other than English.
- Register of the Director and Secretary including, in the case of an individual the name and surname, the ordinary address and nationality and in the case of a legal person, the business name and the registered address.
- Name and address of the legal representative
Form AE2 is used to capture the details of the director and first secretary of the Company. The form requires that the following information is provided:
- Name and Surname
- Previous Names
- National Identity
- Date of birth
Form AE3 is used to capture the details of the legal representative residing in Cyprus of the foreign company. The form requires:
- Name and Surname
- Previous Names
- National Identity
- Date of birth
Can a foreign Company operating in Cyprus hold assets?
A foreign company operating in Cyprus can hold assets, it can hire people, it can rent offices and even is able to acquire and hold real estate situated in Cyprus. Nevertheless the said agreements should be entered into in the name of the foreign company operating in Cyprus.
What are the annual obligation of a foreign Comapny operating in Cyprus?
Every year until the 30th of June companies registered with the registrar of companies in Cyprus must pay pay the annual levy amounting to Euro 350. if the company delays by 2 months, that is until the 30th of August of each year it is required to pay a penalty of 10%. If company pays the levy within 5 months the penalty will be 30%.
The board of directors of a Company procure that a full set of financial statements are prepared in accordance to the International Financial Reporting Standards. Every foreign company operating in Cyprus must once a year prepare financial statements for the foreign company’s operations in Cyprus. The financial statements are presented to the general meeting, the latest within 18 months after its registration and thereafter once every year.
The board of directors is responsible for the maintenance of proper books and records which will be the backbone of the financial statements.
Exempt from the obligation to prepare financial statements are EU member state companies who are eligible in accordance with the national rules of the member state to do so. In this case the foreign company operating in Cyprus submits to the registrar of companies a certificate signed by the director and the secretary of the company is submitted.
What are the fees for registration of a Foreign company Operating in Cyprus?
The submission of AE1, AE2 and AE3 come at a cost of Euro 380 not including any third party fees, courier costs and out of pocket expenses.
The cost for requesting certificates from the registrar of companies amounts to Euro 40 per certificate not including any third party fees, courier costs and out of pocket expenses.
What evidence is available to prove that a foreign company has registered to operate in Cyprus?
Upon submission of AE1, AE2 and AE3 the registrar will issue a certificate declaring that the Company has been registered and that it may operate in Cyprus. Furthermore a similar notice is made to the official newspaper of the Republic of Cyprus and the online website of the registrar.
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Publications on Cyprus Business Law
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