The Legal Foundation
Cyprus company law is governed primarily by the Companies Law, Cap. 113, which is heavily based on the UK Companies Act 1948. This English-law foundation makes Cyprus law familiar and navigable for UK and Commonwealth business people. Cap. 113 has been amended numerous times to align with EU directives, but its core architecture remains common law.
Key Roles in a Cyprus Company
- Director: Responsible for managing the company's affairs. Must be at least 18 years old. Can be any nationality. Corporate directors are permitted. Minimum one director required.
- Company Secretary: Mandatory for every Cyprus company. Responsible for statutory filings, maintaining company records and organising board meetings. Many companies use a professional services firm as company secretary.
- Shareholders: Owners of the company. Can be individuals or corporate entities. Minimum one shareholder required; no maximum for private companies.
Director's Duties
Cyprus law (following English common law tradition) imposes significant duties on directors:
- Duty to act in good faith in the best interests of the company
- Duty to exercise reasonable care, skill and diligence
- Duty to avoid conflicts of interest
- Duty not to accept benefits from third parties
- Duty to declare interests in transactions
Breach of these duties can result in personal liability for the director.
Annual Compliance Obligations
- Annual Return (HE32): Must be filed with the Registrar of Companies by 28 January each year. Filing fee: €20. Late filing carries penalties.
- Audited Accounts: All Cyprus companies must have their accounts audited annually by a Cyprus-registered auditor (ICPAC member). Exemptions exist only for dormant companies.
- Corporate Tax Return (IR4): Filed with the Tax Department. Deadline: 15 months after the end of the tax year.
- Annual General Meeting: Must be held at least once per year. Can be waived if all shareholders consent in writing.
Share Capital and Distributions
There is no minimum share capital requirement for Cyprus private companies (€1 is sufficient). Dividends can be paid at any time from distributable profits. There is no withholding tax on dividends paid to non-resident shareholders, making Cyprus an efficient holding company jurisdiction.