CYPRUS LEGAL ENTITIES
The Cyprus legal system is largely based on the English model as Cyprus was a British colony until 1960, when the island became an independent republic. After independence in 1960 the English legal system was largely preserved and following the accession of the Republic of Cyprus to the European Union in 2004, the Constitution was amended so that European law has supremacy over the Constitution and national legislation.
Cyprus companies are governed by Company’s Law, Chapter 113. Over the years Cyprus introduced changes in its Company Law, Cap. 113 rendering the island an attractive jurisdiction whereby international businesses may conduct their activities via a Cyprus legal entity.
Types of Cyprus Legal Entities:
Limited Liability Company by Shares
This is the most popular vehicle for carrying on business. The main characteristics of the Cyprus Company are:
According to Company’s Law, Cap.113, every company registered in Cyprus is a public company unless its articles of association contain the following provisions that will constitute it as a private company:
Limited Liability Company by Guarantee
The characteristics are mainly similar to the Limited Liability Company by shares, apart from the liability of each member being limited to the amount agreed on the Memorandum of Association to be contributed in the event the company goes into liquidation.
Branch of a Foreign Company
A company incorporated outside Cyprus may establish a branch or representative office in Cyprus provided that within one month from the date of establishing a place of business in Cyprus, it registers itself as an overseas company with the Cyprus Registrar of Companies.
The branch does not amount to the creation of a new legal entity in Cyprus, as the entity is incorporated abroad and simply has a branch in Cyprus through which it may carry its international activities.
Every foreign corporation that maintains a branch in the Republic must submit, for every financial year, copies of its financial statements as presented in its last AGM and published in accordance with the laws of its country of incorporation, except that EU corporations that publish audited financial statements in their countries of registration and submit these financial statements to the Registrar of Companies are exempted from preparing and submitting separate branch financial statements.
Societa Europea (SE)
An SE is a European Public Limited Liability Company. An SE may be created on registration in any one of the Member States of the European Economic Area (EEA). European Regulation requires Member States to treat an SE as if it is a public limited company formed in accordance with the law of the Member State in which it has its registered office.
There are several ways of forming an SE: by merger, as a holding company, or as a subsidiary. An SE can also be formed by a PLC transforming into an SE.