Incorporation of a Cyprus Company
Cyprus Company Incorporation is a notion used to describe the procedure of formation a legal entity in the Republic of Cyprus, which is commonly known – the Company. The same notion is also common mentioned as company registration or formation.
Registration a company in Cyprus – is not complicated and speed process in comparative with many other European countries. Generally, Cyprus Company registration commence with submission an application for setting up a company to the Registrar of Companies. More often than not, the company will be incorporated within one week.
An expanding monthly number of applications for Cyprus company registrations with the Cyprus Registrar of Companies serves as a weighty evidence of an increasing interest in Cyprus as a jurisdiction for international business and investment. Cyprus company registration statistics reflects a slight but consistent increase particularly since the beginning of 2015.
The registration of a Cyprus company is effortless and candid. By way of explanation, Cyprus company formation and Cyprus company registration are two distinctive procedures, where the Cyprus company registration serves as the final part after the Cyprus company formation.
Step of the Cyprus company Formation mainly encompasses the preparation of the Cyprus company’s Memorandum and Articles of Association, the appointment of directors and company secretary, and, if needed, the preparation of a shareholder agreement. The formation of a Cyprus company legally fixes with the signing of the Memorandum and Articles of the Cyprus Company.
Notwithstanding the Memorandum and Articles of Association of the Cyprus company have been signed, the company is not considerate as operative entity. It should be taken into account due to the fact that in some other countries, a company formed may act and conduct business with the status “under incorporation”.
In Cyprus, Company can act and conduct business, only after its registration with the Cyprus Registrar of Companies. The application for registration can be submitted only after the procedure of Cyprus company formation has been finalized.
In the part of Cyprus company registration, personal documents of the company’s management (i.e., shareholders, directors and the company secretary) are not submitted to the Cyprus Registrar of Companies. They are kept with the company itself. If Cyprus company formation and Cyprus company registration are performed with the help of an authorized Cyprus service provider or registered auditors, or law offices, then personal documents are kept by such service providers.
Cyprus company registration may take one to two weeks from the date of submission of the application. It depends on the work load at the Cyprus Registrar of Companies.
The significance of due diligence and compliance procedure
More than 97% of Cyprus company formation and Cyprus company registration are executed by licensed local service providers in Cyprus.
In comparative to the previous years, today, according to the rules of the EU, FATCA, FATF and the OECD directed to the encounter of financial crimes and terror financing, the process Cyprus company formation and Cyprus company registration require thoroughly meticulous due diligence and compliance. These actions to be undertaken and performed by the licensed service providers in Cyprus, before the commencing of the Cyprus company formation.
Past years, the “identification” based only on documents of all natural persons involved in a Cyprus company was enough. Still today, prior to the actual formation of a Cyprus company starts, thorough due diligence procedures apply for all licensed service providers engaged in Cyprus company formation and Cyprus company registration. Licensed service providers in Cyprus, and other countries alike, are obliged to keep records of their due diligence procedures.
The law requires the repeat of due diligence and compliance procedure on a regular basis due to the risk classification of the Cyprus Company and its beneficial owners. Diverse directives of the EU, such as the Anti Money Laundering Directive, for example, and various international agreements, such as the Common Reporting Standard, require at least annual updates of due diligence procedures.