International Business Companies (IBC)

Establishment procedure

Since Cyprus joined Europe, both EU citizen and non-EU nationals can incorporate a Limited Liability Company with no limitations or restrictions. Such companies may engage in trading activities both in Cyprus and abroad. The number of shareholders may be from 1 to 50 and they can be physical persons or legal entities. At least one director and one secretary must be appointed and the company's registered office must be in Cyprus. Although the law does not require this, from a tax planning point of view it is important that the company is managed and controlled in Cyprus and, accordingly, it is recommended that the majority of the directors appointed are residents of Cyprus.

The whole incorporation procedure may be concluded no later that within 15-20 working days.

Annual Financial Statements

In accordance with the Companies Law all companies must maintain such records and is necessary to disclose, with a reasonable accuracy, their financial position, whenever they are requested to do so as to show and explain their transactions and enable the directors to prepare financial statements in compliance with the Companies Law.

A statutory audit is also required for all companies. The shareholders at the first general meeting appoint an auditor and he holds office until the conclusion of the next annual meeting. Cypriot firms of auditors must audit Cypriot companies yearly. The auditors are required by law to report to the shareholders whether, in their opinion, the financial statements have been properly prepared in accordance with the provisions of the Companies Law and give a true fair view of the state of the affairs of the company at the end of the financial year in question.
The audit is conducted is accordance with the International Auditing Guidelines.

Filing Requirements

Directors' report and financial statements
According to the Companies Law all companies must prepare a directors' report and audited financial statements each year which must be presented before the company at a general meeting thereof. The financial statements comprise a profit and loss account, balance sheet and supplementary notes. Directors are legally responsible for the preparation and contents of the report and financial statements. The first such financial statements must be prepared and presented before the meeting no later than 18 months from the incorporation of the company.

Filing of annual return

All companies must file a return with the Registrar of Companies at least once a year, within 42 days after their general meeting. This return (known as the annual return), is signed both by a director and by the secretary of the company and must include information on the registered office of the company, the situation of registers of members and debenture holders, the amounts of shares and debentures, indebtedness, shareholders, directors and secretary. Failure to file the annual return may result in penalties.