Foundation of Cyprus Companies

Traditionally Cyprus was a territory with a growing business activity mainly as a station for international businesses. The means for such activities has always been the Limited Liability Company with shares. In recent years there has been a rapid increase in the establishment of Companies, mainly because of the tax incentives enjoyed by such establishments through Cyprus.



1. The Companies Law Cap. 113 provides for the establishment of two types of companies:

1.1 Public Companies and

1.2 Private companies divided as follows:

1.2.1. Exempted Private Companies



1.2.2. Private Companies of limited liability


2.Limited Liability Companies by guaranty

 
The main characteristic of a limited liability company is that the liability of members (shareholders) is limited regarding the nominal value of the shares held by them. The articles of association of a private company restrict the right to transfer its shares and the number of shareholders to a maximum of fifty (50) members and prohibits any invitation to the public to purchase any shares or stock of the company. In the case of a public company these limitations and restrictions, do not apply.

In the case of a company of limited liability by guaranty the liability of its shareholders is restricted by the articles of association to the amount that each shareholder undertakes to guarantee. This type of company is usually adopted in non-profit companies.

The type of company adopted exclusively by foreign investors who are interested in forming a company in Cyprus, is the Limited Liability Company by shares.