How the euro will impact your company

If your company was incorporated with a share capital denominated in Cyprus Pounds (CYP) you should know that as of 1 January 2008 this shall be converted to Euro. Cyprus is officially joining the Euro zone on this date with a rate that will be fixed on 1 September 2007.

This rate will be used to convert all Cyprus Companies’ share capital which is denominated in CYP into Euro. As specified in the Cyprus Law N.33(I)/2007 “For regulating all related matters with the adoption of Euro and the smooth transition from the CYP to Euro” the application for the conversation of the share capital should be submitted to the Registrar of Companies by the Company secretary once a Members resolution has passed during the General Meeting. Any fees usually charged by the Registrar of Companies for the application to convert the share capital in a different currency will not be applicable.

If the conversion results to a reduction of capital, and although the Company law in Cyprus requires a court order for the reduction of capital, this requirement is waived. In case of capital reduction caused due to the conversation to Euro and which is decided to be distributed to the shareholders of the Company and although the Special Contribution for Defence law in Cyprus specifies that taxes might be applicable, no such taxes will be deductible.

In case of capital increase caused due to the conversion, the increase may be paid up either by cash or the use of reserves.

Please also note that subject to unforeseen circumstances, we will not charge our clients for any work related to the conversion of the share capital from Cyprus pounds to Euro.

Please visit www.euro.cy for more information.

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