Commonly asked questions
Legal framework in Cyprus
It is Common law. Basic principles follow the U.K. law. Companies may be limited by shares or guarantee and can be both private and public.
Financial reporting framework in Cyprus
Cyprus has adopted International Financial Reporting Standards (IFRS). This coincides with the European Union Directive and benefits companies registered in Cyprus in that no transition to these standards is required. No other statutory or other local financial reporting standards exist. Audit services in Cyprus are of the highest quality with local presence from all big 4 international audit firms and almost all medium size international audit firms. Fees are very competitive in contrast to the quality of service received.
Financial tax year in Cyprus and how tax payments are made by Cyprus companies
The financial tax year in Cyprus coincides with the calendar year from 1 January to 31 December and therefore most Cyprus registered companies chose their financial reporting year within this timeframe. In case where the financial reporting year overlaps over two tax years the results presented must be apportioned over the correct tax years and submitted to the tax authorities accordingly.
A provisional tax return must be submitted by every Cyprus company by 1 August of each tax year to the Inland Revenue providing the annual estimated taxable profits and the tax payable for the same period. The tax payable is split into three instalments of which the first is payable on the same date. The second instalment is payable by 30 September and the third by 31 December. Any revisions to the original estimated taxable profits and consequently tax payable may be made on these dates. Non compliance to the above deadlines results in penalties.
The final tax return for the year shall be submitted by the end of the following year after the tax year in question. The tax return must be signed by the auditors and confirm compliance to the audited results. Any balance remaining payable after the provisional tax above must be settled.
Time frame for incorporation
Incorporation of a Cyprus company takes usually 3 to 4 weeks from the application date to the Registrar of Companies in Cyprus. In case where an urgent request exists, off-the-shelf companies are available of which the transfer of the shares may be executed immediately. Further to the incorporation of a Cyprus company, services like Directors, registered address, nominee shareholders, Company secretary and many other are available to suit specific requirements based on the circumstances.
Banking in Cyprus
The market in Cyprus in relation to banking services is very similar to any other European country. Companies (local and international) may apply for a bank account (in any major currency) which may be operated over a fax or the internet. This may be arranged usually while incorporating your Company.
