Cyprus Company Law: Key Aspects for Business Owners
For business owners and entrepreneurs, understanding the legal framework of a country is the first step toward a successful venture. In Cyprus, company law is a crucial aspect of the business environment, providing a stable and predictable foundation for corporate operations. The Cypriot legal system, based on British Common Law, is a key reason for the island's appeal as an international business hub. This guide will provide a detailed look at the key aspects of Cyprus Company Law, from the types of companies you can form to the responsibilities of directors and shareholders. This information is essential for ensuring your business is legally compliant and well-managed in 2025. For a broader overview of the local business environment, you can read our guide on The AI-Powered Marketer: Business Adviser. You can also explore our guide on Cyprus Company Registration: A Step-by-Step Guide 2025.
1. The Legal Framework: The Companies Law, Cap. 113
The main law governing companies in Cyprus is the Companies Law, Cap. 113. This law is based on the UK's Companies Act of 1948 and has been amended over the years to be fully compliant with the European Union's directives. The law provides a clear and comprehensive framework for all aspects of a company's life, from its formation and administration to its dissolution. This stability and predictability are a major reason why Cyprus is a premier destination for international business. The law outlines the duties and responsibilities of directors, the rights of shareholders, and the legal requirements for corporate compliance. You can also explore our business directory of all businesses.
2. Types of Companies in Cyprus
Cyprus Company Law provides for a number of different types of companies, each with its own unique characteristics and legal requirements. The most common types of companies for business owners are:
Private Limited Company (LLC)
The Private Limited Company (LLC), or Private Company Limited by Shares, is the most popular choice for both local and foreign entrepreneurs. It is a separate legal entity with limited liability for its shareholders, which means that the owners' personal assets are protected in the event of a business debt. The minimum number of shareholders is one, and the maximum is fifty. The company must have a registered office in Cyprus and a company secretary. This structure is ideal for businesses of all sizes due to its robust legal framework and flexibility. For more information, you can find a suitable professional corporate services firm in our directory. You can also explore our guide on Cyprus Company Formation Requirements for Foreigners.
Public Limited Company (PLC)
A Public Limited Company (PLC) is a company that is listed on a stock exchange and can offer its shares to the public. The minimum number of shareholders is seven, and there is no maximum. The company must have a a minimum share capital and a number of other legal and administrative requirements. This structure is typically used by large companies that want to raise capital from the public. For more information, you can explore our directory of all finance, banking, and investment.
3. Corporate Governance and Administration
Cyprus Company Law has a clear and robust framework for corporate governance and administration. The law outlines the roles and responsibilities of the key players in a company's governance and administration.
Directors and Shareholders
The directors are responsible for the management and control of the company. They are appointed by the shareholders and are responsible for making all the key decisions. The shareholders are the owners of the company and have a number of rights, such as voting rights and the right to receive dividends. The law provides a number of protections for both directors and shareholders to ensure that the company is managed in a fair and transparent way. For more on the local business environment, you can check out our guide on Avoiding Double Taxation with a Cyprus Holding Company.
The Company Secretary
The company secretary is a crucial part of the corporate structure. The secretary is responsible for a number of legal and administrative duties, such as maintaining all the company's official records, filing all the necessary documents with the Registrar of Companies, and providing legal and administrative advice to the board of directors. The secretary is a key figure in ensuring legal compliance and corporate governance. You can read our guide on Understanding the Role of a Company Secretary in Cyprus for a deeper dive. You can also explore our guide on Cyprus Shelf Companies.
Registered Office
Every company registered in Cyprus must have a registered office on the island. The registered office is the official address of the company and is used for all legal and administrative purposes. It is a legal requirement that is a key part of the company's legal identity. The registered office is a place where all the official correspondence is received and is a key part of a company's tax residency. For more on the local tax system, you can explore our guide on Cyprus Corporate Tax.
Frequently Asked Questions (FAQ)
1. What is the main law governing companies in Cyprus?
The main law governing companies in Cyprus is the Companies Law, Cap. 113. This law is based on the UK's Companies Act of 1948 and has been amended over the years to be fully compliant with the European Union's directives. The law provides a clear and comprehensive framework for all aspects of a company's life, from its formation and administration to its dissolution. You can find more information in our FAQ Guides section.
2. What is the difference between a private and a public company?
A private company is a company that is not listed on a stock exchange and cannot offer its shares to the public. A public company, on the other hand, is a company that is listed on a stock exchange and can offer its shares to the public. The majority of companies registered in Cyprus are private companies. You can find more information in our Cyprus Holding Company guide.
3. Who is responsible for corporate compliance?
The directors and the company secretary are responsible for corporate compliance. They are responsible for ensuring that the company's records are well-maintained, that all the necessary documents are filed with the Registrar of Companies, and that the company complies with all the local laws and regulations. It is always best to work with a professional to ensure a smooth and efficient process. You can find a professional to help with this in our directory of Professional Corporate Services.
4. Is there a minimum share capital requirement?
No, there is no minimum share capital requirement in Cyprus. However, a symbolic amount of €1,000 is often used. The share capital can be paid in cash or in kind, and it must be paid within a reasonable time after the company is registered. The amount of share capital can be increased at a later stage if needed. For more information, you can explore our business directory of all businesses.
5. Can a foreigner be a director of a Cypriot company?
Yes, a foreigner can be a director of a Cypriot company. However, it is highly recommended to appoint a local resident as a director to ensure that the company is managed and controlled from the island, which is important for tax residency. The director is a key figure in the company's governance and is responsible for making all the key decisions. You can read our guide on Cyprus Company Formation Requirements for Foreigners.
6. What are the main annual compliance obligations?
The main annual compliance obligations for a Cyprus company are filing the company's annual financial statements with the Registrar of Companies, paying the annual levy fee of €350, and filing the annual tax return with the Cyprus Tax Department. These are crucial steps for ensuring that your company is legally compliant. You can also explore our guide on Costs to Set Up a Limited Company in Cyprus in our guide.
7. What is the role of the Registrar of Companies?
The Registrar of Companies is a government body that is responsible for the registration and administration of all companies in Cyprus. The Registrar is responsible for approving company names, issuing certificates of incorporation, and maintaining a public register of all companies. It is a very important part of the legal framework and is a crucial part of the company's legal identity. You can also get more help on choosing a company name in our guide.
8. What is a company secretary's role?
The company secretary is a crucial part of the corporate structure. The secretary is responsible for a number of legal and administrative duties, such as maintaining all the company's official records, filing all the necessary documents with the Registrar of Companies, and providing legal and administrative advice to the board of directors. The secretary is a key figure in ensuring legal compliance and corporate governance. You can read our guide on Understanding the Role of a Company Secretary in Cyprus for a deeper dive.
9. Can a company's director also be the company secretary?
Yes, a company's director can also be the company secretary, but this is not recommended. The roles of a director and a company secretary are distinct, and a person who holds both positions may have a conflict of interest. It is always best to appoint a separate person for each role to ensure a clear separation of duties and a better corporate governance. Our guide on Avoiding Double Taxation with a Cyprus Holding Company provides more detail.
10. How are company disputes resolved?
Company disputes in Cyprus are resolved through the court system, which is based on British Common Law. The law provides a number of protections for both directors and shareholders and a clear legal framework for resolving disputes. It is always best to work with a lawyer to ensure that your rights are protected and that the dispute is resolved in a fair and transparent way. For more on the local business environment, you can read our guide on Intellectual Property (IP) Box Regime in Cyprus.
