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Other Types of Cyprus Companies

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Apart from the limited Company, commonly, incorporated in Cyprus, the Partnerships, the Branch of an overseas Company, ICIS, UCITS, CIFs and now SEs are forms of business vehicles.


I. International Business Partnership

A Partnership is based on an agreement between two or more natural or legal persons to carry on a business in common with the view to profit. Partnerships are registered in Cyprus under the Partnerships and Business Names Law which is also based on English Law.

There are two types of Partnerships:

General Partnership in which every partner is jointly and severally liable with the other partners (without limitation) for all debts and obligations of the partnership. After a partner’s death his estate is also severally liable for such debts and obligations in the due course of an administration, insofar as they remain unsatisfied subject to the prior payment of his separate debts.

Limited Partnership in which there is at least one general partner liable (without limitation) for all debts and obligations of the partnership and one or more limited partners who are not liable beyond the fixed amount that they have contributed to the partnership. A limited partner may neither take part in the management of the partnership nor bind it.

For the registration of a partnership, a prescribed form is submitted to the Registrar of Partnerships containing the name, address, nationality, profession of each partner, the name, object and duration of the partnership and the partners’ authority to bind the partnership.


II. International Business Branches
Companies incorporated outside the Republic of Cyprus (Overseas Companies) may register a branch in Cyprus under section 347 of the Companies Law. This does not amount to the creation of a new legal entity in Cyprus; the entity incorporated abroad simply has a branch in Cyprus and may operate through it for its international activities.

Overseas Companies may establish a branch in Cyprus by filing with the Registrar the following documents translated into Greek :

• a certified copy of the overseas corporation’s charter, statutes or memorandum and articles of association or other instrument containing or defining its constitution;

• particulars of any directors and secretary of the corporation;

• the names and addresses of one or more persons resident in Cyprus authorised to accept on behalf of the corporation any notice required to be served on it.

Any changes to the above particulars should be notified to the Registrar of Companies.

The overseas corporation’s charter should be certified by :
• a public notary or governmental official in whose custody the original is committed, or

• an officer of the company before a person having authority to administer an oath.

The certificates of the above persons should be authenticated by a diplomatic or consular representative of the Republic of Cyprus.

Upon registration of the branch, its management should be provided with a full set of documents, properly legalised and translated into English or any other language. Such documents normally comprise of:

• the certificate of registration
• the charter of the overseas corporation or other instrument defining its constitution
• a list of directors and name of the person authorized to accept notices
• letterheadings, invoices and other branch stationery
• any other information and documentation pertaining to the branch’s activities up to the date of its establishment.



III. International Collective Investment Schemes (ICIS)
Cyprus introduced in May 1999, a legislation enabling the establishment and regulation of International Collective Investment Schemes ("ICIS").

The International Collective Investment Schemes Law has established the required legal framework for the establishment, regulation of operations and supervision of ICIS. ICIS can be established and operated by non-residents. The object of such schemes is the collective investment of funds of unit holders. Unit holders may be other international collective investment schemes, Cyprus international business companies or individuals who are not residents of Cyprus.

Forms of Schemes
An ICIS can take the following legal forms:

• International fixed capital company
• International variable capital company
• International unit trust scheme, and
• International investment limited partnership

All the ICIS, must be approved as such by the Central Bank of Cyprus, which is the regulatory and supervisory body of the Schemes. The managers and the trustees whom the Scheme must appoint (unless the Central Bank of Cyprus gives its written approval for exemption), must also be approved.

The legislation includes, inter alia, provisions for appointment and removal of managers and trustees, the definition of the schemes (as a scheme marketed to the public, a scheme marketed solely to professional investors or a private international collective investment scheme), the method by which a scheme can have a limited duration (if required) and the method of repurchase of shares. In addition the legislation gives the Central Bank the authority to issue regulations by which the investment restrictions that the schemes have to adhere to, depending on their investment goals and policy, are set.

None of the managers, trustees, employees or any other person who has any information relating to the Scheme or the unit holders may disclose or use for own benefit any such information. Also, the Central Bank of Cyprus may not disclose any information unless required to do so by court order.


IV. Open – Ended Undertakings for Collective Investments in Transferable Securities (UCITS)
The Open –Ended Undertakings for Collective Investments in Transferable Securities Law 200(I)/2004 provides the legal framework for the registration, regulation and marketing of local and foreign funds in Cyprus.

Under this law, local UCITS may take the following legal forms:

• Mutual Funds or
• Variable Capital Investment companies

To set up and operate a Mutual Fund in Cyprus the permission of the Cyprus Securities and Exchange Commission (CySEC) is required. In summary, the application needs to fulfil the following criteria:

• Both the fund manager and the custodian (one must be independent of the other) of the mutual fund need to meet the criteria set out by the CySEC;
• Fund rules need to be approved by the CySEC;
The name and information memorandum of the fund needs to be approved by the CySEC
The minimum capital is EURO 1,700,000, which must be deposited within three months of the granting of the licence

For a Variable Capital Investment Company to be set up and operated the permission of the CySEC is required. As such the application needs to meet criteria similar to those required for a Mutual Fund and in addition:

• there are special rules to be implemented in the constitutional documents of the company
• custody of the assets is normally assigned to an approved custodian.
• the management of the assets is normally assigned to a CySEC licensed fund manager.

In case that foreign UCITS qualify under the EU Directive 85/611/EEC and which are based in another EU Member State and wish to market their units/shares in Cyprus need to apply to the CySEC for registration.

In this respect a written notification to the CySEC must be submitted by the foreign UCITS along with backing documents, such as attestation by the competent authority in the state of domicile, fund rules, latest prospectus and accounts etc.

Taxation: UCITS are subject to tax like any other entity as described above.


V. Cypriot Investment Firms (CIFs)
The Law which provides for the provision of investment services, the exercise of investment activities, the operation of Regulated Markets and other Related Matters (implementing MiFID) (Law 144(I)/2007) (the "Act") provides the legal framework for the provision of investment services ( including non core services) as well as for the registration, regulation of operations and supervision of CIFs.

Investment services include any of the following services:

• Reception and transmission, on behalf of investors, of orders
• Execution of such orders
• Dealing for own account.
• Managing of investment portfolios
• Underwriting

Non-core services include any of the following services:

• Safekeeping services
• Safe custody services.
• Granting of credits or loans to clients.
• Financial advice.
• Services connected to underwriting.
• Investment advice.
• Foreign-exchange services.

CIFs must be licensed by the CySEC, which is the relevant regulatory and supervisory authority. In this respect, a written application to the CySEC must be submitted and accompanied by a number of documents. Some key documents that should accompany the application include:

• business plan;
• Articles of Association.
• an excerpt of the criminal record, certificates of non-bankruptcy and resumes of the members of the Board of Directors, the executives and shareholders possessing a qualifying holding, as well as their answers to a questionnaire issued by CySEC.
• internal regulation (operations manual)
• organisational structure.
• description of the computer network and electronic infrastructure.
• draft regulation, for the prevention of the legalisation of the proceeds of criminal activities.

After the granting of the authorization, the CIF must comply with the ongoing obligations provided in the law and the relevant CySEC Directives.

In case that a banking institution (defined as such under the Banking Law) wishes to provide investment services in Cyprus then a relevant authorization is also granted by the Central Bank of Cyprus provided that the additional criteria laid by the Central Bank of Cyprus are fulfilled.


6. Formation of Societas Europaea ("SE")
A European Company (SE) is a public limited-liability company, which is governed by Community law directly applicable in all member states. Cyprus has recently implemented the EC Regulation for the Societas Europaea (SE) (European Company).
The SE is a European corporate form with significant potential benefits in terms of flexibility and cost. Cyprus corporate and taxation environment makes it an ideal base for SEs, and businesses in Europe.