Since 1975 non-residents have established more than 2.400 companies for the investment of capital locally, over 38.000 companies for the management of overseas affairs and more than 11.800 companies for the registration of ships under the Cypriotflag. As a reflection of the importance the authorities place on developing the island as an international business centre, simple administrative procedures have been implemented in order to expedite matters concerning foreign entrepreneurs. THE CENTRAL BANK'S ROLE The Central Bank is responsible for issuing permits to non-residents wishing to acquire equity in legal entities registered in Cyprus. It is also responsible for promoting and co-ordinating most matters concerning direct investment, international business and ship ownership. The Central Bank co--operates closely with government departments and private parties with a view to improving facilities, incentives, requirements and procedures so that Cyprus will become an even more attractive centre for the conduct of international business affairs. OBTAINING A PERMIT Non-residents wishing to acquire any share or participation in a Cypriot legal entity should apply through a lawyer or an accountant practising in Cyprus. The professional will submit to the Central Bank an application containing the requisite information ie share capital, economic activities, etc. Applications are classified into one of 3 categories : Direct Investment covering Cypriot legal entities which may belong partly or wholly to non-residents and which may carry on business and derive income within Cyprus International Business covering Cypriot legal entities which belong entirely to non-residents and which carry on business and derive income exclusively outside Cyprus Ship Ownership covering Cypriot legal entities which may belong entirely to non-residents and which limit their objects to the ownership, bareboat chartering and operation of ships in international transport. Permits concerning international business and shipping companies are normally issued by the Central Bank within a few days, depending on the availability of the requisite information or assurances. This speedy response is due to the consensus that international business and shipping companies make a positive net contribution to the economy. Applications concerning direct investments are considered by the Central Bank in consultation with appropriate governments departments. Normally, the administrative procedure is completed within a few days and the applicant receives an official reply. However, in cases where the procedure cannot be completed within 30 day, the applicant is notified accordingly. Upon receipt of the necessary permit, the non-residents shares or participation must be registered in their names or in the names of their nominees at the Department of the Registrar of Companies under the case may be. These laws are based on corresponding United Kingdom legislation. Matters relating to the registration of ships are handled by the Department of Merchant Shipping as explained in Chapter V of this booklet. Legal procedures pertaining to the registration, re-organisation and liquidation of business entities must be completed through advocates practising on the island. At the same time, business entities with non-resident participation are required to prepare and submit to the Central Bank and the Department of Inland Revenue annual financial statements audited by local practising accountants. Applications by foreigners wishing to live or work in Cyprus are handled by the Ministry of Interior and the Ministry of Labour. In the case of international business companies, arrangements have been made whereby the Ministry of Interior may issue and renew the temporary residence-employment permits of expatriate executives upon the recommendation of the Central Bank, while it retains ultimate authority over all such permits. EXCHANGE CONTROL. The Exchange Control Law makes a distinction between residents and non-residents. The residential status of natural persons is normally determined by reference to the place where they live and work and that of legal entities by reference to the place where they are incorporated or activated. Only residents are subject to some exchange controls on capital transfers. All current payments are transferable abroad up to any amount without restriction. Most of these payments are handled by commercial banks in accordance with powers delegated to them by the Central Bank whilst capital transfers need to be referred to the Central Bank for approval. Thus, non-residents may hold and manage assets and liabilities in any foreign currency and in any foreign country, including freely convertible and transferable balances with banks on the island. Cypriot legal entities, which belong partly or wholly to non-residents and which carry on business or derive income within the island, are considered as resident for exchange control purposes. On the other hand, legal entities which belong exclusively to non-residents and which carry on business and derive income exclusively outside the island, are exempt from exchange controls. All persons who are not permanent residents of Cyprus are also exempt from controls.
Since 1975 non-residents have established more than 2.400 companies for the investment of capital locally, over 38.000 companies for the management of overseas affairs and more than 11.800 companies for the registration of ships under the Cypriotflag. As a reflection of the importance the authorities place on developing the island as an international business centre, simple administrative procedures have been implemented in order to expedite matters concerning foreign entrepreneurs.
THE CENTRAL BANK'S ROLE
The Central Bank is responsible for issuing permits to non-residents wishing to acquire equity in legal entities registered in Cyprus. It is also responsible for promoting and co-ordinating most matters concerning direct investment, international business and ship ownership. The Central Bank co--operates closely with government departments and private parties with a view to improving facilities, incentives, requirements and procedures so that Cyprus will become an even more attractive centre for the conduct of international business affairs.
OBTAINING A PERMIT
Non-residents wishing to acquire any share or participation in a Cypriot legal entity should apply through a lawyer or an accountant practising in Cyprus. The professional will submit to the Central Bank an application containing the requisite information ie share capital, economic activities, etc. Applications are classified into one of 3 categories :
Permits concerning international business and shipping companies are normally issued by the Central Bank within a few days, depending on the availability of the requisite information or assurances. This speedy response is due to the consensus that international business and shipping companies make a positive net contribution to the economy.
Applications concerning direct investments are considered by the Central Bank in consultation with appropriate governments departments. Normally, the administrative procedure is completed within a few days and the applicant receives an official reply. However, in cases where the procedure cannot be completed within 30 day, the applicant is notified accordingly.
Upon receipt of the necessary permit, the non-residents shares or participation must be registered in their names or in the names of their nominees at the Department of the Registrar of Companies under the case may be. These laws are based on corresponding United Kingdom legislation. Matters relating to the registration of ships are handled by the Department of Merchant Shipping as explained in Chapter V of this booklet.
Legal procedures pertaining to the registration, re-organisation and liquidation of business entities must be completed through advocates practising on the island.
At the same time, business entities with non-resident participation are required to prepare and submit to the Central Bank and the Department of Inland Revenue annual financial statements audited by local practising accountants.
Applications by foreigners wishing to live or work in Cyprus are handled by the Ministry of Interior and the Ministry of Labour. In the case of international business companies, arrangements have been made whereby the Ministry of Interior may issue and renew the temporary residence-employment permits of expatriate executives upon the recommendation of the Central Bank, while it retains ultimate authority over all such permits.
EXCHANGE CONTROL.
The Exchange Control Law makes a distinction between residents and non-residents. The residential status of natural persons is normally determined by reference to the place where they live and work and that of legal entities by reference to the place where they are incorporated or activated. Only residents are subject to some exchange controls on capital transfers. All current payments are transferable abroad up to any amount without restriction. Most of these payments are handled by commercial banks in accordance with powers delegated to them by the Central Bank whilst capital transfers need to be referred to the Central Bank for approval. Thus, non-residents may hold and manage assets and liabilities in any foreign currency and in any foreign country, including freely convertible and transferable balances with banks on the island.
Cypriot legal entities, which belong partly or wholly to non-residents and which carry on business or derive income within the island, are considered as resident for exchange control purposes. On the other hand, legal entities which belong exclusively to non-residents and which carry on business and derive income exclusively outside the island, are exempt from exchange controls. All persons who are not permanent residents of Cyprus are also exempt from controls.