The tightening of Cypriot legislation in relation to companies – pacifiers

At the end of 2018, the Central Bank of Cyprus issued a new resolution containing the modified definitions of shell firms. Circular entered into force immediately.

New definitions of shell firms

This term designates limited liability companies and other legal entities that meet the following criteria:

• The company is physically absent in the country in which it is registered (there is only a zip code), and also does not perform any operations at the place of registration. Important! If the actual management or management assets are missing, this can also be regarded as a physical absence. If the company has a third party that represents services of a nominal nature (for example, a company secretary), then this is still not the basis of the physical presence of the company.
• The company has no economic activity in the territory of the country in which it is registered (or there are no documents proving the opposite fact).

The updated circular also contains a large number of exceptions, which are the basis for withdrawing a company from the “shell” category. For more advice on this matter, please contact us at the contacts listed on the site.