On 19.07.2013, in the Official Gazette of the Republic of Cyprus, the Amending Law on Registration of Doctors of 2013 (Law 73(I)/2013) (the “Amending Law”) was issued, allowing doctors to provide medical services through the establishment and operation of limited liability companies.
Based on the Amending Law the establishment/registration of a “Medical Company” is available for all licensed Cyprus registered practicing doctors. The main provisions of the Amending Law are the following:
• Type of company
A Medical Company can have the form of a private limited liability company, general partnership or limited partnership.
• Company name
The company name of a Medical Company should consist solely of the name or names of one or more doctors who exercise or have exercised their profession. Additionally, in case of a limited company, the name is registered with the acronym “I.E.P.E.” (Medical Limited Liability Company- M.C.L.L), instead of the word “Limited”, as is the case with the usual limited liability companies which are written under of the Companies Law and if the name is written in English-Latin characters will be followed with the acronym «DLC» (Doctors Limited Company). The Law clarifies that such a company may use its name in either Latin or Greek characters, regardless of the manner in which it is registered.
• Registration of a medical company
Notwithstanding the provisions of the Companies Law, to allow for the registration of a Medical Company with the Registrar of Companies, the prior approval by the Cyprus Medical Council is required. Subsequently, and after the registration of the Medical Company with the Registrar of Companies, a special record/register will also be kept by the Medical Council which will include all companies belonging to doctors.
• Shareholders of a Medical Company
All shareholders and members of the board of directors must be doctors, registered in accordance with the provisions of the Law on Medical Registration. The obligation to secure an approval of the Medical Council extends to the case of acquisition of shares by third parties, after its establishment.
• Advantages of M.C.L.L Registration
It is worth noting that there is a tax advantage and a legal advantage for the incorporation of an M.C.L.L. The corporate tax rate of 12,5% applies to such companies.
Legal Advantage: the liability of the members is limited
The main legal advantages for the incorporation of an M.C.L.L., as in any case of a limited liability company, is of course the limitation of the liability of its members, to the amount of the contribution of each member to the share capital of the company.
In essence, the above amended legal framework for the provision of medical services in Cyprus aims to safeguard the professional and business interests of the medical industry without, however, losing or weakening the traditional perception of social responsibility.