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HOME  /  PUBLICATIONS  /  COMPANIES OFFERING ADMINISTRATIVE SERVICES IN CYPRUS REQUIRE AUTHORISATION.

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Companies offering administrative services in Cyprus require authorisation.

Cyprus registered companies offering administrative services to other Cypriot registered companies need to be authorised by the Cyprus Securities and Exchange Commission (hereinafter called the ‘Commission’).
 
The relevant law is the Law regulating companies providing administrative services and related matters of 2012, as amended (the 'Law').  The Law applies to persons providing administrative services to or from the Republic.  Such persons are obliged by Law to submit an application for authorisation from the Commission.  In such a case, these persons are regulated by the Commission and are obliged to abide by the provisions of the Law.
 
According to Section 4 of the Law, the term ‘administrative services’ include the following services:
 
(a) The management or administration of trusts including, without limitation, wherever these are set up or established, or the management or investment or marketing of the assets of a trust.
 
(b) The undertaking or provision of the service of managing companies, including, but not limited, to the management or the administration of companies, general or limited partnerships, or other organizations and the provision of the following services:
 
(i) providing directors for legal persons;
(ii) providing a secretary, or assistant secretary of legal persons;
(iii) holding the share capital of legal persons and registering the holder in the respective registers of shareholders on behalf of third persons;
(iv) provision of registered office address and or the official mailing address and or electronic address of companies;
(v) provision of general or limited partners in partnerships;
(vi) provision of other similar services, or in conjunction with the services described above, in relation to other legal persons or organisations, with or without separate legal personality;
(vii) opening or managing bank accounts;
(viii) safekeeping of financial instruments on behalf of clients.
 
The Law provides for a number of exemptions; the so called ‘exempted persons’.  According to Section 3(2) of the Law, an ‘exempted person’ is a person exempted from the scope of application of the Law and thus not bound to obtain the necessary authorization from the Commission when providing administrative services.  According to Section 2 of the Law, an ‘exempted person’ is either of the following:
 
(a)
(i) a lawyer and or a limited liability company providing legal services, as defined in the Advocates Law,
(ii) a general partnership or limited partnership whose general partners are lawyers or a limited liability company providing legal services and
(iii) a subsidiary company, owned directly or indirectly, by any of the above,
 
which is regulated by the Board of the Cyprus Bar Association in its capacity as Competent Authority in the framework of the Prevention and Suppression of Money Laundering and Terrorist Financing Law.
 
(b)
(i) a member of the Institute of Certified Public Accountants of Cyprus (ICPAC),
(ii) a general or limited partnership or a limited liability company whose majority of general partners and directors are members of ICPAC, and
(iii) a subsidiary company, owned directly or indirectly, by any of the above,
 
which is regulated by the Board of ICPAC in its capacity as Competent Authority in the framework of the Prevention and Suppression of Money Laundering and Terrorist Financing Law.
 
There are further exceptions to the obligation to obtain the authorisation of the Commission before providing administrative services.
 
According to Section 4 of the Law, the provision of administrative services by natural persons in some cases does not require any authorisation provided that these services will not be advertised or used to attract clients nor offered or provided to persons other than the ones mentioned below:
 
(A) undertaking director duties in a company whose securities are admitted to trading on a regulated market or in a company which is regulated by a Competent Authority or in a company where the Republic of Cyprus or any public body holds the majority of its shares
 
(B) undertaking director or secretary duties in cases where
 
(i) a company is rightfully owned by at least 25%-
 
     (a) by the person providing the relevant services and/or members of his family up to forth degree of relation or
    (b) by a company or companies wholly owned by the person providing the relevant services and/or members of his family up to forth degree of relation or
   (c) by a trust, where, either the person providing the relevant services and/or any person with whom the person providing the relevant services and/or his spouse has a family relationship up to forth degree of relation, are the sole beneficiaries;
 
(ii) a company is the sole employer of the person providing the services or a company which is a member of a group of companies where the employer is also a member.
 
(C)  undertaking director duties in a company which is a subsidiary of a company described in sub-paragraphs (B) (i) (a) & (b) above.
 
(D) undertaking director duties in less than 10 companies not counting companies referred to in sub-paragraphs (A), (B)(i)(a)(b)(c) and (ii) and (C) above and provided that the relevant person or persons do not jointly control the board of Directors of the relevant company.
 
For more information and/or advice on whether a Cyprus registered company offering administration services needs to submit an application for such an authorisation to the Commission and other related services, please contact us for an opinion at info@pirilides.com.