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Directors in Cyprus

Directors in Cyprus

A director refers to an individual who serves on the board of directors of a corporation. Directors in Cyprus are elected by shareholders, representing interests and overseeing company management. Corporate directors have a vital responsibility in formulating strategic choices, establishing company policies, and guaranteeing the company’s operations prioritize the well-being of its shareholders. They typically have a fiduciary duty to act in the company’s best interests and are responsible for approving major corporate decisions, such as mergers and acquisitions, financial policies, and the selection of top executives.

The composition of a board of directors can vary, and directors may have diverse backgrounds, including business leaders, industry experts, and individuals with financial or legal expertise. The board, collectively, is accountable for the company’s overall governance and performance. If you are specifically interested in learning about directors in Cyprus, we can assist you with information. Please get in touch with our lawyers in Cyprus for legal services. 

Company directors in Cyprus

According to Cypriot Commercial Law, all private companies are required to have at least one director and all public companies are required to have at least two directors. The Companies Law also stipulates the duties of directors in Cypriot companies. These duties are:

  • the fiduciary duty;
  • statutory duties;
  • the duty to exercise one’s function with skill and care.

According to the legislation a company may have executive, non-executive, or nominee directors in Cyprus.

What are the fiduciary duties of Cypriot directors?

The most important fiduciary duty of a Cypriot company director is to act in the best interest of the company and of the shareholders. The fiduciary duty refers to loyalty towards the company and its shareholders, to comply with the legislation and the company’s articles of association. The fiduciary duties of Cypriot companies’ directors also consist of not disclosing any confidential information and not using any confidential information for personal gains.  Below you can find the list of fiduciary services of directors in Cyprus:

  • Duty of care:

   – Directors in Cyprus must exercise reasonable care, diligence, and skill in making decisions on behalf of the company;

   – They should stay informed about the company’s affairs and actively participate in decision-making processes. If you want to know more about the other duties of a director in Cyprus, we can help you. Please consult with our Cypriot lawyers for detailed information in this regard. 

  • Duty of obedience:

   – Directors in Cyprus are obligated to ensure that the company operates within the bounds of the law and its governing documents;

   – Directors are required to comply with the company’s bylaws and applicable laws and regulations in Cyprus. It is always difficult to comply with ever-changing legal regulations. So, you can trust the experienced lawyers at our law firm in Cyprus. They will keep you updated regarding any amendments to the corporate law. 

  • Duty to act in good faith:

   – Cypriot directors must act honestly and in good faith in the best interests of the company;

   – They should avoid taking actions that could harm the company or its shareholders intentionally. If you are seeking help to save your company from any harm, get in touch with our attorneys in Cyprus.

  • Duty to exercise independent judgment:

   – Directors in Cyprus should exercise their independent judgment rather than being unduly influenced by other directors, officers, or external parties;

   – They are required to make decisions based on what they believe is best for the company.

  • Duty to preserve corporate opportunities:

   – Cypriot Directors should not exploit for their personal gain opportunities that could benefit the company;

   – If a corporate opportunity is presented, directors should first offer it to the company.

These fiduciary duties collectively establish a framework for responsible and ethical decision-making by corporate directors. It’s crucial to recognize that the legal understanding of these responsibilities may differ, so directors in Cyprus should seek legal advice to understand the specific obligations in their jurisdiction and industry. For any legal advice, you are welcome to get help from our Cypriot law firm.

The statutory duties of directors in Cyprus

Apart from the fiduciary duties, company directors also have statutory duties which are comprised in the Companies Act, the Cypriot Income Tax Actand the Customs and Excise legal frameworks. Among the Cypriot director’s statutory duties are:

  • represent the company in relation to third parties;
  • to disclose information about him or herself with the Cypriot Companies Register;
  • to prepare the annual financial accounts;
  • to declare any direct or indirect interest in a proposed or existing transaction or arrangement with the company;
  • to disclose any information relevant to the company that would enable proper assessment of its financial position and performance;
  • to foster the company’s success for the overall benefit of its members, having regard to factors such as the long-term consequences, employee interests, and relationships with suppliers, customers, and others;
  • to carry out their duties personally and not delegate responsibilities unless authorized by the company’s articles of association or a resolution of the board;
  • to avoid situations where their interests conflict with the interests of the company.

The Cypriot company’s director must keep the financial records open for inspections for at least half a year from their issuance. These duties are designed to ensure that directors act responsibly, transparently, and in the best interests of the company and its stakeholders. Directors in Cyprus need to stay informed about any changes in the legal framework.

Besides offering you corporate information, our lawyers can also assist you if you are interested in learning about the legal regulation of marriage in Cyprus. For instance: you can consult our lawyers if you need marriage registration. 

Non-executive directors in Cyprus

Companies in Cyprus are allowed to appoint non-executive directors. Non-executive directors are independent individuals with no relation to the company. The Cypriot non-executive director must be independent and must exercise an unbiased judgment. The legislation also provisions that a non-executive director should have not been an executive director for the company in the past twelve months and should have not been an employee of the Cypriot company in the last five years.

Salaries in Cyprus

The salary comparison for an executive director position in Cyprus, based on years of experience, for instance:

  • Employees with 0-2 years of experience earn a base salary of 2,870 EUR;
  • As one gains more experience, the salary sees a notable increase. With 2-5 years of experience, there is a 26% boost, resulting in a salary of 3,630 EUR;
  • The trend continues with a 32% increase for those with 5-10 years of experience, reaching a salary of 4,780 EUR.

This data illustrates a clear correlation between years of experience and salary, showcasing the impact of professional tenure on executive compensation in Cyprus. For complete information about the role of the company’s directors and his/her salary, you may also contact our law firm in Cyprus.

Moreover, if you are interested in buying a property in Cyprus, our lawyers are here to assist you.