Table of Contents
What is a representative office?
| Quick Facts | |
|---|---|
| What is a representative office? | A representative office (also known as a liaison office) is a non-commercial office that is established by a foreign company to promote the business of its parent company. |
|
Purpose |
To facilitate the parent company’s marketing, advertising, research, and communication activities. |
|
Legal status of a representative office in Cyprus |
Non-legal entity |
| Approval | A representative office must obtain approval from the Ministry of Energy, Commerce, and Industry before establishment. |
| Submissions |
Required documents include a copy of the parent company’s certificate of incorporation, financial statements, proof of funds, and a detailed description of the activities the liaison office will conduct in Cyprus. |
| Decision-making |
Parent company |
| Activities |
Limited: a liaison office can only engage in non-commercial activities such as marketing, advertising, research, promotion, and gathering market intelligence. |
| Audit |
Not required, unless the representative office has a specific taxable income or other obligations in this matter. |
| Land acquisition |
Representative offices are not legally permitted to acquire land. |
| Compliance required for a representative office (Yes/No) | Yes, representative offices must comply with Cypriot regulations including tax filings, company registration, and other local legal requirements. |
| Funding |
From the parent company |
| Eligibility |
Foreign companies: only foreign companies with an established presence abroad can open a representative office. |
| Additional representative office application |
The application process for setting up a representative office requires submitting a detailed business plan to the Ministry of Energy, Commerce, and Industry for approval. |
| Contracts |
A representative office cannot sign or enter into contracts. |
| Legal assistance | You can rely on our specialized agents in order to open a representative office in Cyprus. |
Functions of a representative office in Cyprus
Cyprus provides a stable economic environment, in which many fields have developed at a fast pace. In 2016, many industries, such as tourism of financial services, registered very good results and businessmen who want to establish a business presence on the local market can register a representative office, which can be of use on a long term.
A representative office in Cyprus is an entity entirely different from a Cypriot branch or subsidiary. And that is because it is not independent of the parent-company and it carries some important limitations, such as the fact that it cannot trade goods or offer services.
The only function of a representative office in this country is to intermediate business relationships between the parent-company and its clients in Cyprus. Therefore, this type of business entity is mainly utilized for marketing services. Our laywers in Cyprus can provide further information related to this subject.
Registration procedure of a representative office in Cyprus
In order to register a representative office, the registration procedure is similar to that of other European jurisdictions. The main steps of this procedure are:
- Obtaining a special license;
- Register as a tax payer;
- Subscribe to all the relevant government agencies;
- Gather the relevant documentation.
Documentation requirements to open a representative office in Cyprus
Businessmen interested in opening a representative office in Cyprus should consider preparing the following documentation:
- a standard application;
- legalized copies of the articles of incorporation and certificate of incorporation;
- legalized letter of the representative office chief;
- memorandum of association;
- proof of payment of the registration fee.
The above-mentioned documents can be rejected in case they are not complete, if they contain false information or in case the activities of the representative office in Cyprus do not comply with the local legislation. Our lawyers in Cyprus may provide further details regarding this matter.
The video below presents more details on the representative office in Cyprus:
Activities of Cypriot representative office
Although the office will not have any commercial activities, it will be necessary to register it with the relevant authorities, including for taxation purposes.
However, it is important to know that the liaison office will not require a minimum share capital, as it is the case for the legal entities available in Cyprus.
A representative office can perform the following activities:
- market research;
- market survey;
- collecting information on the characteristics of the local market;
- establish business relationships with other company set up in Cyprus.
Accounting obligations for representative offices in Cyprus
A representative office situated in Cyprus is mandated to submit the annual financial accounts of the foreign company to the Registrar of Companies. This submission must accompany a certified translation into Greek to ensure compliance with local regulations. It is important to note that there are specific exemptions set forth for overseas companies that originate from other EU member states, as dictated by various EU directives.
For those companies that qualify for these exemptions, it is essential that they provide the Registrar with a formal certificate. This certificate must be duly signed by both a director and the company secretary, affirming the company’s exempt status. Additionally, the company must include a statement from the relevant authority in Cyprus, further confirming the exemption. This process ensures that all regulatory requirements are met while facilitating the operation of foreign companies in Cyprus.
Get support from our attorneys in Cyprus regarding the accounting details in the matter of representative offices in Cyprus.
Tax obligations for representative offices in Cyprus
A representative or liaison office based in Cyprus is required to complete the process of registering for tax purposes within the country. Despite this necessary registration, it is important to note that these offices typically do not generate any income. Consequently, this means that while the office must comply with the tax registration requirements, it will not incur any actual tax liabilities.
For more information and support regarding the establishment of a representative office, our law firm in Cyprus is at your disposal with any assistance required.
Business data in Cyprus
As Cyprus has a flourishing economy due to its touristic and industrial potential, there are some impressive official numbers regarding small and medium businesses:
- In 2022, there was a total of 59,706 SMEs (small and medium-sized enterprises) registered in Cyprus;
- Out of these, 55,297 businesses were micro-sized enterprises;
- Additionally, there were approximatively 3,856 small businesses registered in Cyprus in 2022.
Besides the services regarding opening a representative office in this country and business-related matters, our law firm in Cyprus is specialized in a variety of other services that can be of interest. For example, if you are looking for information and assistance regarding marriage in Cyprus and the legal requirements on the subject, you can rely on our attorneys. More than that, we can offer specialized guidance in the matter of buying property in Cyprus and other investment affairs.
Businessmen interested in receiving more details on how to register a representative office in Cyprus can address to our Cypriot law firm for legal representation.