Company registrations in the first nine months of 2009 are down 42% year-on-year at 11,342 compared to 19,563 registrations in the same period in 2008, but the pace of decline in September was the lowest since the beginning of the year, giving rise to optimism that the situation may be stabilising.
Registrar of Companies Spyros Kokkinos told the Financial Mirror that the situation is now stabilising and hopefully the number of registrations will pick up in the last quarter of 2009.
“There was no doubt that the number of registrations could not remain at the same level as in the record years of 2008 and 2007, but we are now more than ready to meet any increased demand,” Kokkinos told the Financial Mirror.
On a monthly basis, there were 1454 company registrations in September, which although down 27% from 1983 registrations in September 2008 and 2527 in September 2007, is the second highest monthly figure so far this year, while the annual pace of decline is also the lowest so far this year.
Company registrations are seen as one of the best indicators as to how successful Cyprus is in attracting foreign companies and investors, which not only boost state coffers, but also result in fee income for lawyers, auditors and other professionals.
On average, a Cyprus company costs EUR 2000 to register provided the nominal share capital is kept at EUR 1000, with the fees climbing pro-rata according to the capital. Only lawyers are allowed to register companies in Cyprus.
CAPITAL STILL IN CYP
Public companies that did not notify the Registrar of Companies with a board resolution changing their capital from Cyprus pounds to euros following Cyprus’ adoption of the common European currency on January 1, 2008 continue to remain stuck and are not able to function properly.
A number of public companies that did not change their capital by the deadline of end-2008 are not able to make any changes to their Memorandum and Articles of Association, or change directors and other necessary alterations, which essentially means they are not able to function as a legal entity.
In comments made to the Financial Mirror, Kokkinos confirmed the dire situation of all affected public companies and said he hoped that as a result of efforts underway by the Cyprus Bar Association and the House of Representatives, an amendment to the law may be possible allowing the Registrar of Companies to extend the deadline for the affected companies until the relevant board and shareholder resolutions are tabled.
Private companies are not affected since on the Registrar’s initiative, an amendment was passed allowing for the automatic shift of the capital from CYP to EUR.
“We managed to push the amendment to the law for private companies in 16 days, which is why I’m confident that the House will soon find a solution to the problem facing all those public companies that did not change their capital,” said Kokkinos.
