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26 Feb 2024

Cyprus Government Announces Intention to Abolish Annual Levy for Registered Companies and Reduction of Penalties imposed due to late filing of Annual Returns Form

In a move aimed at bolstering the business environment and fostering economic expansion, the President of the Republic of Cyprus announced on the 21st of February 2024, the decision of the Council of Ministers to implement the necessary measures within 2024, in order to achieve the abolition of the mandatory annual levy of EUR 350 payable by all companies registered in Cyprus.

The obligation for Companies to pay the annual levy was introduced back in 2011, and failure to comply with this obligation imposed the risk for the Companies of being struck off the Register.

According to the announcement, within 2024, the government intends to implement the necessary mechanisms, through which the obligation for the payment of the Annual Levy will be abolished, aiming to provide relief to businesses and facilitate their growth trajectory. By lifting this financial burden associated with the annual levy, the Republic of Cyprus aims to create a more favourable climate for entrepreneurship and investment.

The decision comes amidst efforts to enhance Cyprus’s competitiveness on the global market and attract foreign investment. Eliminating the annual levy, demonstrates a proactive approach by the government to streamline administrative processes and reduce costs of business, thereby encouraging both local and international enterprises to establish and operate in Cyprus.

By prioritizing the interests of businesses, Cyprus reaffirms its position as a dynamic and forward-thinking hub for commerce and investment.

Our firm is monitoring the developments of the above stated initiative, while it awaits approval and implementation by the Parliament.

Furthermore, the Parliament has approved the proposed amendment of the Companies law, regarding to the reduction of the penalties for the late submission of the Annual Returns Forms for the Companies.

This amendment is implemented in cases where a Company omits for any reason, to timely submit their Annual Returns form, where until present, the penalties applicable would reach the maximum of EUR 500; with the implementation of this new amendment the penalties applicable will reach the maximum of EUR 150.

**This article is provided for informational purposes only and should not be construed as legal advice. Readers are encouraged to seek professional guidance regarding specific legal matters or concerns related to the abolition of the annual levy for registered companies in Cyprus.

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