The Companies Law (Cap.113) has recently been amended to provide for the imposition of administrative fines for the late submission of the Company’s Annual Return (HE32).

According to the Companies Law (Cap.113), a Cyprus Company has an obligation to:

• Prepare audited financial statements on an annual basis;
• Convene an annual general meeting (AGM) within the prescribed timeframe (18 months from the company’s incorporation and every 15 months thereafter) for approval, among others, of the Company’s financial statements;
• Submit an annual return (HE32) to the Registrar of Companies along with the audited financial statements of the previous year.

Based on the latest legislative changes applicable as from 18 December 2019, an increase in administrative fines for late submission of a Company’s annual return is imposed, as follows:

• €50 one-off, plus
• €1 for each overdue day during the first 6 months,
• €2 for each day after the first 6 months with a maximum fine of €500.

It is important for all companies to have up-to-date audited financial statements to be filed together with the annual return in order to avoid penalties. It should also be reminded that it is good practice for AGMs to take place in Cyprus ensuring attendance of all interested parties.

The above provisions are in line in line with Cyprus’ commitment for transparency and economic substance regarding Cyprus registered companies.