The shareholders of a company
located in Cyprus
are entitled to receive dividends
for their contribution to the business’ capital. Dividends
refer to a portion of the company’s profits
, which are established in accordance with the decisions of the company’s board of directors
and they can be provided to the shareholders
as cash, stocks or other types of assets. Our team of Cypriot lawyers
can offer assistance on the manner in which the dividends
are distributed to the company’s founders
. It is important to know that dividends in Cyprus
are not imposed with a tax on income.
Dividend regulations in Cyprus
Dividends in Cyprus
are required to be distributed to the company’s shareholders
only from the profits
incurred by the respective business. They can’t be paid from the company’s capital
The board of directors
can decide the way in which the dividends
are paid to the shareholders
. Thus, such payments can be completed as follows:
• final dividends;
• interim dividends.
The interim dividends
refer to a payment which is concluded prior to the company’s annual general meeting
and prior to filing the financial statements. The final dividends
are paid only after the company has concluded the audit on the financial statements
As a general rule, the above mentioned regulations are prescribed in the company’s articles of association
and our Cypriot law firm
can offer advice on the most suitable option a company should choose.
Rules related to final dividends in Cyprus
When choosing to pay final dividends, the representatives of the company should perform several compulsory steps.
First of all the financial statements (after the audit was completed) must reveal that the company provides sufficient profits which will enable the board of directors to distribute the respective dividends.
Further on, during the annual general meeting
, the board of directors
should present a declaration of dividends
, which should not exceed a certain value expressed in the articles of association