CYPRUS Law and Practice Contributed by: Alexis Erotocritou, Dafni Loizou and Georgia Demou, A.G. Erotocritou LLC
Non-Profit Company Limited by Guarantee • These companies are incorporated and regulated under the Cyprus Companies Law. • They do not have shareholders but the members guarantee a nominal amount if the company is wound up. • These companies are very often used by larger charities, NGOs, educational organisations, and research institutes and, in general, when looking to establish a professional NGO which will be seeking grants. Trust • A trust can be established for charitable purposes. • The trustees will hold and manage assets for the benefit of the charitable purpose. Trusts are ordi - narily used for the management of endowments, family philanthropy, or specific charitable funds rather than operating public programmes.
• The income of a company established exclusively for the promotion of art, science, or sport, which does not involve the earning of profits by the company or its members and whose activities are restricted solely to that purpose, is exempt from income tax (subject to conditions). 10.2 Common Charitable Structures Common Charitable Structures in Cyprus include the following forms, and their relevance/usefulness depends on the size of the charity’s activities and the nature of the activities. Association • This is a membership-based, non-profit organisa - tions and it is usually more relevant where a large number of members is involved. • It is best suited for community organisations, sports clubs, cultural groups, advocacy organisa - tions, and volunteer groups. Foundation • Foundations are most suitable toa specific chari - table or public-benefit purpose (scholarships, edu - cational, religious, medical or other philanthropic purposes). • They are typically funded by an endowment or donated assets and do not ordinarily have mem- bers.
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