How to set up an NGO in Cyprus.
How to set up an NGO in Cyprus.
What is a non governmental organization (NGO)
The term non governmental organization, in short NGO, is not defined anywhere, but it typically refers to a voluntary group or institution with a social mission, which operates independently from the government. Such entities are by nature, non profit.
What is the legal regime to register and operate an NGO in Cyprus?
In Cyprus there are 3 options to register an NGO.
The first 2 are regulated by the Clubs and Foundations Law ( Law (104(I)/2017) and they are the Club and the Foundation.
The third option is to register a non profit company under the Companies Law.
There are some differences between the three vehicles that are explained below.
Registration of a Club (Σωματείο) under the Clubs and Foundations Law [Law 104(I)/2017 ]
A Club needs at least 20 members to start with. These members will be members of the Club and members of the Board.
The Club is governed by the Law and its constitutional documents.
A Club serves public purposes and must not have a commercial or economic purpose.
It is also important to note that any movable or immovable property given before or after the formation of the Club belongs to the Club and not to the donors or members. In case of dissolution of the Club , the property is not distributed to the members.
A Club must have at least 20 members that sign the incorporation documents.
The management of the Club is undertaken by the Board of Directors which must be composed of at least 5 members unless otherwise stated in the constitution of the Club.
The decisions are taken with simple majority of the present members of the Board of Directors, unless otherwise stated in the constitution of the Club.
The Club must prepare and file audited accounts every year with the Registrar of Clubs, which is under the responsibility of the Ministry of Interior.
The registering authority for Clubs is the Registrar of Clubs which is under the Ministry of Interior.
An approximate time for registration of a Club, based on our experience, is between 1 to 3 months.
Registration of a Foundation (Ίδρυμα) under the Clubs and Foundations Law [Law 104(I)/2017 ]
A Foundation is established for the purpose to manage for non profit purposes a property or asset that is donated to the Foundation.
The value of the property can not be less than € 1,000.
The administration of the Foundation can be taken over by Commissioners or the Board of Directors appointed by the founder or founders. The manner of their succession must be specified in the articles of association and after the Foundation has been established it must be clear to the founders that they themselves cannot subsequently change the Commissioners or the Board of Directors.
According to the Law, the objects of a Foundation can be the promotion of education, the promotion of health, promoting citizen and community development, the promotion of the arts, culture, cultural heritage or science, the promotion of amateur sports, the promotion of human rights, the settlement of disputes or reconciliation, or the promotion of religious or national harmony or equality and individuality, promoting the protection or improvement of the environment, alleviating the needs arising from the young or old age, health problems, disability, financial difficulties or other handicap and promoting animal welfare and protection.
A Foundation is managed by three (3) or more persons and, unless the constitution provides otherwise, their decisions are taken by a simple majority of the members present and, in case of a tie, the vote of the president prevails.
The members Foundation have the obligation to keep accounting books, in which are recorded all the transactions of all transactions of the Foundation, as the case may be, and to prepare the following accounts at the end of each financial year.
The registering authority for Foundation is the Registrar of Clubs which is under the Ministry of Interior.
An approximate time for Foundation registration , based on our experience, is between 1 to 3 months.
Registration of a non-profit company under the Companies Law
Non-profit companies are established and registered under the Companies Law, Cap 113.
The objects of the company to be incorporated must relate to the promotion of commerce, art, science, religion, charity or any other community interest purpose.
It is important to noted that the company’s profits if any or other revenues must be used for the promotion of the company’s objects and the company must prohibit the distribution of dividends to its members. The company’s memorandum of association must explicitly state that it is a non-profit company.
The company’s memorandum of association must explicitly state that in the event of the company’s dissolution, any surpluses shall be distributed exclusively to non-profit community interest organisations, with objects similar and/or comparable to the objects of the company under dissolution.
Α non-profit company is managed by the Board of Directors.
A non- profit company must file audited accounts with the Registrar of Companies every year.
The registering authority for a private company limited by guarantee is the Department of Registrar of Companies.
The time to register a non profit company is around 2 weeks.
A graphical representation of the key characteristics of NGOs is provided below.
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