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The fees charged by solicitors The fees approved in The Companies (Fees and Charges) Rules 2013.
It has been explained to us that whilst not specified in the Companies Law, it states in the Advocates’ Law that only a practicing solicitor can incorporate a company. Internet research shows the fees for this to be in the region of 1,000 Euros which must be a barrier to many companies being incorporated. More companies, no matter whether small or large, will contribute to the economy and generate employment in the private sector. We are not questioning fees charged by solicitors. However this process gives no real alternative to the Cypriot business community to be able to incorporate a company directly with the Registrar. Recommendation Whilst this may be a contentious recommendation, serious consideration should be given to making it less expensive to transact with Government. The register of companies should be there to support all business in Cyprus, not only one professional sector. We do not suggest that the lawyers are not providing a good service and many companies would undoubtedly continue to use them, particularly where directors are not Republic of Cyprus nationals or residents. However, customers should have the choice to be able to simply incorporate a company directly with the Registrar. 5.2 Fees, EU Directives and Cost Recovery Principles We have been informed that on accession to the EU there were dispensations given relating to EU directives on fees. However, we have not received further clarification on this point we therefore set out our analysis on the full effect of EU legislation and its application on the Companies Section of DRCOR. The Department expects to generate revenue of c. 100m Euros this year, with an estimated cost base of 10m Euros to manage and maintain the register with the existing infrastructure and staff. Whilst it is recognised that the 350 Euro levy is not a fee to be used in recovery calculations, there still remains an exceptional return on employed capital especially when considering the relatively small size of the companies register. We have seen no evidence of statutory fees being based on cost recovery principles which is at odds with the various EU legislation affecting EU company registries such as the EU 1st Directive (as amended), Capital Taxes Directive and the Italian Tax Cases. Furthermore we feel that the fee associated with the pre-vetting of company names seems to be set without a statutory requirement for this process within the Company Law (see paragraph 6.2).
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