Cyprus Company Limited by Guarantee (2026): No Share Capital, Non-Profit and NGO Uses, and Tax Status

Most people setting up in Cyprus reach for the private company limited by shares. But when the goal is a non-profit, a members' club, an NGO, an industry body or a jointly-owned management vehicle, the right tool is often the company limited by guarantee— one of the five company forms the Registrar of Companies recognises under the Companies Law, Cap. 113.Companies Law Cap. 113

This guide explains what a guarantee company is, why the standard non-profit version has no share capital, what it is used for, how it differs from an association or foundation registered under separate legislation, how to form it, and — the question that trips up the most people — how it is actually taxed. For the mechanics of the more common share company, see our full Cyprus company registration guide.

What is a Cyprus company limited by guarantee?

A company limited by guarantee is a company whose members do not buy shares. Instead, each member undertakes in the memorandum to contribute a fixed, usually nominal, amount to the company's assets if it is wound up. That guaranteed sum is the extent of their liability — nothing more.

Under Cap. 113, a company limited by guarantee is defined as one "having the liability of its members limited by the memorandum to such amount as the members may respectively thereby undertake to contribute to the assets of the company in the event of its being wound up." The guarantee is typically set at a token figure — for example €10 or €100 per member — and is only ever called on in a liquidation with a shortfall. In every other respect the company is a normal Cyprus legal person: it has perpetual succession, can contract, own property, sue and be sued in its own name, and shields its members behind limited liability.Companies Law Cap. 113, s.2 and s.91

The defining contrast with a company limited by shares is what binds the members to the company. In a share company, capital is contributed up front and members hold transferable shares carrying economic rights. In a guarantee company, members contribute nothing up front (in the standard form), hold no shares, and their commitment is a contingent promise that crystallises only on winding up.

Does a company limited by guarantee have share capital?

It can be formed either way, but the non-profit workhorse is the company limited by guarantee without share capital. Cyprus law expressly recognises both a guarantee company without share capital and one with share capital.

The Registrar of Companies lists five company forms available in Cyprus: a private company limited by shares, a public company limited by shares, a company limited by guarantee without share capital, a company limited by guarantee with share capital, and the variable capital investment company.Department of Registrar of Companies and Intellectual Property, types of companies

Because the without-share-capital form has no shares, there is nothing to issue, transfer, or distribute profits on — which is exactly why it suits organisations that are not meant to enrich their members. The with-share-capital variant exists but is uncommon; it grafts a guarantee onto a share structure and is rarely the right answer for either a straightforward business or a straightforward charity.

What is a company limited by guarantee used for?

The structure fits any organisation that needs a corporate legal person and limited liability but has no shareholders to reward — non-profits and NGOs, membership and professional bodies, clubs and societies, and jointly-owned management or umbrella vehicles.

• Non-profit organisations and NGOs pursuing charitable, social, cultural, educational, environmental or humanitarian objects.
• Professional and industry bodies — associations of practitioners, trade groups, chambers and standards bodies.
• Clubs, societies and membership organisations that want corporate limited liability rather than an unincorporated association.
• Property management and community companies jointly owned by residents or occupiers, where membership follows ownership of a unit.
• Sports, arts and educational entities, foundations' operating arms, and grant-holding vehicles.

In each case the memorandum and articles do the heavy lifting: a genuine non-profit will include clauses prohibiting distribution of profits to members, requiring surpluses to be applied to the objects, and directing that on winding up any remaining assets pass to a similar non-profit body rather than to the members.

How does it differ from an association or foundation?

A company limited by guarantee is a company, registered with the Registrar of Companies under Cap. 113. An association (society), foundation or federation is a different animal, registered under the Associations and Foundations Law of 2017 with the registrar under the Ministry of Interior.

Cyprus offers two parallel routes to a non-profit. The company route gives you a familiar corporate framework — directors, a company secretary, articles, audited financial statements and Registrar filings. The associations route, governed by Law 104(I)/2017, is the traditional home for membership societies (a society needs at least 20 members), foundations (an endowment of assets dedicated to a purpose) and federations, each supervised by the relevant registrar rather than the Registrar of Companies.Associations and Foundations and Other Related Matters Law of 2017 (Law 104(I)/2017)

Which to choose turns on governance appetite and purpose. Founders who want corporate discipline, a board, and audited accounts — often because they will contract commercially, hold grants, or reassure institutional funders and banks — usually prefer the guarantee company. Grassroots membership bodies frequently stay with the association form. The two are not interchangeable, and moving between them later is not trivial, so the decision belongs at the outset.

How do you form a company limited by guarantee in Cyprus?

The process mirrors incorporating a share company: reserve the name, draft a guarantee-form memorandum and articles, and file the incorporation documents with the Registrar of Companies through a licensed Cyprus advocate, who must prepare and sign them.

1. Name approval.Apply to the Registrar to approve the proposed name. Non-profit names sometimes omit "Limited" under a licence, but that is a specific concession, not the default.
2. Draft the constitution.Prepare a memorandum and articles for a company limited by guarantee — setting the objects, the guarantee amount, membership rules, and (for a non-profit) the no-distribution and asset-lock clauses. The documents are prepared and signed by a Cyprus Bar advocate.Companies Law Cap. 113 (incorporation documents)
3. File with the Registrar.Incorporation documents are submitted electronically through the Registrar's e-filing system. On approval the Registrar issues a certificate of incorporation.
4. Appoint officers. Put in place directors, a company secretary and a registered office in Cyprus, and adopt the first resolutions.
5. Register for tax and, if needed, VAT.Obtain a Tax Identification Number and assess VAT registration if the entity will make taxable supplies — a non-profit is not automatically outside VAT.

The steps, documents and costs are broadly the same as for a share company; the substantive difference is the constitution. Note that Zeno is not a law firm — it coordinates independent Cyprus Bar advocates and ICPAC-licensed accountants who prepare the documents, sign off the accounts and handle the filings.

How is a company limited by guarantee taxed?

Exactly like any other Cyprus company by default. A guarantee company that is Cyprus tax resident is subject to corporate income tax at 15% on its taxable profits from 1 January 2026 — the corporate form gives no automatic relief.

The 15% headline rate (raised from 12.5% under the 2026 reform) applies to a guarantee company's taxable income in the same way it applies to a trading Ltd; the standard rules on deductions, losses and residence all carry across. Where a non-profit has no net taxable income — because its receipts are grants, donations or subscriptions applied to its objects — there may simply be little or no chargeable profit, but that is a factual outcome, not an exemption. For the full corporate rules see our Cyprus corporate tax guide.Income Tax Law N.118(I)/2002 (as amended, 15% corporate rate from 2026)

Cyprus also has no wealth, inheritance or gift tax, and stamp duty on immovable-property instruments was abolished in 2026 — but none of those turn on the guarantee form, and none of them substitutes for the charitable exemption discussed next.

Is a guarantee company automatically tax-exempt?

No. There is no automatic exemption for a company limited by guarantee. A separate exemption exists for the income of charitable, religious or educational institutions of a public character, but it is established on the substance of the organisation and its objects — not conferred by the choice of corporate vehicle.

The Income Tax Law exempts the income of institutions of a public character devoted to charitable, religious or educational purposes, and treatment as an approved charitable body can be recognised through the appropriate official channel. Two practical points follow. First, the exemption attaches to what the organisation genuinely does and how it is constituted — a guarantee company with a commercial object will not qualify simply because it is non-profit-shaped. Second, approved-charity status also unlocks donor-side relief: donations to approved charitable institutions are deductible for the donor, subject to statutory limits.Income Tax Law N.118(I)/2002 (exemption for charitable, religious and educational institutions of a public character)

What are the ongoing obligations?

The same corporate housekeeping as any Cap. 113 company: annual financial statements, an AGM, the HE32 annual return to the Registrar, and a corporate tax return. Non-profit status does not remove the audit, the filings or the deadlines.

• Financial statements and audit.Prepare annual statements and have them examined by an ICPAC-licensed auditor. Smaller entities may qualify for the lighter review engagement under the 2026 size thresholds — see our Cyprus audit requirements guide.
• AGM and HE32. Hold an annual general meeting and file the HE32 annual return with accompanying financial statements to the Registrar of Companies.Companies Law Cap. 113
• Corporate tax return. File the corporate income tax return each year, even where the exemption or an absence of profit means no tax is due.
• Beneficial ownership and registers. Maintain the statutory registers and comply with UBO reporting obligations.

Who should use a company limited by guarantee?

Founders who need a corporate legal person and limited liability for a non-profit, membership or management purpose — and who value a board, articles and audited accounts — are the natural fit. Anyone running a profit-distributing business should use a company limited by shares instead.

If the plan is to trade, hold assets for owners, raise equity or pay dividends, the guarantee form is the wrong tool: with no shares, it cannot deliver returns to investors. Weigh the set-up and running costs against the alternatives — the incorporation and first-year figures in our Cyprus company formation cost guide apply to guarantee companies too. The decision between a guarantee company, an association under Law 104(I)/2017, and a share company is best made with an advocate before the memorandum is drafted, because each choice locks in a different governance and tax path.