When you buy property directly, your name is registered as the owner in the Land Registry, and you have full legal ownership. In contrast, when you buy shares in a company that owns property, you are not directly registered as the legal owner of the property. Instead, you own shares of the company (wholly or partially), which remains the registered legal owner of the property. This means that while you have indirect ownership, and thus control, over the property through the ownership of the company, the title deed remains in the company’s name. The process of buying shares in a company is entirely different from the process of buying property directly, and entirely different considerations apply.

When buying property directly, the transaction ultimately involves a transfer process in the Land Registry, which is conditional on securing relevant tax clearances, up to date clearance of dues and levies, and payment of transfer fees or VAT, as applicable. When buying shares in a company that owns property, the property itself remains in the company’s name, and only the ownership of the company’s shares changes, so the Land Registry is not involved. The transaction customarily involves a share purchase agreement between the buyer and the seller and is completed through certain internal documents, such as instruments of transfer of shares, an updated share register, and other formalities based on the applicable Companies law and the articles of the company. The change in ownership is subsequently recorded with the Registrar of Companies with relevant filings, but there are no preconditions or requirements. Unlike a direct property purchase, no transfer fees are payable, there is no need for capital gains or other tax clearance, in advance, and there is no VAT applicable.

No. There is no VAT on the sale and purchase of shares in a company.

There is no direct tax imposed on the purchase of shares in a company that owns property. However, tax implications may arise when selling the shares later. If the sale of shares results in an underlying profit, and the company’s market value derives at least 50% from Cyprus real estate, the sale may be subject to a 20% capital gains tax. The seller must file a declaration within 30 days after the transaction is completed. The matter is somewhat more complicated if the seller of shares is itself a company. Specific tax advise must be sought at the time of sale.

No, a tax clearance is not necessary as a prior condition to effect the transfer of shares of a company which owns property. If the company’s value derives at least 50% from Cyprus real estate, the seller may have to file a notification to the tax authorities for the sale of shares of a company which owns property in Cyprus within a 30 day pre-defined period set by law and, if applicable, a 20% capital gains tax must be paid. This is done after the sale and purchase of shares takes effect.

No, there are no Land Registry transfer fees when acquiring shares in a company that owns property. Transfer fees are payable only when ownership of a property changes hands through the Land Registry. Since the property remains in the company's name and does not change ownership, Land Registry transfer fees do not apply. There are no fees for transferring ownership of shares other than minor administrative fees for filing the changes with the Registrar of Companies.

Yes, stamp duty applies if there is a written sale and purchase agreement concerning the sale of shares in a Cyprus company. It is payable by the buyer within 30 days of signing, or, if signed abroad, within 30 days of entering Cyprus. The stamp duty rate is calculated based on the purchase price of the shares and must be paid within the applicable deadline to avoid penalties. For amounts up to €5,000, no stamp duty is charged. For amounts between €5,001 and €170,000, a rate of 0.15% is applied. For amounts exceeding €170,000, a rate of 0.20% is applied, with a maximum stamp duty of €20,000. Unlike the contract of sale for property, this agreement is not lodged, registered, or filed with the Registrar of Companies or any other official department, so stamping is not a pre-condition for the sale of shares to be effective. The tax office may request the stamped sale and purchase agreement, if any, as part of the filing process when selling shares. Not stamping the document does not invalidate it. For more information, please see the dedicated FAQs topic on Stamp Duty.

The process can be described as two-fold. The buyer and their lawyers must first seek and secure all relevant documents and information which validate the company's ownership of the property, its legal and physical characteristics and, inter alia, identify any relevant mortgages and encumbrances on the property. This is done by, inter alia, securing the title deed, recent Land Registry search, permits, contract of sale, etc., as applicable. See the dedicated FAQs topic on Due Diligence. Secondly, the buyer and their lawyers must seek and secure all relevant documents and information on other assets and liabilities of company, which they will “inherit” as the new owners, once buying the company shares (wholly or partially). A company, especially if active or operational, may have considerable liabilities and obligations, by operation of law or by contract, including, for example, shareholder loans, VAT and tax obligations, social insurance obligations for employees, dues and outstanding amounts to suppliers and service providers, legal disputes and others. Checking all these aspects requires professional due diligence by lawyers, accountants, or other financial experts, who must review all and every document of the company including financial statements, agreements, etc.

Yes, the company remains responsible for paying any annual property taxes, municipal charges, and levies related to the property. Additionally, the company itself is subject to corporate obligations, including annual filings, potential corporate tax, and any other regulatory fees that may apply depending on its business activities.

Since the property is registered in the company’s name and not in your personal name, your ownership is reflected through the company’s ownership. To prove this, you must first demonstrate that the company owns the property, typically with the relevant title deed (or contract of sale, where applicable) in the company's name, and then prove that you own shares in that company. Ownership of shares is primarily proven by a certificate from the Registrar of Companies showing that you hold shares in the company. However, this is not conclusive. Ideally, you should also provide a duly certified share register (referred to as the “register of members”) and copies of the share certificates. These documents confirm your rights as a shareholder and your indirect ownership of the property.

Yes, the company can sell or rent out the property, just as an individual owner would. However, any such transactions are carried out by the company’s directors on behalf of the company. One or more directors, who can also be shareholders, can act on behalf of the company, depending on what is stated in its Articles of Association or in specific resolutions that designate the authorized signatories.

There are no restrictions per se. However, such a sale must be carried out in accordance with the internal processes, formalities, and procedures of the company, including the applicable law, its Articles of Association, and any shareholder agreements in place. There may be limitations or restrictions, such as pre-emption rights or rights of the first refusal to existing shareholders. It is advisable to seek an experienced lawyer to review all documents and circumstances.

Property, like any other asset owned by the company, falls within its normal activities and operations, and unless there are bespoke articles of association or a shareholder’s agreement, it is typically within the power and control of the board of directors of the company. The decision making and execution authority of any one or more directors is governed by the articles of the company and any relevant company articles. Ultimately, control over the property depends on the number of shares you own and the governance structure of the company. If you own 100% of the issued shares, you have full control over the constitution of the board of directors and thus, company decisions, including how the property is used. If you own a minority stake, decision-making authority will depend on shareholder agreements, voting rights, and company management rules.

Yes, shares in a company can be inherited just like other assets. You can include them in your will or set up a corporate structure that facilitates succession planning. This can make it easier for heirs to inherit the property without having to go through complex Land Registry transfer procedures. For more information, see the dedicated FAQs topic on Inheritance, Gifts and Donations.

Yes, transferring shares is generally easier than transferring property. There is no need to undergo the transfer process in the Land Registry, no requirement to secure tax approvals beforehand, there is no VAT and there are no transfer fees. Transfer of shares is mostly an internal process between the parties, in signing a few documents, which is filed as a formality in the Registrar of Companies. The process is faster and often involves fewer administrative hurdles.

It can provide greater flexibility in structuring ownership, namely it is easier to sell or transfer the property, or part thereof, in the future, either directly or indirectly through the sale of shares. Additionally, ownership through a company may offer tax advantages, including permitted tax deductible expenses, in renting, using or selling the property. Lastly it can be a way to achieve simplified inheritance planning, avoiding a lengthy and costly probate process and forced heirship rules.

The most relevant legislation is Cyprus Companies law, Cap. 113, as amended, and the Cyprus contracts law, cap 149, as amended. The specific company’s memorandum and articles of associations are or primary importance and relevance. Other property related legislation, including relevant tax laws, are also relevant.