Audit or Review for Your Cyprus Ltd in 2026: The New EUR 300,000 Threshold, the Two-Year Test and What Still Needs an Auditor

Status as of 25 October 2026: based on the Cyprus Companies Law, Cap. 113, section 152A as amended by Law 2(I)/2026 (published in the Official Gazette of the Republic on 6 February 2026), section 120(5) and section 153 of Cap. 113, Technical Circular TE 2/2026 of the Institute of Certified Public Accountants of Cyprus (19 February 2026), the ICPAC guidance on review engagements under ISRE 2400, the German Fiscal Code (§§ 8, 9, 10 and 90 AO), the German Income Tax Act (§ 1 EStG), the German Foreign Tax Act (§§ 2, 6, 7 to 13 AStG) and the Romanian Fiscal Code. We will update this guide when the law or official practice changes.

For years, the answer to "does my small Cyprus company need an audit?" was a reflex: yes, every private company, every year, whatever its size. A one-person consultancy with a laptop and four clients was asked for the same kind of independent opinion as a trading group with warehouses and bank debt. The cost and the time were the same kind, only the invoice was smaller.

Large groups never accepted compliance that ignored their size. They had in-house teams who read every threshold, every exemption and every transitional rule, and who designed the company around them. Since 2022 Cyprus law has offered small private companies a lighter route, the review engagement, and on 6 February 2026 the turnover line for that route moved from EUR 200,000 to EUR 300,000. Most small company owners have never heard of it. This guide explains it the way a group finance director would: what the law says, who qualifies and who does not, from which financial year, what a review really is, and where choosing the lighter route would be a mistake.

What this guide covers

1. What section 152A of the Cyprus Companies Law says today, and what Law 2(I)/2026 changed.
2. The two size tests, how turnover and balance sheet total are measured, and why a holding company can fail the turnover test without selling anything.
3. The two-consecutive-years rule, with worked examples.
4. The companies that can never use a review, whatever their size.
5. What a review engagement is, what it is not, and what stays exactly as before.
6. When an eligible company should still choose a full audit.
7. The German, Romanian and Cypriot tax angles for owners who are moving or have moved.
8. A step-by-step switch, common mistakes, a checklist and an FAQ.

The key points

• Audit remains the default. Under section 152A(1)(a) of Cap. 113, every private limited company submits its financial statements to a statutory audit, unless it qualifies for and chooses a review.
• The review route has two size limits. A private company may have its statements reviewed instead of audited if, at its balance sheet date, net turnover does not exceed EUR 300,000 and the balance sheet total (gross assets, without deducting liabilities) does not exceed EUR 500,000.
• Only the turnover limit changed in 2026. Law 2(I)/2026 raised it from EUR 200,000 to EUR 300,000 with effect from publication on 6 February 2026. The EUR 500,000 balance sheet limit is unchanged.
• Timing follows the financial year. ICPAC's Technical Circular TE 2/2026 states that the new limit applies to financial years beginning on or after 6 February 2026. For a company with a calendar year end, that points to the financial year 2027 as the first year assessed against EUR 300,000.
• Two consecutive years. The company must stay within the limits for at least two consecutive financial years at the balance sheet date.
• Passive income counts as turnover. For this test, net turnover includes rents, interest, dividends and royalties. A holding company receiving EUR 350,000 of dividends is above the limit.
• Some companies are always out. Public companies, public interest entities, parents that must consolidate and their subsidiaries, small groups that exceed the limits at group level, and companies supervised by the Central Bank, CySEC or the Superintendent of Insurance (and holders of a qualifying holding in them) cannot use a review.
• A review is not "no accounts". The company still prepares full financial statements, still appoints a statutory auditor, still files with the Registrar and still files its tax return.

Key terms defined

Statutory audit. An independent examination of the financial statements by a statutory auditor or audit firm under the Cyprus Auditors Law, ending in an audit opinion. It gives reasonable assurance, the highest level of assurance auditors provide on historical accounts. The auditor tests transactions, confirms balances with third parties where needed and evaluates internal controls relevant to the audit.

Review engagement. An engagement under the International Standard on Review Engagements 2400 (ISRE 2400). The practitioner performs mainly inquiry and analytical procedures and gives limited assurance. The conclusion is expressed in a negative form: nothing has come to the practitioner's attention that causes them to believe the statements are not prepared, in all material respects, in accordance with the framework.

Statutory auditor. A person or firm licensed under the Cyprus Auditors Law. In Cyprus, a review under section 152A must be performed by a statutory auditor or audit firm, not by any accountant.

Net turnover. For section 152A(1)(d), the net turnover as defined in Cap. 113, plus income from rents, interest, dividends and royalties.

Balance sheet total. The total value of assets, without deducting any liabilities. A company with EUR 600,000 of assets financed by a EUR 400,000 shareholder loan has a balance sheet total of EUR 600,000, not EUR 200,000.

Public interest entity (PIE). Broadly, listed companies, credit institutions, insurance undertakings and other entities designated as such by law. PIEs are always audited.

Consolidated financial statements. Accounts that present a parent and its subsidiaries as one economic entity. A parent that is required by Cap. 113 to prepare them cannot use a review, and neither can its subsidiaries.

The statute: section 152A before and after 6 February 2026

The rule is audit; the review is an option that the law grants to qualifying private companies. Section 152A(1)(a) of Cap. 113 lists the companies that submit their financial statements to a statutory audit: every company required to prepare consolidated statements, every public interest entity, every private limited company and every public limited company.

Section 152A(1)(d) then opens a door for private limited companies only. Instead of an audit, they may submit their financial statements to a review by a statutory auditor or audit firm, provided that net turnover and balance sheet total do not exceed the limits set by the paragraph at the balance sheet date. The first proviso adds the time dimension: a company may use a review only where, at the balance sheet date, it does not exceed or ceases to exceed the limits of the two criteria for at least two consecutive financial years. The second proviso defines turnover broadly by adding rents, interest, dividends and royalties.

Law 2(I)/2026 amended this paragraph in one material respect. Article 5 of the amending law replaced "two hundred thousand euro (EUR 200,000)" with "three hundred thousand euro (EUR 300,000)". Article 7(2) provides that article 5 entered into force on publication in the Official Gazette, which took place on 6 February 2026. The other parts of the amending law, which introduce a financial reporting standard for small-sized entities and new schedules, take effect only from 1 January of the year after that small-entity standard is published in the Gazette.

What the law does not say is just as important. There is no general size-based exemption from both audit and review for Cyprus companies. Every private company has its financial statements examined by a statutory auditor. The choice the law gives a small company is between two levels of assurance, not between assurance and nothing. Articles online that speak of a Cyprus "audit exemption" usually mean exactly this review route.

From which financial year does EUR 300,000 apply?

ICPAC reads the change as applying to financial years beginning on or after 6 February 2026. Its Technical Circular TE 2/2026 of 19 February 2026 informs members that the net turnover limit rises from EUR 200,000 to EUR 300,000, that the other criteria remain unchanged, and that the provisions apply for financial years starting on or after 6 February 2026.

For most small Cyprus companies the financial year is the calendar year. A financial year that began on 1 January 2026 started before 6 February 2026. On ICPAC's reading, that year is still assessed against the EUR 200,000 limit, and the first calendar year assessed against EUR 300,000 is the year starting 1 January 2027. A company with a financial year starting on 1 July 2026 would apply the new limit to the year ending 30 June 2027.

How the two-consecutive-years test counts the years before the change is a practical question that the statute does not answer in words. A company with turnover of EUR 260,000 in 2025 and 2026 was above the old limit in both years. In 2027 the limit is EUR 300,000. Whether the earlier years are re-measured against the new figure for the purpose of the two-year count is a point to agree with the auditor before the year end, in writing, and we do not treat any answer as settled until the auditor has confirmed it.

The two size tests, measured the way the law measures them

Both tests are measured at the balance sheet date, and both must be met. The company qualifies only if net turnover does not exceed EUR 300,000 and the balance sheet total does not exceed EUR 500,000. Passing one is not enough.

Net turnover is broader than sales

For most companies, net turnover is revenue from the sale of goods and services after discounts and VAT. For this test, section 152A adds four types of income: rents, interest, dividends and royalties. The purpose is clear. A pure holding company or an investment company would otherwise show little or no "turnover" in the accounting sense and could claim to be small while receiving large flows of passive income.

The consequence for founders is direct. Many people who move to Cyprus hold their operating business through a Cyprus holding company, or use a Cyprus company to receive dividends from a company abroad. If the holding company receives EUR 350,000 of dividends in a year, it exceeds the turnover limit even if it has no sales, no employees and no invoices. It is audited.

The balance sheet total counts gross assets

The balance sheet total is the total of assets without deducting liabilities. Cash, receivables, loans to related parties, property, equipment, intangible assets and investments in subsidiaries all count. Loans from the shareholder do not reduce the total. A company that has retained profits for several years, or that has borrowed to buy an asset, can cross EUR 500,000 while its turnover stays modest.

Both tests, every year, at the year end

The test is a snapshot at the balance sheet date, repeated every year, and combined with the two-year rule. Growth during the year matters only through the year-end figures. A large invoice raised on 30 December and a dividend received on 31 December both count for that year.

The two-consecutive-years rule, explained with examples

A single good year does not make a company eligible, and the law looks at a sequence, not a moment. The proviso to section 152A(1)(d) allows a review only where the company does not exceed, or ceases to exceed, the limits of the two criteria for at least two consecutive financial years.

The following illustrations are simplified and use invented figures. They show the mechanism; the auditor confirms the result for each real company.

Illustration 1: steady small consultancy. A Cyprus Ltd with a calendar year end has turnover of EUR 140,000 in 2025 and EUR 150,000 in 2026, and a balance sheet total of EUR 90,000 at both year ends. It is within both limits for two consecutive years under the old and the new figures. It may use a review.

Illustration 2: the company that grew and then settled. A company had turnover of EUR 420,000 in 2024 and then reduced activity to EUR 180,000 in 2025 and EUR 170,000 in 2026, with a small balance sheet. It ceased to exceed the limits in 2025 and stayed within them in 2026. After two consecutive years within the limits, the review route opens.

Illustration 3: the holding company with no sales. A Cyprus company owns 100% of an operating company in Germany or Romania and receives EUR 320,000 of dividends in 2027. It has no sales. For section 152A, its turnover is EUR 320,000. It exceeds the limit and is audited.

Illustration 4: the company between the old and new limits. A software company has turnover of EUR 240,000 in 2025, EUR 260,000 in 2026 and EUR 270,000 in 2027, with a balance sheet total of EUR 180,000. In 2025 and 2026 it is above the old EUR 200,000 limit. From 2027 it is within the new EUR 300,000 limit. When it can first use a review depends on how the two-year count is applied across the change, which is exactly the point to settle with the auditor before the 2027 year end.

Illustration 5: one big year. A company within the limits for years has one exceptional year with turnover of EUR 380,000. How long that single year affects eligibility depends on how the two-year language is applied in practice, and the safe planning assumption is that the auditor will look closely at the year after.

Who can never use a review

Size is not the only filter. Even a company with tiny figures must be audited if it falls into one of these groups.

The group rule surprises owners more than any other. A founder might keep each Cyprus company small: one company for consulting, one holding a property, one holding intellectual property. If they sit under a common Cyprus parent and the group figures together exceed the limits, the review route closes for all of them. For the group calculation, section 152A(1)(f) allows the parent not to eliminate intra-group balances and transactions, a technical relief that the auditor applies.

What a review engagement is, and what it is not

A review gives a lower level of assurance through a narrower set of procedures, performed by the same kind of licensed professional. Under ISRE 2400, the practitioner obtains an understanding of the company and its environment, designs and performs inquiry and analytical procedures, and focuses on areas where material misstatement is likely. They do not normally test internal controls, confirm bank balances or receivables with third parties, attend inventory counts or perform the detailed substantive testing that an audit requires.

The result is a review report with a conclusion in negative form. An audit opinion says the statements give a true and fair view. A review conclusion says nothing has come to the practitioner's attention that causes them to believe the statements do not. Readers of financial statements, including banks and tax authorities, understand the difference.

What stays exactly as before

ICPAC's guidance on review engagements makes clear that the review changes the assurance, not the company's other obligations.

• Financial statements. The company still prepares full financial statements under its applicable framework.
• Auditor appointment. Section 153 of Cap. 113 refers to companies that must submit their statements to an auditor "for audit or review", and the auditor is appointed at the annual general meeting in both cases.
• Registrar filing. The reviewed financial statements are attached to the annual return filed with the Registrar of Companies, as audited statements would be.
• Tax return. The company files its corporate income tax return with the Tax Department on the basis of its financial statements.
• AML obligations. Obligations under the Cyprus anti-money laundering law are unaffected.

The Registrar does not check, so the directors must

Section 120(5) of Cap. 113 provides that where reviewed financial statements are attached to the annual return, the Registrar registers the annual return without examining whether a review was permitted under section 152A(1)(d). In plain terms: the system will accept the filing. If the company was not in fact eligible, the problem is not caught at filing. It surfaces later, in a bank review, a tax enquiry, a due diligence or a dispute among shareholders, and it is the directors who chose the route. Our view is that every switch to review should be supported by a short board minute recording the figures for the relevant years and the auditor's confirmation of eligibility.

Audit and review side by side

The differences go beyond the price of the engagement. The cards below compare the two routes on the points that matter to an owner.

When an eligible company should still choose the full audit

Eligibility gives you a choice, and the choice is strategic. The law says a qualifying company "may" use a review. It may also keep the audit. Here are the situations in which we usually advise keeping it.

You need bank credit or a new banking relationship. Banks set their own documentation requirements. Some accept reviewed statements for small borrowers; others ask for audited accounts before lending or onboarding. A review can save fees and then cost a facility.

You plan to bring in investors or sell the company. Buyers and investors price uncertainty. Audited history shortens due diligence and supports the valuation. A company that will be sold in two or three years often benefits from audited years in the data room.

You are moving residence and need to defend where the company is managed. A company owned by someone who is leaving Germany or Romania will be looked at from two sides. Audited statements, read together with board minutes and contracts, are stronger evidence of an orderly, independently checked company than reviewed ones. This is our analysis, not a legal rule.

You have related-party flows. Loans to and from the shareholder, management fees from a foreign operating company, intellectual property licences and cross-border service charges attract tax attention. An audit tests these balances more deeply.

You want strong records for future disputes. Shareholder disagreements, divorces and inheritance cases look at company accounts. Audited figures are harder to attack.

You are growing towards the limits. A company likely to exceed EUR 300,000 within a year or two may prefer continuity of audit rather than switching for one or two years.

Big groups make this decision every year, company by company, on purpose. So should you.

The German tax angle: why the quality of your accounts matters to Berlin

For an owner who lives in Germany, or is leaving it, the Cyprus company is judged by German rules as much as by Cypriot ones. The level of assurance on the accounts is not a German tax test. But accounts are evidence, and German law places the burden of explaining foreign matters on the taxpayer: under § 90(2) AO, taxpayers have an increased duty to clarify facts and obtain evidence relating to matters outside Germany.

German tax residence has more than two routes

Many founders think that German tax residence is a matter of "six months". That is one route among several, and the most dangerous route is the one with no day count at all.

• Residence through a dwelling, § 8 AO. You have a residence (Wohnsitz) where you hold a dwelling under circumstances indicating that you will keep and use it. There is no minimum number of days. A flat you keep, a room in your parents' house that is available to you, or a key to a friend's apartment that you use when you visit can be enough, even if you spend only a few nights there. A Wohnsitz in Germany makes you unlimited taxable in Germany on your worldwide income, and the treaty then decides which country has priority.
• Habitual abode, § 9 AO. You have your habitual abode where you stay in circumstances showing that you are not only temporarily there. A continuous stay of more than six months always counts, and short interruptions are disregarded.
• Extended unlimited liability, § 1(2) EStG. German nationals who live abroad but are employed by a German public body and paid from German public funds, such as diplomats and certain posted public servants, and their households, can remain unlimited taxable without a German residence or habitual abode.
• Unlimited liability on application, § 1(3) EStG. Non-residents whose income is mainly German-taxable can apply to be treated as unlimited taxable. This is a choice, but people who make it should know what it means.
• Extended limited tax liability, § 2 AStG. A German national who was unlimited taxable in Germany for at least five of the last ten years and moves to a low-tax country while keeping substantial economic interests in Germany can remain taxable on a wider range of German-source income for the year of the move and the following ten years.
• Exit taxation, § 6 AStG. When unlimited tax liability ends, shareholdings of at least 1% in a corporation, including your Cyprus company, can be taxed as if sold, if you were unlimited taxable for at least seven of the last twelve years.

These are separate tests with separate consequences. Whether you are German resident is decided first by § 8 and § 9 AO, then by the treaty between Germany and Cyprus where both countries claim you.

Place of management and CFC rules

A Cyprus company is taxed in Germany if its place of management (Ort der Geschäftsleitung, § 10 AO) is in Germany: the place where the important management decisions are actually taken. A company whose director decides from a desk in Munich is, in German eyes, a German taxpayer, whatever its registered office says. Our guide on the place of effective management explains the test in depth.

If you remain German resident, the controlled foreign company rules in §§ 7 to 13 AStG can also attribute certain passive, low-taxed income of the Cyprus company to you. Since 2024, income is considered low-taxed if it bears tax of less than 15%. Cyprus corporation tax is 15% since 1 January 2026, but the effective rate on specific income streams can be lower because of special regimes, and passive income is where German auditors look first.

In each of these scenarios, the German tax inspector will ask for the Cyprus accounts. A reviewed set of accounts is legal and valid. Whether it is the best evidence for your specific German position is a separate decision, which we make together with the German adviser before the year end.

The Romanian angle

For a Romanian resident shareholder, the main risk is not the Cyprus audit rule but Romanian residence of the company. Under the Romanian Fiscal Code, a legal person set up under foreign law is treated as Romanian if its place of effective management is in Romania. A Cyprus company effectively managed by its owner from Cluj or Bucharest can therefore become a Romanian taxpayer.

Dividends received by Romanian resident individuals are taxed in Romania, and the rate for dividends distributed from 2026 is 16%. When a Romanian resident receives a dividend from a Cyprus company, the treaty and the credit rules decide how much is paid where. Reviewed or audited, the accounts determine the distributable profit, and the Romanian tax authority will read them. The choice of review should be made with the Romanian side in mind, especially in the year of the move.

The Cypriot tax angle

In Cyprus, the review route does not change how the company is taxed. Corporation tax is 15% on taxable profit from 1 January 2026. The company still prepares financial statements, computes its taxable profit and files its corporate income tax return. ICPAC's guidance indicates that reviewed statements meet the company's obligations towards the Tax Department; we have the tax partner confirm the filing basis for each company.

For an owner who is Cyprus tax resident and not domiciled in Cyprus, dividends from the company carry no SDC for a Non-Dom and are outside personal income tax, with GESY at 2.65% on a capped base. None of this depends on whether the accounts were audited or reviewed. What depends on the quality of the accounts is how convincingly the company can show that its profits, related-party flows and dividends are what they claim to be. Our guide on salary or dividend from a Cyprus company explains the personal side.

Separately from company law, Cyprus tax law has its own thresholds under which self-employed individuals may present accounts without an audit. Those rules concern individuals and partnerships under tax law and are not the subject of this guide.

Switching from audit to review: step by step

A clean switch takes one financial year of preparation. These are the steps we coordinate with the auditor and the accountant.

1. Collect the figures. Net turnover including rents, interest, dividends and royalties, and gross balance sheet total, for the current year and at least the previous two years.
2. Check the group. List every company in which you or your companies hold a controlling stake. Decide whether a consolidation obligation exists and whether the group exceeds the limits.
3. Check the exclusions. Confirm that the company is a private company, not a PIE, not regulated by the Central Bank, CySEC or the Superintendent of Insurance, and does not hold a qualifying holding in such a company.
4. Ask the auditor for written confirmation. Including how the two-year count applies across the 2026 change for your financial year.
5. Map the counterparties. List your banks, lenders, investors, major clients and tax authorities abroad, and confirm whether any of them require audited statements.
6. Take the decision at board level. A board minute records the figures, the auditor's confirmation and the reasons for choosing review.
7. Appoint the auditor for the review. At the annual general meeting, as section 153 requires, with an engagement letter under ISRE 2400.
8. Prepare the financial statements. The same discipline as for an audit: full accounts, proper bookkeeping, documented related-party transactions.
9. File as usual. Attach the reviewed statements to the annual return and file the tax return on time.
10. Re-test every year. If the company approaches the limits, decide in advance whether to return to audit.

Common mistakes

• Reading "audit exemption" literally. There is no route without an independent examination for a Cyprus private company.
• Forgetting passive income. Dividends, interest, rents and royalties count as turnover for this test.
• Netting the balance sheet. The EUR 500,000 limit is gross assets, before deducting liabilities.
• Applying EUR 300,000 to 2026 automatically. ICPAC applies it to financial years starting on or after 6 February 2026.
• Ignoring the group. A small company in a group above the limits is excluded.
• Relying on the Registrar. The Registrar files reviewed statements without checking eligibility; responsibility stays with the directors.
• Choosing review in the year of a move without asking the German or Romanian adviser. The accounts will be read in two countries.
• Switching without telling the bank. Some banks have covenants or onboarding rules that require audited accounts.

Worked examples (illustrations, not clients)

These examples describe typical situations with invented figures. They are illustrations, not real clients.

A German consultant who moved to Cyprus. A management consultant moved from Germany to Cyprus in 2025 and works through his Cyprus Ltd with turnover of about EUR 210,000 a year and a balance sheet total of EUR 120,000. In 2025 and 2026 he is above the old EUR 200,000 limit. From 2027 he is within EUR 300,000. Because 2025 was the year of his move and the German tax office may review his exit and the company's place of management for that period, his advisers keep the audit for 2025 and 2026 and plan the switch to review for 2027, subject to the auditor's confirmation of the two-year count.

A Romanian founder with a holding company. A Romanian founder, now Cyprus resident and Non-Dom, holds her Romanian operating company through a Cyprus holding company. The holding company receives EUR 450,000 of dividends a year. It has no sales, but its turnover for section 152A is EUR 450,000. It is audited. Her operating company in Romania follows Romanian audit rules separately.

Three companies, one group. A founder holds three small Cyprus companies under a Cyprus parent. Individually each has turnover under EUR 150,000, but together the group's turnover is EUR 420,000. The group exceeds the limits at group level for two consecutive years, so neither the parent nor the subsidiaries can use a review.

A small company that needs a loan. A design studio with turnover of EUR 160,000 is eligible for review. It plans to finance new equipment through a bank loan. The bank requires audited statements for lending above a certain amount. The studio keeps the audit for the year of the application.

Our view: proportionate assurance is a right worth using carefully

ENCC analysis. Compliance should be proportionate to the size and risk of a business. For years Cyprus asked the smallest companies for the same type of assurance as much larger ones. The review route, and now the higher EUR 300,000 limit, restore some proportion. Owners who understand the rule can save time and fees in years where an audit adds little. Owners who use it carelessly can lose more than they save, through a refused loan, a slower sale or a weaker position in a German or Romanian tax enquiry.

The people who always planned this well were the ones with a finance director who read the law. Today you can have that reading for your own company. We coordinate the decision; licensed auditors and tax advisers carry out the engagement and sign their reports.

Checklist before you choose review

• Turnover including rents, interest, dividends and royalties at or below EUR 300,000 (for financial years beginning on or after 6 February 2026).
• Gross balance sheet total at or below EUR 500,000.
• Within both limits for at least two consecutive financial years, confirmed in writing by the auditor.
• Private limited company, not a PIE, not a public company.
• No consolidation obligation, and the group below the limits.
• Not supervised by the Central Bank, CySEC or the Superintendent of Insurance, and no qualifying holding in such a company.
• Banks, lenders, investors and buyers consulted.
• German or Romanian adviser consulted if you moved, are moving or the company could be considered managed abroad.
• Board minute recording the decision.
• Auditor appointed at the AGM for the review, engagement letter under ISRE 2400.

FAQ

Is there a full audit exemption for small Cyprus companies in 2026?

No. A private company that qualifies may choose a review engagement instead of an audit. Both are performed by a statutory auditor. There is no general route without any independent examination.

What exactly changed on 6 February 2026?

Law 2(I)/2026 raised the net turnover limit for the review route from EUR 200,000 to EUR 300,000. The balance sheet limit of EUR 500,000, the two-year rule and the exclusions did not change.

Does the new limit apply to my 2026 accounts?

According to ICPAC TE 2/2026, the new limit applies to financial years beginning on or after 6 February 2026. For a calendar-year company, the first year is 2027. Confirm your own year with your auditor.

Do dividends my holding company receives count as turnover?

Yes. For this test, net turnover includes rents, interest, dividends and royalties.

Does the balance sheet total mean net assets?

No. It is the total value of assets without deducting liabilities.

Can my Cyprus subsidiary use a review if the group is small?

Only if the parent has no obligation to consolidate and the group as a whole does not exceed the limits for at least two consecutive years. Regulated companies and their qualifying holders are excluded in any case.

Does a review reduce my tax filing obligations?

No. The company still prepares full financial statements, files its annual return with the Registrar and files its corporate tax return.

Will a bank accept reviewed statements?

Some will, some will not. Banks set their own requirements, especially for lending. Ask before you switch.

Is a review a good idea in the year I leave Germany?

It is legal if you qualify, but the accounts for that year will be read by the German tax authorities when they examine your exit, your residence and the company's place of management. We usually discuss keeping the audit for the move years.

Who decides whether the company qualifies?

The directors, supported by the auditor. The Registrar files reviewed statements without checking eligibility.

Next steps

To set up the company correctly from the start, read Cyprus company formation and your own Cyprus Ltd as sole director. For the management test that German and Romanian tax offices apply, read the place of effective management. For the German residence rules in full, read German tax residency rules. Today's companion guide looks at the other end of the spectrum of structures: the Nevis Multiform Foundation with an LLC beneath it. All our guides are on the English blog.

Sources

• Cyprus Companies Law, Cap. 113, consolidated text including section 152A, section 120(5) and section 153 (CyLaw, Greek): https://www.cylaw.org/nomoi/enop/non-ind/0_113/full.html
• Law 2(I)/2026 amending the Companies Law, Official Gazette of 6 February 2026 (CyLaw, Greek): https://www.cylaw.org/nomoi/arith/2026_1_002.pdf
• Department of Registrar of Companies and Intellectual Property, financial statements and accompanying documents: https://www.companies.gov.cy/en/business-entities/2-company/5-lifecycle/1-running-a-company/5-guidance/filing-annual-returns-and-accounts/financial-statements-and-other-accompanying-documents
• ICPAC, Technical Circular TE 2/2026, changes to the criteria for review engagements (19 February 2026, Greek): https://www.icpac.org.cy/selk/newdetails.aspx?catid=1001&id=2823
• German Fiscal Code, § 8 AO (residence): https://www.gesetze-im-internet.de/ao_1977/__8.html
• German Fiscal Code, § 9 AO (habitual abode): https://www.gesetze-im-internet.de/ao_1977/__9.html
• German Fiscal Code, § 10 AO (place of management): https://www.gesetze-im-internet.de/ao_1977/__10.html
• German Fiscal Code, § 90 AO (duty to cooperate): https://www.gesetze-im-internet.de/ao_1977/__90.html
• German Income Tax Act, § 1 EStG: https://www.gesetze-im-internet.de/estg/__1.html
• German Foreign Tax Act, § 2 AStG: https://www.gesetze-im-internet.de/astg/__2.html
• German Foreign Tax Act, § 6 AStG: https://www.gesetze-im-internet.de/astg/__6.html
• German Foreign Tax Act, § 8 AStG (low taxation): https://www.gesetze-im-internet.de/astg/__8.html
• Romanian Fiscal Code, Law 227/2015 (ANAF): https://static.anaf.ro/static/10/Anaf/legislatie/Cod_fiscal_norme_2023.htm
• Cyprus Ministry of Finance, tax reform 2026: https://www.gov.cy/en/taxreform/

Verified on 25 October 2026.

Cover photo: sea arch at Cape Greco, Cyprus. Photo: kallerna, Wikimedia Commons, CC BY-SA 4.0, cropped.