Company registration in Cyprus

After joining the EU, Cyprus has been able to provide international entrepreneurs with a number of advantages, of which the most notable one has been tax optimization.

ADVANTAGES OF ESTABLISHING A FIRM IN CYPRUS

• a corporate tax is only 12,5%;
• no tax on dividends, proceeds from trading in securities or sale of real estate abroad;
• an income tax on IP is 2%.

LEGAL FORM

You can open an enterprise in Cyprus by choosing one of the following legal types:

• LTD;
• PLC;
• OJSC;
• GP;
• LP;
• a subsidiary of a foreign company.

Please note that the most popular legal form is LTD.

REGISTERING AN LTD IN CYPRUS

• First of all, you must register a unique name in the Register of Companies. The name may be in any language but must be translated into Greek/English. The “Limited” or “LTD” should be added at the end.
• A min. number of shareholders is one, a maximum is fifty. After opening a company in Cyprus, its shares cannot be immediately sold to the general public.
• Bearer shares are not permitted. A minimum value of each share is 1 EURO. Share denominations may be in euros or any other international currency.
• The minimum capital amount is 1 EURO. Capital tax is 0,6% and paid only once.
• A company’s shareholders bear responsibility for its debts but only within the amount of their initial investment.
• The minimum number of directors is 1. A maximum number of directors is not prescribed by law. Directors must be local tax residents.
• A secretary must be appointed.
• Opening a bank account in Cyprus takes only several days.
• Financial statements must be submitted to the Register in the HE 32 form once a year

Please note: obtaining a license in Cyprus takes up to 5 working days.

CHARTER

A Charter is an agreement governing relations between shareholders, directors and a secretary. Amendments in the Charter may relate to:

• dividend payments;
• extraordinary shareholders meetings;
• voting rights of the members of the Board of Directors;
• rights of shareholders to change directors and secretaries;
• the company’s ability to take out loans and extend loans to directors.
• voluntary liquidation or liquidation on the basis of a court order.

MEMORANDUM OF ASSOCIATION

A MOA is an official document that contains the following information:

• a company name.
• a line of business a company is in; failure to include any activity in the MOA is deemed an abuse of authority and is, therefore, invalid.
• a registered office.
• capital requirements.
• info on shareholders.

HOW TO REGISTER A COMPANY IN CYPRUS?

Those seeking to establish an enterprise in Cyprus will need to provide our experts with the following documents:

• a registration certificate;
• photocopies of shareholders’ passports;
• MOA and a Charter;
• a name in the Register;
• a bank statement.

If a shareholder/director is another company, then documents of such an enterprise, as well as those of its directors/shareholders/secretary will also be required.

Please note: all documents must be executed in Greek/English and authenticated by a notary.

TAXATION IN CYPRUS

• A corporate tax is 12,5% and payable on income received in Cyprus (for non-residents) and all sources (for residents);
• VAT is 0-19%, (0% for exporters; 5% is levied on selling products, medicines and books, 9% is paid by owners of hotels, restaurants and transport companies);
• Income tax on IP is 2%.
• A tax to the Defense Fund is 3-30% (paid only by residents).
• A capital gains tax is 20% (paid when selling real estate or shares).

REPORTING

If you decide to set up a company in Cyprus, you must submit the following annual reports:

• a tax return;
• a financial report in Greek;
• an annual report.

Requirements for registering Cyprus companies include:

• having a director/shareholder (can be any person, regardless of their citizenship or place of residence);
• having shareholders (can be individuals or legal entities);
• having a registered office in Cyprus;
• having a secretary (must be a local resident).

WHY SHOULD YOU OPEN A BUSINESS IN CYPRUS?

• Modern legislation, investor-friendly taxation system and access to markets in Europe, Asia and Africa.
• Membership in the EU and European Monetary Union.
• Skilled labor force.
• Cyprus is a signatory to double taxation treaties.
• Possibility to list collective investments on the Cyprus Stock Exchange and other EU exchanges.
• Extended telecommunications network.