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%.
You can open an enterprise in Cyprus by choosing one of the following legal types:
- 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.
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).
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.
Interested in registering a company in Cyprus? Why not contact YB Case? team. Our experts will also be happy to assist you in opening an account with a Cyprus bank and obtaining a business license in Cyprus.