The Cyprus Company
THE REGISTRATION PROCESS AND THE BENEFITS
Cyprus offers significant tax advantages and exemptions, making it an attractive base for international corporations. The company formation process is straightforward and efficient, typically taking about 7 to 10 days. It begins with the approval of the company name, which usually takes 1 to 3 working days, followed by registration completion within approximately 8 working days.
Cypriot law permits the relocation of operational headquarters to or from Cyprus, providing investors, entrepreneurs, and international companies the opportunity to attain Cyprus tax residency and benefit from its favorable tax regime.
Corporate Tax 12,5%
Tax exemptions for Owners
Low maintenance fees
Fast Registration
Tax benefits of
Cyprus Companies
A Cyprus company offers multinational corporations a flexible and efficient structure due to its favorable tax regime, which allows for reduced global tax liabilities and various exemptions and deductions on income and expenditures.
- Corporate tax rate at 12,5% on profit
- Dividend participation exemption
- Exemption on disposal of securities (e.g. shares, bonds, debentures)
- No withholding taxes on dividend, interest and royalty payments abroad
- No capital gains tax (except for disposal of real estate in Cyprus or shares of company holding real estate in Cyprus to the extent gains is attributable to the real estate holding)
- Tonnage tax for shipping companies
- No succession taxes
- Attractive IP regime
Types of Cyprus Companies
Companies serve different purposes
A Cyprus company offers multinational corporations a flexible and efficient structure due to its favorable tax regime, which allows for reduced global tax liabilities and various exemptions and deductions on income and expenditures.
The minimum number of members is one and the maximum is limited to fifty. And there can be no invitation to the public to subscribe for any shares or debentures.
This is the most popular type of companies in the business world and their general characteristics are the following:
- The minimum number of members is one and the maximum is fifty;
- The liability of every member is limited to the amount of their subscribed shares;
- No bearer shares can be issued (however nominee services can be offered);
- Preferential shares or different classes of shares can be issued;
- The right to transfer shares is restricted;
- The word “limited” must appear at the end of the name of the company
- There can be only one Director who can be either Cypriot of foreigner and the Board Meetings can be held anywhere in the world;
- The company must have a registered address in Cyprus and a company secretary;
- The Secretary maintains the Register of Members, the Minute Book recording all the Board Meetings and Resolutions, the Register of Charges, the Register of Directors and Secretary and the Company seal (under its custody);
- Any charges against the company must be registered with the Company Registrar in order to ensure priority and protection against other creditors of the Company.
- What is important to note is that the identity of beneficial owners in a Cyprus private limited company may remain confidential through nominee holding. This confidentiality is maintained as long as the company and its ultimate beneficial owners are not involved in any criminal activity.
The liability of each member is limited to the amount agreed on the Memorandum of Association to be contributed in the event the company goes into liquidation. In the majority of cases these companies are incorporated as non-profit making organisations under section 20 of Cap 113.
The liability of each member is limited to the amount agreed on the Memorandum of Association to be contributed in the event the company goes into liquidation. In the majority of cases these companies are incorporated as non-profit making organisations under section 20 of Cap 113.
Any company incorporated outside of Cyprus may establish a legal presence in Cyprus through the legal form of a branch in Cyprus – the so-called overseas companies.
To register a branch the following documents must be filed translated into Greek:
- A certified copy of the constitutional documents of the company (Memorandum and Articles of Association, its charter etc)
- Information regarding the Directors and Secretary of the Company;
- Name and address of at least one person who is a resident of Cyprus duly authorised to receive on behalf of the company any notices.
If the foreign legal entity is a bank, an insurance or an investment company then special licences must also be obtained from the relevant regulatory authorities.
Cyprus has amended its Company Law in order the implement the provisions of the Council Regulation No. 2157/2001. The changes have been implemented by the Amendment Law No. 98(I) of 2006 and was enacted n the 7th July 2006. Thus an SE can now transfer its office from another Member State to Cyprus (and vice versa) without dissolving the company in the other Member State.
There are four possible ways for incorporating an SE:
- Merger, i.e. a public limited company from two member states can form an SE by merger;
- Holding, i.e. a public and private limited companies from two Member states can form a holding company;
- Subsidiary; any legal entities governed by public or private law from two Member States (or an SE itself) can form a subsidiary SE;
Conversion; a public limited liability company can convert into an SE if it had a subsidiary in another Member State for two years. Furthermore a EC can be established by an already existing European company.
The Cyprus company
Registration Procedure
Basic Requirements for Incorporation
- Approval by the Registrar of Companies of the proposed name of the company. If the clients are not particular about the name, we can provide a “shelf” name.
- A brief description of the main objects of the company in order to prepare/draft its Memorandum and Articles of Association.
- The amount of the nominal capital of the company, and how it is going to be divided. This is usually EURO 1,000 divided into 1,000 shares of EURO 1 each. It should be noted that it is also possible to denominate the capital in a currency other than EURO.
- The names, addresses, occupations, passport details and nationalities of the proposed beneficial owners, as well as the proportion in which they will hold the shares of the company. If nominees will be used, the particulars of the nominees are needed as well.
- The names, addresses, occupations, passport details and nationalities of the proposed directors and secretary of the company.
- The proposed address of the registered office of the company.
- The details of the proposed auditors of the company.
In order to comply with Anti-Money Laundering legislation, our firm’s standard Know-Your-Client questionnaire will need to be completed and signed by the proposed beneficial owners.
What you need to know
The law requires the company to have a registered office in Cyprus, which will be used as the commercial address of the company for conducting their operations.
Cypriot companies must possess a memorandum and article of association that will determine the activities of the company and how the establishment will regulate its internal affairs.
There is no legal regulation restriction on the minimum or maximum share capital of the company.
In accordance with Cyprus law, limited liability companies must have at least one shareholder. If you wish to preserve the anonymity of shareholders, the shares may be held by a company which acts as a trustee of the shares of the owners, without revealing their real identity. The confidentiality of such information is kept and a decision by Cyprus court is required before disclosure.
Although the appointment of local board members is not required by law, however, for tax purposes, it is considered desirable. It should be noted that, from a tax point of view, is essential that the company is managed and controlled in Cyprus, which is why it is recommended that the majority of directors are local residents.
According to the current law, the company must have a secretary named.
Become Cyprus Tax resident
with a Cyprus Company
Cyprus company
registration procedure
The Registration process of a company in Cyprus can take up to 10 days to be completed. Usually is done in 7 days. Operations can start immediately.
The annual obligations
of Cyprus company
To ensure compliance with Cypriot regulations, a company must:
- Perform a board of directors meeting at least once per year.
- The company is obliged to keep accounting records and prepare audited financial statements.
- Submit annual reports and Audited financial statements to Company Registrar department.
- Has to be registered to the Tax Department and get a Tax Identification Number.
- Submit the annual return form.
- Pay the yearly tax in three installments.
Cyprus company FAQ
Have all your questions answered here.
For most of the cases is the Cyprus Limited Company LTD with shares.
There is no minimum or maximum limit of the shared capital of Cyprus company?
For Shareholders:
- Name/Surname
- Address of residence or Business address
- Date of birth
- Nationality
- Occupation
- Information related to current or past business activities, source of income and relevant proof (ex. financial reports of shareholder’s current company)
- Number of shares of the shareholder
For the new company:
- Description of the activities of the new company
- Two or three alternative name options for the new company
The procedure can be identified in two stages.
- Company name approval:
In the first stage the company name must be approved. The approval can take 1 to 3 working days. - Memorandum and application for registration
As soon as the name is approved, the memorandum of the new company is prepared according to the activities and operations of the company and is then signed by the shareholders.
The company registration application is submitted online to the Department of Companies Registrar right after the signage of the engagement letters of the directors. The company is formed after 4-5 working days.
The whole registration process takes approximately 6-8 working days.
After the registration, the following documents will be submitted to the owner of the company:
- Certificate of Corporation
- Memorandum and Articles of Association
- List of Owners, Directors, Shareholders
- Certification of company Registered office
- Shareholders certificate
No, you don’t need to be personally in Cyprus to register your company.
Shareholders
Cyprus Limited companies have to state at least one shareholder and cannot have more than fifty (50)
Board Members (Directors/Secretary)
The company should have at least one board member.Board members should be at least 18 years old.
Registered office
A Cyprus company has to state a registered office in the republic, that cannot be a PO Box.
All notifications and notices are sent to the registered office of the company, e.g. letters from the Registrar of Companies, the various registers (e.g. board members, directors, charges, etc.) and other documents are kept, as required and provided for by the Companies Law.
The operations of the company are handled by the advisors – who exercise all the powers of the company with the exception of the powers that either the Companies Law or the company’s Articles of Association require to be exercised by the company in a general meeting.
The directors of the company are legally responsible for the management of the company, and for keeping the accounting books which are mandatory for the preparation of the annual financial statements. At the same time, the directors are responsible for the submission of the company’s tax declaration and the execution of all operations related to the submission and payment of the imposed tax.
The company secretary shall be appointed by the directors for a period, remuneration and terms as they may think fit.
It is noted that the board members and the secretary are responsible for the submission of the relevant documents and notes regarding the updating of the company on the Companies registry.
A.Registration in Tax Department and issuance of Tax Identification Number within a month.
B.Registration of the company in the UBO registry (Ultimate Beneficial Owner) within a month.
Α. Company Registrar
Every company registered in the Cyprus Registry of Companies must, by the end of the year 31/12, submit the audited financial statements, the annual report and pay the fee of €20.
A company that fails to submit its annual report on time is subject to a one-time monetary charge of fifty euros (€50) and to a further monetary charge for each day of the continuation of this violation up to the maximum total amount of five hundred euros (€500).
Β.Tax Department – Regulations
Direct Tax
Every Cyprus Registered Company has the obligation to submit a Tax Declaration Form by the end of the financial year (1/1-31/12) within 15 months, i.e. 31/3 of the following year. In practice, however, this applies only to companies that do not have profits. In the event that it has not been submitted on time, there is a fine of €100.
In detail, the tax legislation in relation to the payment of corporation tax obliges companies to pay corporation tax in full by 31/7 of the following year. A grace period of one month is given and therefore the last deadline is moved to 31/8. Profitable companies should complete the audit of the financial statements for the period ended 31/12 by next July within the deadline so that the corporate taxation can be finalized and the repayment made by 31/8.
In the event that the tax balance is paid after 31/8 of the following year, an additional charge of 5% is applied and also a daily percentage charge that varies from year to year.
Above we have referred to the balance of corporate taxation and not the total corporate taxation because each company based on tax legislation should have already paid at least the 75% of the year’s taxation (provisional taxation) by 12/31 of the same year . In cases where 75% has not been paid then there is also a charge of 10% on the total corporate taxation.
Indirect Tax
Submit VAT returns on a quarterly basis if the company is registered for VAT purposes. If the company’s VAT transactions exceed €15,600 in 12 consecutive months, then the company is obliged to register for VAT and submit quarterly returns. Returns must be submitted within 40 days of the end of each quarter according to the VAT certificate delivered to the company’s management – i.e. for the quarter ending 31 March, the submission must be made by 10 May.
Submission of VIES declarations on a monthly basis if the company has transactions with European companies registered for VAT.
Declarations must be submitted by the 15th day of the following month.
Social Insurance Department
When the company has a payroll, monthly payroll reports must be submitted to the social security administration – by the end of the following month.
The company director.
Anyone authorized by the Ultimate Beneficial Owner (UBO) of the company and approved by the company’s Board of Directors.
Our office completes the bank account opening applications and mails them to the shareholders for signature. Upon receipt of the original signed application, a video conference will be held with the bank personnel within 5 working days and then the bank account will be opened.
Usually is in five (5) working days after the receipt of the signed bank account opening application.
The International Financial Reporting Standards – IFRS are followed as for most European countries.
As soon as someone becomes a customer, a dedicated cloud folder is shared along with instructions for the filing of the accounting information.
Taxable profits for all Cypriot companies will be taxed at 12.5%
- Profits from the disposal of equity securities are exempt from taxation
- Profits from a permanent business abroad are fully exempt from corporate taxation under certain conditions
- Dividend income received in Cyprus by a foreign company is fully exempt from tax in Cyprus, under certain conditions
- Interest income derived from commercial activities, including interest related to commercial activities is subject to income tax of 12.5%
- No tax is withheld on dividends and interest paid to non-residents of Cyprus. Also, no tax is withheld on royalties from sources outside Cyprus
- Group tax reliefs apply for companies based in Cyprus
- Reorganizations, mergers, acquisitions and mergers of companies have no tax implications
- Capital gains are not subject to taxation except in the case of the sale of immovable property located in Cyprus
- Extensive network of agreements to avoid double taxation with other countries