Establishing a Company in Cyprus

Nomad Capitalist // 19/07/2023 07:46

Is Cyprus a Good Place to Start a Business?

There are some undeniable perks of launching a new company in Cyprus.

The corporate income tax rate is 12.5%, one of the lowest corporate tax rates in the European Union.

There are no taxes on dividends.

Cyprus offers more than 65 favorable double taxation avoidance agreements.

The country can play a significant role in your plan if you are eyeing the establishment of an EU residence and a tax residence. As a European Union jurisdiction, Cyprus is not blacklisted. If you start a company in a blacklisted country, this can significantly complicate your tax situation.

As many jurisdictions are scheduling the introduction of global minimum taxes, we predict Cyprus will become increasingly popular as the CIT rate is on the borderline with the regulation.

The Cyprus passport is ranked among the world’s ten most powerful passports.

There are many tax incentives, such as the following:

• 0% tax on any revenues from trading in securities such as shares etc
• 0% tax for all profits from the sale of real estate abroad
• 0% tax on dividends paid out to the shareholders, as frequently as you like
• 0% tax on any dividends paid to it by any other company in which it holds shares
• 0% stamp duty on many occasions
• 0% tax on profits of permanent establishments abroad, such as hotels, casinos, restaurants, factories, etc
• 0% tax on any income from selling its shares
• 2.5% tax on IP rights.

What Are the Requirements to Set Up a Company in Cyprus?

Don’t let red tape stifle your dream.

We are here to talk and walk you through the bureaucratic obstacle course that awaits you.

You may want to establish a public limited liability company in Cyprus.

Or you can establish a representative office of a parent company in Cyprus.

You may be considering starting up a private company.

There are certain stages to Cyprus company formation, and we will outline them below.

Cyprus Company Incorporation Process

• Check and reserve the name through the Department of Labour which will take 2-3 business days
• Fill out the forms for the incorporation of this limited liability company, including a registered office address, and submit them to the Register of Companies
• Attach the scanned first page of your ID or passport, along with the occupation and complete addresses of the shareholders, director, and secretary and corporate documents stating the purposes and activities of the company and the amount of subscribed share capital
• Company law dictates that a private limited liability company must have between one and 50 members, but there is no minimum share capital for a private company limited by shares
• The minimum share capital for a public company limited is €25,629
• You can assign a nominee shareholder, secretary, and director, by signing an agreement with them that explains precisely that the nominee director, secretary, and shareholder have no financial interest in the private limited liability company and are willing to serve only based on this agreement
• Once the company is incorporated, the bank account must be opened
• The Bank of Cyprus is not the quickest, and it can take around four months to set up a corporate bank account, so consider alternatives such as Hellenic Bank, Astrobank, and Alpha Bank
• In the meantime, local lawyers licensed by the Cyprus Bar Association can apply for a social insurance number and a self-employment certificate for you
• When all of this is done, make an appointment in the Civil Registry and Migration Department to apply for the yellow slip, so called because this registration certificate is printed on yellow paper.

Corporate Bank Account Opening

Foreign investors need to make an appointment with the Bank of Cyprus and present the following documents to complete Cyprus company formation:

• Copies of the bio page of all passports from shareholders, beneficial owners, directors, and secretaries
• Copies of CVs from shareholders, beneficial owners, directors, and secretaries
• The planned activities of the company, whether it be a representative office or a separate legal entity, which are required by company law
• Utility bills for all the company’s directors
• Names of all the signatories for the bank account.

Cyprus Company Start-Ups FAQ

What Are the Costs of Company Formation in Cyprus?

Company registration for new limited liability companies comes at a price in Cyprus. Here is the outlay a registered company will need to pay:
Registration of a new company: €1,300
Opening of a bank account: €700
Nominee Director fees: €400
Nominee Secretary fees: €400
Registered office fees: €400
Nominee Shareholder fees: €400.