Cyprus is an independent island nation located in the eastern Mediterranean Sea. The country has been a member of the European Union since 2004. This, together with a favourable tax regime and a developed network of double tax treaties, has made Cyprus one of the top destinations for foreign investors.
Cyprus is a stable presidential republic with long-standing democratic traditions and English common law regulating business and commerce. Although there is a territorial dispute in the north, where Cyprus jurisdiction is not recognised, the country is very successful in attracting foreign investment.
A robust financial sector coupled with a stable political climate make Cyprus an ideal place to establish international businesses. Setting up a company in Cyprus can be a perfect choice to stabilise and grow your business, as well as preserve your assets.
A favourable tax regime and a comprehensive network of double tax treaties are the main benefits of incorporating in Cyprus.
The Cyprus company tax rate is one of the lowest in the EU. At 12.5%, the corporate tax rate in Cyprus is considered the third lowest in the EU.
To take advantage of the low tax benefits, a company needs to have its tax residency in Cyprus. To this end, the majority of the board or the sole director of a Cyprus company must also be a resident in Cyprus. Usually, this can be achieved by employing the services of a local Cypriot director.
On the contrary, a Cyprus offshore company whose principal management is based abroad is deemed to be non resident. In such a case, the Cyprus non resident company pays its taxes in the location of the directors and is exempted from Cyprus tax.
Participation exemption and a vast network of double tax treaties are among the benefits of registering a company in Cyprus.
At present, Cyprus has around 60 double tax treaties signed with other countries, such as the US, China, South Africa, Singapore, Russia, India and the UK.
One good reason to incorporate Cyprus company as a group holding is that the dividends received from subsidiaries are not subject to corporate tax in Cyprus. This applies to both an overseas subsidiary or another Cyprus resident company, subject to certain requirements being met. There is also no withholding tax on interest and dividends paid to foreign shareholders of a Cyprus company.
The main currency in Cyprus is the euro, and there are no exchange control restrictions. Furthermore, Cyprus is a member of the Single Euro Payments Area (SEPA), where it is possible to transfer money within just two working days.
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The legislation of Cyprus is based on English common law and equity principles.
The court of final appeal is the Supreme Court of Cyprus.
Cyprus company incorporation is regulated by the Cyprus Companies Law (Cap 113). On account of British influence, company law in Cyprus is largely based on the English Companies Act 1948.
After joining the EU in 2004, the Cyprus international business company was abolished. Furthermore, the country did away with its 0% tax offshore jurisdiction and became a reputable member of the European Union’s single market, complying with all modern requirements. After switching to the onshore tax system, the IBC legal form was replaced by the classic limited liability company.
The Cyprus Department of Registrar of Companies and Official Receiver maintains the register of companies in Cyprus. Information about directors and shareholders held in the register is open to the public. Information on the legal status of companies, their registered office, and secretary is also recorded in the registrar of companies in Cyprus, which is freely accessible to the public.
The following laws regulate Cyprus companies and the financial sector:
Cyprus is a renowned, low-tax jurisdiction with an excellent reputation and numerous advantages. These include the sound reputation of being an EU member state and low taxes. A Cyprus limited company is ideal as a holding company due to its zero percent withholding tax rate.
Although the Cyprus business registry information is publicly available, it is fairly easy to set up a privacy arrangement through nominees or a trust.
The formation of Cyprus limited company only takes a few days and is a relatively simple process. Moreover, the level of service in Cyprus is high in comparison to some other jurisdictions. With Astra Trust, it is possible to register a company in Cyprus online without having to be present in person and as quickly as just 1-2 business days.
A Cyprus company search can be ordered as a separate service if more information about a company is required. This may be necessary to substantiate the company’s status and details to the business partners. It is also useful when you want to verify the Cyprus company of your counterparty before an important transaction.
Another advantage is that a Cyprus company formation with bank account is much faster and simpler due to the island’s EU member status. It is possible to open a bank account with both local and international banks in the European Union. Cyprus banks offer a high standard of service with online banking and debit card issuance at all times. More information about opening a Cyprus bank account can be found on our website or from your personal manager at Astra Trust.
A further significant advantage of Cyprus company formation is the possibility of easily obtaining a European Union VAT tax number. Cyprus registration of VAT is much quicker and more straightforward than in other European countries.
According to the Cyprus Companies Law (Cap 113), it is possible to establish company in Cyprus with the following characteristics:
The Cyprus company formation for best prices is possible with Astra Trust. Our team has long-standing relationships with many financial services professionals in Cyprus. This allows us to resolve issues of any complexity successfully.
A Cyprus company is the best option for the following business activities:
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To incorporate a Cyprus company, the following CDD documents are required:
Cyprus company formation fees include the following services:
After setting up a limited company in Cyprus, you will receive the following Cyprus company documents:
Under the Cyprus Companies Law (Cap 113), the name of a Cyprus limited company shall end with the following word or abbreviation:
The proposed company name shall not be similar to that of a pre-existing company. The company shall not have a name that can be classified as undesirable by the registrar of companies in Cyprus.
According to Cyprus company law, there is no limitation on the number of directors of a limited company. Directors can be individuals or legal persons. There should be a minimum of one director, of any nationality and residency. However, the director must reside in Cyprus in order for the company to be tax resident in Cyprus.
Shareholders of the Cyprus company can be of any nationality and residency. Shareholders can be individuals or legal entities.
Nominee services are allowed in Cyprus. Astra Trust can provide nominee services and assist with all corporate matters to ensure that your Cyprus company complies with all tax and legal requirements to carry out business in Cyprus.
The majority of offshore companies incorporated in Cyprus are companies limited by shares. There is no minimum requirement for the issued and paid up share capital. In practice, the amount of most share capital is usually EUR 1,000.
The number of shares issued to shareholders can be any amount, as it is stipulated in the Memorandum of Association of the Cyprus company.
By share capital, companies in Cyprus can be formed as follows:
The Cyprus company register is open and freely accessible for public inspection. This essentially means that anyone can access company incorporation details, information on directors, shareholders, all annual returns and changes in the companies.
Privacy can be ensured through nominee services, which are widely offered in Cyprus. Beneficial ownership privacy can be achieved by setting up an offshore trust or foundation. If you would like to know more about how to register a business in Cyprus properly, contact the Astra Trust team to receive more detailed information.
Since a company that is resident in Cyprus is subject to tax, there are no substance requirements in the country.
However, the validity of different tax planning and business structures can depend on the level of actual business activity in Cyprus. This can apply to multinational companies in Cyprus, as well as to tax structures that can be challenged in the jurisdiction of the beneficial owner’s residence.
For these purposes, Astra Trust provides services for the establishment of substance in Cyprus, including renting of offices and hiring of employees for Cyprus companies.
According to the Cyprus Companies Law (Cap 113), each company shall prepare and file financial statements that give a true and fair view of the company’s financial position, based on International Financial Reporting Standards (IFRS).
The accounting period ends in Cyprus on the 31st of December. However, the directors of a Cyprus company can adopt a different accounting period.
The Cyprus Companies Law also requires all financial statements of Cyprus companies to be audited by an independent auditor. The law makes no exception for small and dormant companies.
Such an audit shall be conducted in accordance with the International Standards on Auditing.
Business Activity Restrictions
Requirements for Directors
Requirements for Secretaries
Requirements for Shareholders