Cyprus company incorporation package
|Company registration including government fees||✔︎||✔︎|
|Registered address for 1 year||✔︎||✔︎|
|Provision of professional shareholder for 1 year||✔︎|
|Provision of professional director for 1 year||✔︎|
|Total cost||1680 EUR||2055 EUR|
|Annual renewal fee||1020 EUR||2020 EUR|
Advantages of setting up a company in Cyprus with us:
You work directly with a licensed Cyprus Administrative Service Provider (ASP), and thus you get:
- fast and efficient service, no unnecessary delays
- best competitive prices – lower cost of incorporation and subsequent annual fees
- highest level of confidentiality and personal data protection – any information and documents provided for incorporation are kept in our files only
- immediate status updates on your orders – we do not have to contact any other person to find out the information
- professional service – we are a group of companies with more than 20 years of experience in the company formation industry
- comprehensive, all-in-one service – with 187 employees working in our 6 offices worldwide (including Cyprus) not only do you get company formation or corporate services in Cyprus, but also legal support, tax planning advice, bookkeeping, preparation and filing of financial statements, translation and other international business services
Why open a company in Cyprus?
Here are just a few reasons why businessmen and entrepreneurs may want to open a Cyprus company for their international business:
- Reputable jurisdiction, member of the European Union
- Clear corporate law and stable tax policy
- One of the lowest corporate tax rates in the EU – 12.5%
- Extensive network of double tax treaties
- No legal restrictions on the residence of people who own (shareholders) or manage (directors) a Cyprus company
- No minimum share capital: a Cyprus company can only issue and pay up one share
- A Cyprus company may have an unlimited number of bank accounts worldwide. Unlike most offshore companies, Cyprus companies are rarely rejected by banks when applying for a bank account
- You can buy a Cyprus shelf company when you do not have time to register a new company in Cyprus. Paperwork can be completed in just a few hours, subject to approval from compliance department
- Mergers and acquisitions: Cyprus companies are allowed to merge with Cyprus or foreign companies, and the surviving company may be located either in Cyprus or in a foreign country
- Redomiciliation: Cyprus companies can continue in another jurisdiction which allows re-domiciliation
Cyprus Private Limited Company
Although Cyprus offers a variety of business organization forms, such as several types of companies and partnerships, as well as branches and even trusts, still the most popular entity to create for business is a Cyprus private company limited by shares, or simply Cyprus Ltd. This type of company is sometimes referred to as LLC.
Cyprus companies may engage in virtually any legal business, but must obtain licences for some regulated activities such as banking, insurance, money lending, or investment advice.
A Cyprus company must have a registered office within Cyprus and appoint a secretary, an individual or a company, resident or non-resident. The minimum number of directors and shareholders in a Cyprus private company is one, and there are no legal restrictions as to their nationality or residence, they can also be either individuals or companies. It should be noted, however, that for a company to be treated as Cyprus tax resident and be able to enjoy all the tax benefits, it is advisable to have a Cypriot majority board – thus you can demonstrate that a company is managed and controlled from Cyprus.
What Information is Public?
The details of directors and shareholders are filed with the Registrar of Companies and are made public. The details of beneficial owners are necessarily collected by every ASP as part of their due diligence and KYC obligations, but are not filed with the Registrar of Companies and do not appear on any public register.
The EU 4th Anti-Money Laundering Directive introduced a requirement for the EU Members States to create a register of beneficial ownership of companies, which in the understanding of the European Commission should be publicly accessible. The 5th Anti-Money Laundering Directive further set a specific deadline for putting such register in place throughout the EU. Member States should set up beneficial ownership registers for corporate and other legal entities by 10 January 2020 and for trusts and similar legal arrangements by 10 March 2020. But so far Cyprus has not implemented the provisions of these Directives into its national legislation and has no public register of beneficial owners.
After you set up a company in Cyprus, it should be renewed on an annual basis. The company must pay the Annual Levy of EUR 350 (with penalties added in the case of late payment) and submit the Annual Return, which is a form containing the details of all directors, shareholders, registered office and share capital.
A Cyprus company must annually prepare audited financial statements and submit them to the tax authorities. Audit is required even for dormant companies (companies that have not had any business transactions in the financial year).
Offshore vs. Resident
Cyprus used to distinguish between domestic (onshore) and offshore companies, where offshore companies were not allowed to trade inside Cyprus but enjoyed a beneficial tax regime. The distinction was abolished from 1 January 2003 in the run-up to the country’s accession to the EU and was replaced by a residence-based system of taxation. Now a uniform corporate tax rate (currently 12.5%) applies to all companies that are Cyprus tax residents. A Cyprus company is considered to be a tax resident if managed and controlled from Cyprus and a non-resident if managed and controlled outside Cyprus. Therefore when the expression “a Cyprus offshore company” is used now, it means a Cyprus non-resident company that is not subject to tax in Cyprus.
Banking in Cyprus
A Cyprus bank account has traditionally been an obvious solution for business banking: no minimum balance, reasonable bank fees, and very few restrictions on the jurisdictions and activities Cyprus banks accepted. Needless to say, companies registered in the “classic” offshore territories such as the BVI, Belize or Seychelles would often have a Cyprus bank account.
Nowadays the banking industry in Cyprus and everywhere else is increasingly under pressure from international organizations to fight money laundering and help ensure transparency of business transactions. In May 2018 the Central Bank of Cyprus issued a circular introducing the concept of “shell companies”, later in November 2018 another circular was released to amend and revise the previous one.
A shell company is currently defined as an entity that:
- has no physical presence or operations in its country of incorporation (other than a mailing address); and
- has no established economic activity in its country of incorporation, little or no independent economic value and no documentary proof to the contrary.
Despite all that, the following circumstances could indicate economic activity:
- the entity is established for the purpose of holding shares of another business entity/ies engaged in legitimate business with identifiable beneficial owners;
- the entity is established for the purpose of holding intangible or other assets (including real estate, ship, aircraft, portfolio of investments, debt and financial instruments);
- the entity is established to facilitate currency trades and asset transfers, corporate mergers as well as carrying out asset management activities and trading of shares;
- the entity acts as a treasurer for companies recognised as a group or manages the activities of the group; or
- any other case where convincing evidence can be provided that the entity is engaged in legitimate business, with identifiable ultimate beneficial owner(s).
Apparently, banks will review each case individually and there are no universal recipes to open or keep a bank account.
In the recent years the laws of many countries have been substantially amended in an effort to increase transparency of international business and close down on tax evasion and treaty shopping. Key offshore jurisdictions, such as BVI, Belize and Caymans, were particularly affected by the coming into force of the economic substance legislation. The scope of economic substance varies from jurisdiction to jurisdiction, but generally the requirement is that the company be physically present in the country of incorporation (have physical premises, hire staff, be managed and controlled from the jurisdiction etc).
Creating minimum substance in the country of the company’s incorporation will, on the hand, make it compliant with local laws and, on the other, increase its chances of opening or keeping a bank account. We provide legal and tax advice on restructuring your business to make it compliant and offer services of creating substance – both in the countries where we have offices and in others.
|Total area||9.250 sq. km|
|Corruption perceptions index rank||29|
|Government type||Presidential republic|
|Executive branch||Council of Ministers appointed jointly by the President and Vice President|
|Legislative branch||Unicameral parliament: House of Representatives (80 seats; 56 assigned to the Greek Cypriots, 24 to Turkish Cypriots, but only those assigned to Greek Cypriots are filled; members are elected by popular vote to serve five-year terms)|
|Judicial branch||Supreme Court (judges are appointed jointly by the President and Vice President)|
|GDP per capita rank||37 (2012)|
|Shelf companies permitted||Yes|
|Legal system||based on English common law, with civil law modifications|
|Incorporation timescale for a turnkey company||10 to 30 working days|
|Cyrillic alphabet permitted in company name||No|
|Local registered office||Yes|
|Types of entity||Private company limited by shares, Exempt private company, Public company limited by shares, Company limited by guarantee, Branch of overseas company, General partnership, Limited partnership, Sole Proprietorship, Trust|
|Incorporation timescale for a new company||15 to 25 working days (3 to 6 working days with payment of acceleration fee)|
|Company suffix||Limited; Ltd.|
|Sensitive words||Asset Management, Asset Manager, Assurance, Bank, Banking, Broker(s), Brokerage, Capital, Credit, Currency(ies), Custodian(s), Custody, Dealer(s), Dealing, Deposit(s), Derivative(s), Exchange, Fiduciary(ies), Finance, Financial, Fund(s), Future(s), Insurance, Lending, Loan(s), Lender(s), Option(s), Pension(s), Portfolio, Reserve, Savings, Security(ies), Stock, Trust, Trustees|
Shares and share capital
|Minimum authorized share capital||No|
|Minimum issued share capital||1 share|
|Minimum paid share capital||No requirements|
|Authorized capital payment deadlines||No requirements|
|Bearer shares permitted||No|
|Issued capital payment deadlines||Immediately upon issue or according to the terms of issue specified in the relevant resolution|
|Standard authorized share capital||1000|
|Standard par value of shares||1|
|Shares with no par value permitted||No|
|Min. rate for corporate tax||12.5%|
|Capital gains tax||0-20%|
|Withholding tax||dividends – 20%, interest – 30%, royalty – 10%|
|Corporate tax (in detail)||12.5%|
|Capital gains tax. Details||Profits from buying and selling shares are exempt from tax. Furthermore, there is no capital gains tax except for the 20% capital gains tax applying on gains accruing from disposal of immovable property held in Cyprus and shares in non-listed companies, which own immovable property in Cyprus.|
|VAT. Details||VAT is imposed on the sale of goods and provision of services, as well as on the importation of goods into Cyprus from outside EU. Cyprus VAT legislation provides for three rates: the standard rate 19% (effective as of 14 Jenuary 2014) and the reduced rates of 9% and 5%. VAT registration is compulsory where total sales of goods and/or services in Cyprus exceed EUR 15,600 in any period of 12 months.|
|Other taxes||Special defence contribution tax, Immovable property tax, Social insurance contributions, Social Cohesion Fund contributions, Motor vehicle tax, Import and excise duties, Immovable property transfer fees|
|Government fee||Yes, but exemptions apply|
|Requirement to file accounts||Yes|
|Publicly accessible accounts||Yes|
|Requirement to file Annual Return||Yes|
|Publicly accessible Annual Return||Yes|
|Requirement to prepare accounts||Yes|
|Double tax treaties network||61|
International law relations
|Party to the Hague Convention (Apostille)||Yes|
|Legal system||based on English common law, with civil law modifications|
|Double tax treaties network||61|
|Offshore/onshore status according to the RF laws||Yes|
|Tax treaties entered||Armenia, Austria, Bahrain, Barbados, Belarus, Belgium, Bosnia and Herzegovina, Bulgaria, Canada, China, Czech Republic, Denmark, Egypt, Estonia, Ethiopia, Finland, France, Georgia, Germany, Guernsey, Greece, Hungary, Iceland, India, Iran, Ireland, Italy, Jersey, Kuwait, Latvia, Lebanon, Lithuania, Luxembourg, Malta, Mauritius, Moldova, Montenegro, Norway, Poland, Portugal, Qatar, Romania, Russia, San Marino, Serbia, Seychelles, Singapore, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Syria, Tajikistan, Thailand, Turkmenistan, Ukraine, United Arab Emirates, United Kingdom, USA|