Company Registration In Cyprus in 2023-24
Cyprus, an island in the eastern Mediterranean Sea, has a rich mineral heritage, and wines of the finest quality, and is known for its excellent geographical location. The country is recognized for its high-income sectors and for providing international entrepreneurs with a business-friendly climate and low corporation tax rates as it advances gradually.
In accordance with the 2020 World Bank Ease of Doing Business Index, Cyprus is ranked in the 54th position. The shipping sector, one of Cyprus’ most important economic sectors, receives the highest amount of Foreign Direct Investment and contributes 7% of the country’s GDP. This demonstrates how successful Cyprus company registration can be for an entrepreneur.
This article will discuss how an entrepreneur can register a company in Cyprus. It will go over the procedures, required paperwork, prerequisites, and benefits of company registration in Cyprus.
Why register a company in Cyprus?
- Cyprus is one of the most popular tourist destinations in the Mediterranean and all of Europe, a major shipping hub, with a booming real estate market and plenty of potential for expansion in the financial sector.
- Approximately 55 double taxation accords have been signed by the Cypriot government with over 47 other nations.
- Cyprus has the lowest rate of taxation in the European Union, which is 12.5%.
- Cyprus has a corporate-friendly tax structure that assists local enterprises in a variety of ways.
- The judicial structure in Cyprus is robust and well-established. It is a common-law country with commercial laws that are comparable to those in the UK.
- The nation has an excellent telecommunications network and modernized infrastructural facilities.
Procedure for company registration in Cyprus
Here are the steps to register a company in Cyprus:
Propose a business name
Applying for a business name is the first step of Cyprus company registration. It is essential to propose business names that are unique and different. Names that are identical or close to those of already-existing corporations as well as names that reflect unlawful activity may be rejected by the Companies Registrar.
Choose the business structure
The second step of company registration in Cyprus is to choose the legal form of the business.
Maintain a registered office address
It is essential for the firm to have a registered office location in Cyprus. All the legal documents and records are maintained in the registered office.
Prepare the documents
It is essential to prepare the documents such as the memorandum and articles of association before submitting an application for company registration in Cyprus.
Apply for company registration with the Registrar of Companies
You must submit an application for Cyprus company registration to the Registrar of Companies with the necessary supporting documentation.
Acquire the Certificate of Incorporation
The incorporation would be recorded in the official gazette following document verification, and the registrar would provide the Certificate of Incorporation if all the paperwork were legitimate and approved.
Documents required for Cyprus company registration
In order to register a company in Cyprus, the following documents are necessary:
- Memorandum of Association of the firm
- Articles of Association of the firm
- Information on the firm’s intended director, stockholder, and secretary
- Registered office address proof
- Company name authorization consent
- The nominal share capital and its distribution
Eligibility criteria for company registration in Cyprus
Here are the eligibility criteria to register a company in Cyprus:
- Directors- A minimum of one director, who might be from any country, is needed to incorporate a limited liability company.
- Shareholders- At least one shareholder is required to register a company in Cyprus.
- Registered Office Address- The business must have a physical address in Cyprus, where notifications related to the firm can be given and where other pertinent records are kept.
- Corporate Secretary- Every business in Cyprus must employ a corporate secretary.
- Audit- Cyprus enterprises are required to undergo a yearly audit by an auditing company in accordance with the International Accounting and Auditing Standards.
- Annual general meeting- Every Cyprus corporation is required to hold a minimum of one annual shareholder meeting within 18 months of its formation.
Post-incorporation requirement by businesses in Cyprus
- Value-added tax enrollment: Enroll for value-added tax if the total amount of taxable merchandise transactions during the previous 12 months exceeded € 15,600.
- Register with the Tax Authority: All businesses must enroll with the Tax Authority in order to receive a tax identification number and a VAT enrollment number.
- Corporate Regulations: Any modifications have to be reported to the Registrar of Companies. By the last day of June of every year, an amount of EUR 350 is required to be submitted.
- Register trademark
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Different company structures to register a company in Cyprus
This section of the article will describe the various company structures to register a company in Cyprus.
1. Limited Liability Company
The most preferred type of corporate organization amongst international entrepreneurs is a Limited Liability Company. It is a distinct legal organization from its proprietors. A limited liability company (LLC) shields the company’s stockholders and directors from its obligations. There is no minimum required capital for a Limited Liability company registration in Cyprus and it can be done with just one shareholder, one director, and one corporate secretary. It is not necessary for the directors and stockholders to be residents of Cyprus.
2. Branch Office
International corporations who want to conduct commercial operations in Cyprus can establish a branch office of their organization. Being only an extension of their parent corporations, branch offices are less expensive and simpler to operate. There is no requirement for a minimum amount of capital for a branch office establishment in Cyprus, however, a resident representative must be chosen to represent the firm.
3. Free Zone Company
The sole special economic zone in Cyprus, the Larnaca Free Zone, allows international entrepreneurs to incorporate their businesses. The benefits of this zone include subsidized industrial premises and good industrial infrastructural facilities. Additionally, transactions made from the Free Zone can take advantage of deferred VAT payments on products imported into the European Union and exclusion from VAT on goods coming from outside the European Union that are in transition.
4. International Trust
International trusts are primarily employed for tax preparation purposes by non-resident settlors and beneficiaries since they allow for total overseas ownership and do not impose any income or estate taxes. Nevertheless, Cyprus must be the permanent residence of at least one of the trustees.
Advantages of Cyprus company registration
Here are the numerous advantages of Cyprus company registration:
1. Facilitates global trade
Due to Cyprus’s geographic location amid Europe, Asia, and Africa, the nation typically presents itself as a gateway for global trade or a link connecting the Eastern and Western globe. This gives it easy access to the marketplaces of such nations. Cyprus’ membership in Europe also enables it to act as a route into the larger marketplace of the European Union.
2. Highly educated employees
English is spoken by more than 70% of the citizens in Cyprus. In the EU, Cyprus has the greatest proportion of residents between the ages of 25 and 35 who hold tertiary degrees. It follows that the island has competent public sectors and excellent service operators of all sorts that can assist you in starting your business in Cyprus.
3. Tax Incentives
Cyprus, where the normal rate of 12.5%, has one of Europe’s lowest corporate tax rates. Also, there is no capital gains tax levied by the government. A vast network of agreements preventing double taxes benefits local businesses.
4. Favorable legislation for investors
Cyprus’s laws are favorable to investors for the reasons listed below:
- All Cyprus-based entrepreneurs are given the chance to become citizens. Citizenship in Cyprus comes with all the advantages of European Union citizenship.
- According to Cypriot legislation, entrepreneurs are permitted to maintain their identity and hold their assets in an international trust.
- Dividends paid out and received are completely tax-free.
Taxation in Cyprus
Paying the different business taxes is required if you register a company in Cyprus. As such, it is essential for an entrepreneur to enroll with the tax department in Cyprus.
The many business taxes that corporations in Cyprus are required to pay are listed below.
- Corporate Income Tax: All corporations must pay corporate income tax at the normal rate of 12.5%, regardless of whether they are domestic or foreign businesses.
- Value-Added Tax: The normal VAT rate in Cyprus is 19%. However, lower VAT rates of 9% & and 5% are also applicable.
- Capital gains tax (CGT): Only gains associated with immovable assets located in Cyprus are liable to CGT when the disposal is not liable to CIT.
Filing annual returns in Cyprus
Every firm that has been enrolled in Cyprus is required to compile financial statements yearly in accordance with IFRS and have them audited by a qualified unbiased certified auditor. Any business in Cyprus is required to submit its yearly return and audited financial statements to the Registrar of Companies within 18 months of the date of establishment.
They must be submitted yearly after that. Additionally, the Income Tax Department receives the Audited Accounts. The financial report must be submitted to the registrar within 14 days after the firm’s yearly general meeting, which could not be more than 15 months after the date of the preceding annual return.
Cost for company registration in Cyprus
The expenditures associated with Cyprus company registration are one of the most important factors that must be considered while incorporating a firm in a country.
Business registration cost– Professional charges and disbursements cover the costs associated with company registration in Cyprus. The costs normally range between €650 and €1000.
Registered office cost- For the registered office, a yearly charge of €250 is required.
Registrar of companies expenses- The search and issuance of certificates are subject to fees from the Registrar of Companies. Based on the kind of certificate that is needed, different prices apply. Acquiring a Certificate of Incumbency may cost approximately €125.
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Cyprus’ strategic location between Europe, Asia, and Africa makes it a wonderful place to conduct business. Cyprus acts as a gateway into the European Union marketplaces. Additionally, the country has enticing government initiatives to draw in foreign direct investment and has one of the lowest corporation tax rates of 12.5%. Cyprus ranks as the 42nd least corrupt country in the world according to Transparency International’s 2020 Corruption Perception Index, earning a satisfactory result. Cyprus company registration can be done easily if the correct procedures are followed.
You can speak with our business formation expert at Odint Consultancy if you wish to incorporate a company in Cyprus. At Odint Consulting, we are proud of our team of highly skilled and experienced professionals who specialize in building and setting up companies in Cyprus. With a deep understanding of local laws, procedures, and requirements, our experts ensure a smooth and successful program for our clients. We go beyond just helping out; We offer comprehensive local support throughout the professional planning journey. From initial discussions to navigating the complex company registration and legal and regulatory process, we guide our clients every step of the way. Our in-depth knowledge of the local industry allows us to provide valuable insight and tailor our services to meet everyone’s needs.
- Cyprus is a fantastic destination to conduct business because of its advantageous location between Europe, Asia, and Africa. Cyprus serves as a point of entry into the markets of the European Union.
- The nation also offers attractive government programs to entice foreign direct investment and has one of the lowest corporation tax rates in the world at 12.5%.
- In accordance with the 2020 World Bank Ease of Doing Business Index, Cyprus is ranked in the 54th position. These are the conditions that make Cyprus as the best place to launch a business.
Business registration costs normally range between €650 and €1000.
Yes, a foreigner can open a branch office or any other form of legal entity in Cyprus.
The normal corporate tax rate in Cyprus is 12.5%.
Filling out an application and submitting it to the Registrar of Companies along with the required paperwork will register a company in Cyprus.
- For a corporation to be registered in Cyprus, there must be a minimum of one shareholder, 1 director, and one company secretary.
- Along with that, it is essential for the firm to have a physical address in Cyprus.
- Facilitates trade- Due to Cyprus’s geographic location amid Europe, Asia, and Africa, the nation typically presents itself as a gateway for global trade or a link connecting the Eastern and Western globe.
- English-speaking population- English is spoken by more than 70% of the citizens in Cyprus.