All business organizations in Cyprus must go through the same basic company creation process, which has an easy-to-understand framework. Writing the articles of association and other papers, such as signatures, copies of passports, and other paperwork necessary for establishing a Cypriot business, are all part of registering a business in Cyprus.
In addition, prospective business owners may have to create a bank account, search for a suitable location for their company, and consult a public notary in the area. In addition, it is possible that a Cypriot accountant will be required to launch a new company.
Cyprus’s offshore business
The limited liability company is another legal structure that foreign investors may use to establish offshore companies in Cyprus. The Cyprus offshore company will be founded by the same procedure used for registering regular companies, but all of its activities will have to take place outside of the country.
The Cyprus offshore company provides a variety of benefits, including those listed above:
- It can be established as a holding company, with its primary function being the management of assets in other Cypriot companies;
- it can also be established as a trading company, but as mentioned above, its goods and services must be provided outside of Cyprus;
- and it provides enhanced privacy protection to its shareholders.
- It will benefit from lower tax rates and will be subject to one of the lowest corporate taxes in Europe.
Cyprus company creation procedures
|Cost of registration||The cost of the second year||Number of Directors||Corporate tax rates||Payment of Charter Capital||Financial statements|
|1770.00 EUR||1760.00 EUR||1||12.50%||No||Yes|
Regardless of the choice of business structure, the following procedures must be followed in order to incorporate a company in Cyprus:
- Selecting and register new company name with the Companies Register;
- Drafting and notarizing the Articles of Association, which serve as the company’s statutory papers;
- Submitting the Trade Register with the aforementioned information and papers, receiving their approval, and receiving the company’s Certificate of Registration;
- Registering with the tax authorities to pay taxes, receive a VAT number, and register for social security;
- Depending on the sector the Cypriot company will operate in, asking for various specialized licenses or authorizations.
Let’s see the requirements and process of registering a company in Cyprus.
- Approval of Company Name
- Submission for registration
- Shareholders and Share Capital
- Registered Address / Office
How long does it take in Cyprus to register a business?
The length of time needed for each activity is another important consideration when beginning the process of forming a business in Cyprus. After being partitioned into their respective:
- 4-5 days for the approval of the company name;
- 1–2 days for the preparation of the company’s statutory documents;
- 5–10 working days for the Trade Register to receive and review the company’s incorporation documents;
- 2–3 working days for tax registration;
- and 1–7 days for social security registration.
The most significant advantage is that all paperwork may be submitted electronically to the Cyprus Trade Register.
Registration for taxes and VAT when starting a company in Cyprus
Image source: Holbornassets
The process of forming a company and the process of tax registration must be completed concurrently since the tax registration procedure is a step in starting a business in Cyprus. However, as signing up for VAT is optional, the process must be completed independently. The Certificate of Registration will be sent together with the tax identification number.
A corporation must register for VAT when its yearly turnover from remotely conducted business in Cyprus reaches or exceeds 35,000 euros, according to the government. Businesses that do business throughout the EU may be given EORI numbers. These numbers are based on the VAT number, streamlining the trading processes.
2020 income tax rates in Cyprus
|Taxable income band EUR||National income tax rates|
|0 to 19,500||0%|
|19,501 to 28,000||20%|
|28,001 to 36,300||25%|
|36,301 to 60,000||30%|
Yes, a foreigner can open a business in Cyprus. There is no restriction for people who want to be self-employed person or start a business in Cyprus.
The cost of registering a corporation in Cyprus is $1995, but will decrease to $1990 in the second year.
Creating a new corporation in Cyprus can often take up to ten business days. If speed is of the essence, shelf firms are available.
The Companies Registrar needs to be provided with the following information:
1. Memorandum and Articles of Association.
2. Directors and Secretary.
3. Shareholders and Share Capital.
4. Registered Address / Office.
5. Incorporation of a company in Cyprus.
– A corporation with limited liability. Either a public limited liability company or a private limited liability company could be involved.
– Partnership (General and limited partnership).
– A location of a foreign business. In Cyprus, it is possible to establish a branch or an overseas office.
The Benefits of Registering an Offshore Company in Cyprus
- Comparatively speaking to other traditional offshore jurisdictions, Cyprus has a far stronger international reputation. It is not included in the global offshore companies’ “blacklist.”
- Cyprus has signed double taxation agreements with 60 different nations.
- International standards are followed when submitting financial statements in Cyprus.
- One of the lowest corporation tax rates in Europe is found in Cyprus.
- Prime cost can be used to describe a variety of expense types.
- Extremely favorable conditions for the growth of holding corporations with their primary activity being the control of assets in other Cypriot firms (there is no consolidation tax, and a controlled foreign company’s activities is not regulated).
- There is no tax on capital gains, dividends from outside the United States, or earnings from the sale of securities.
- The simplicity of the registration process and cheap maintenance costs for the business.
- Trading options with European businesses (obtaining the VAT number).
- Dealing with loans through a Cyprus offshore company is convenient.
- No currency restriction
- If foreign professionals employed by a Cyprus-based offshore firm journey outside the country, they are subject to an income tax of 0% to 2%.
- The successor to the estate who is not a resident of Cyprus is not taxed.
- The opportunity to use minimal service.
- Losses may be carried over to succeeding tax periods to the extent that they are not offset by income.
- Enhanced privacy protections are provided to its stockholders.
What are Cyprus’s primary attractions for international investors?
Cyprus is known for its investment advantages, especially in transportation. Revenue from Cypriot ships isn’t taxed. Ship-owning companies don’t pay dividend taxes.
Cyprus has two international airports, three seaports, and a modern road system. This simplifies export/import.
Cyprus’ cheap operating costs, economic independence, and highly trained local enterprises have attracted foreign corporations and banks.
Beautiful weather, culture, and Mediterranean cuisine bring visitors year-round.