Since the Accession of Cyprus in the EU in May 2004, Cyprus amended its tax legislation in order to comply with the acquis communautaire. On the 1st of January 2003, the amended tax legislation was enforced. There is no longer a distinction between local and international business companies. For tax purposes, all companies are treated the same and the tax rate of 12.50% is applicable on their net profit.
General information about registration of a company in Cyprus:
Our law firm registers all kinds of companies in Cyprus including public and investing companies. Cyprus is a favourite destination for the formation of international companies because the tax is very low only 12.50% and also Cyprus has entered in 33 double tax treaties with other countries to avoid double taxation. The general effect of these treaties is that Cyprus registered companies that have tax exemptions in Cyprus will have the same exemptions as the treaties countries.
In Cyprus, there is no set time within which the formation of Cyprus company procedure is completed. The actual time taken depends on the existing workload of the registration department of the Registrar of Companies of Cyprus. However, registering a company from scratch usually takes approximately 10 to 18 working days.
The first step in any registration of a Cyprus Company is to give the company a name. A name or names must therefore be submitted to the Cyprus Registrar of Companies for approval. This can take between 3 – 6 working days. Once approval has been received, it is possible to proceed to the next step which is the actual Cyprus company formation. The process of registration of a Cyprus company takes a further 5 to 8 working days.
To start the registration of a company in Cyprus process we require a completed questionnaire to be submitted to us by e-mail together with the following documents:
a) Where the shareholders of the company are natural persons, then in respect of each shareholder the following will be required:
A copy of the passport, preferably scanned, showing the photograph, personal details and signature of the individual.
A document evidencing the shareholder’s residential address. P.O. boxes are not accepted as a residential address.
b) In the case where a corporate body will be a shareholder in the company, then in respect of each corporate body the following will be required:
A copy of the incorporation certificate.
A copy of the certificate showing where the registered office of the company is situated.
* Where the documents are not in English, they should be translated, certified and apostilled.
c) According to the Cyprus Company Law the company that is registered in Cyprus must appoint at least one Director and a Company Secretary, where directors can be either natural persons or corporate entities. In respect of each officer of the company, the following are required:
-A copy of the passport, showing the photograph, personal details and signature of the individual.
-A document evidencing the residential address of the officer. P.O. boxes are not accepted as residential addresses.
-In respect of Directors only, information concerning their profession.
-In respect of Directors only, information as to whether they hold directorships in other companies. A simple “yes” or “no” is sufficient. Where any of the officers of the company is another corporate body, then in respect of each corporate body the following are required:
-A copy of the incorporation certificate.
-A copy of the certificate showing where the registered office of the company is situated.
* In case that the documents are not in English, they should be translated, certified and apostilled
Types of companies in Cyprus
– Exactly like Limited Liability Companies in other countries, in Cyprus this type of company, also called an LTD, can either be public or private, depending on the types of shares and the size of the corporation. Private limited companies do not need a minimum initial capital, but for setting up a public limited company, at least 15,000 EUR are needed. Both types of companies can be registered by one or more shareholders.
– Branch, Subsidiary or Representative Office – these types can either be formed separately from the parent company or as an extension of it in Cyprus. Each structure has its own requirements that have to be fulfilled by the founders.
Incorporating a Private Company Limited by Shares (LTD) in Cyprus
This is the most common type of company used in Cyprus and it is founded by one or more partners, up to 50. The company must have a registered office in Cyprus and a local company director. The shareholders subscribe to shares, monetary or non-monetary, which are given a nominal value and cannot be transferred. Shares can be issued with or without par value. Shares may be issued in legal local currency, the minimum share capital is Euro 500 and the minimum issued capital may be one share. Finally, Bearer shares are permitted
The members of a private company limited by shares are liable to the company’s debts and obligations only to the extent of the nominal value of their shares. In a private company limited by shares, there is no minimum required capital.
Registering a Public Company Limited by Shares (PLC) in Cyprus
The public company limited by shares functions the same as a private company limited by shares, except that shares are freely transferable and there is no restriction as to the maximum number of partners. The minimum share capital of a public company limited by shares is EUR 15000.
A public company is incorporated by submitting the necessary documents and fees to the Registrar of Companies. The documents that must be submitted include a signed memorandum and articles of association of the company (specifying, among other things, the name, objects, nominal share capital and the fact that the liability of members is limited), details of the registered office, names and addresses of the founding members of the company and the number of shares allocated to them, and details of the proposed directors and company secretary. The memorandum of association registers in its objects clauses the activities which the company is authorised to carry on, whereas the articles of association contain the rules governing the internal management procedures of the company. A public company may be established as such or maybe converted from a private limited company by alteration of the company’s memorandum and articles of association.
Establishing a Cypriot Branch, Subsidiary or Representative Office:
Any foreign company is able to set up branch entities in Cyprus. These can be set up as separate entities from the parent company (Cypriot companies having the foreign company as shareholder) or extensions of the parent company in Cyprus. Also, subsidiaries are a usual option in Cyprus Companies.
The formation procedure in Cyprus
Cyprus private companies limited by shares must have a registered office in Cyprus and are managed by a management board. An authorized company representative appointed by power of attorney can perform the registration procedure for a company in Cyprus. It may however be necessary to come in person when the bank account is opened in order to sign some papers and provide the registration certificate and identification documents of the managers.
VAT registration is only necessary for the companies that perform activities that are subject to the Value Added Tax, such as trading.
A new Cyprus company has to hire employees. Recruitment is not a difficult process if you collaborate with job websites and recruitment agencies, especially since the workforce in Cyprus is so well-trained. The average monthly salary is rather high in Cyprus and an employee earns approximately 1,800 EUR.
Important facts about Cyprus Companies
– The standard corporate tax rate for companies that are registered in Cyprus is 12,5%, one of the lowest in Europe.
– The standard VAT rate is 19%, but there is a reduced rate of 8% and 5%. There are also some services and goods to which a zero VAT rate is applied. The minimum annual turnover that a company must reach in order to be mandatory to register for VAT is 15.600 EUR (or 10251 EUR for the acquisition of EU goods).
– There is no withholding tax on the dividends paid by a Cyprus company to its non-Cyprus resident shareholders and no withholding tax applies on dividends received from EU subsidiaries.
OUR SERVICES FOR CYPRUS COMPANY FORMATION
Andreas Danos Law Firm is a very experienced firm in Cyprus company formation. We offer high standard services and we are dedicated to doing everything possible to satisfy the Cyprus company formation needs of our clients.
We have many optional services from which a client may choose. Among the options, we have available for immediate use, offshore shelf companies including aged/vintage companies. None off the shelf offshore corporations have ever been in use and never held a bank account. In other words, these companies are all 100% tax-free, clean and ready to open an offshore account of your choice.
We also offer nominee services, where directors or shareholders/members are provided by OCH which means your name is not on official offshore corporate documentation or Government records, but you do retain full control over the offshore company via Declaration of Trust and Power of Attorney.
When you decide on Cyprus Company incorporation, you need to complete the online questionnaire form. While you are filling this uncomplicated form, you will find a wide range of investment, offshore business and offshore checking accounts along with other offshore services from which you can choose, to add to your offshore formation package.
We will provide you with an easy and low-cost Cyprus Company incorporation and help to protect your assets and enjoy offshore banking.
Time of formation of a Cyprus Company
Registration of a Cyprus company takes 3 weeks.
Corporate Structure of a Cyprus Company
- Only one director required – can be an individual or corporate
- Only one shareholder required – can be an individual or corporate
- A director can be a shareholder and vice versa
- No requirement for Cyprus residency for shareholder(s)
- A secretary is required – can be an individual or corporate
Confidentiality and Privacy
- Nominee services are permitted
Capital Structure of a Cyprus Company
- Shares can be issued with or without par value
- Shares may be issued in legal local currency – Euro
- The minimum share capital is Euro 500
- The minimum issued capital may be one share
- Bearer shares are permitted
The Cyprus Company formation package includes:
- First year government filing fees
- Certificate of Incorporation
- Memorandum and Articles of Association
- Nominee shareholder details (if required)
- Share Certificates
- Register of Shareholders
- Register of Directors
- Registered office, (first year)
Suite 703, Nicosia Tower Centre
36 Lord Byron Ave
1096 Nicosia, Cyprus
Tel. +357 22 66 44 33
Fax. +357 22 67 26 44
Suite 117, Profiti Hlia 2,
4046 Limassol, Cyprus
Tel. +357 96 26 19 72
4F, Block A, EAC
No 18, Jiao Gong Road
Hangzhou, P.R China 310007
Tel. +86 571 281 388 15
Mob. +86 139 671 810 81
Fax. + 86 571 281 38 800