Cyprus Company Formation

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 favoured 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 procedure of company formation 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.

What is the process of registering a Company in Cyprus?

The first step in any registration procedure of a Company in Cyprus 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 company formation. The process of registration takes a further 5 to 8 working days.

To start the formation process of a Company in Cyprus, we require a completed questionnaire to be submitted to us by e-mail together with the following documents:

1. 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 address of the Cyprus resident shareholder. P.O. boxes are not accepted as a residential address.
2. 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.
3. According to the Cyprus Company Law the company that is registered in the Republic of 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 are another corporate body, then respecting 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

COMPANY TYPES IN CYPRUS

• Exactly like Limited Liability Companies in other countries, this company type, also called an LTD in Cyprus, 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, which can be 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 for the company’s debts and obligations only to the extent of the nominal value of their shares. In such, there is no minimum-required capital.

Registering a Public Company Limited by Shares (PLC) in Cyprus

The public company, which is limited by shares, functions the same as a private one, except that shares are freely transferable and there is no restriction as to the maximum number of partners. The minimum share capital of this kind is EUR 15000.

A 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. May be established as such or maybe converted from a confidential limited company by alteration of the company’s memorandum and articles of association.

Establishing a Cypriot Branch, Subsidiary or Representative Office:

Any foreign company can 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. Furthermore, subsidiaries are a usual option in Cyprus.

The formation procedure in Cyprus

Cyprus private companies, which are limited by shares, must have a registered office in Cyprus while the company is managed and controlled by a management board. An authorised company representative appointed by power of attorney can perform the procedure for the registration of the company in Cyprus. It may however be necessary to come in person when the bank account opening to sign some papers and provide the company certificate of registration and identification documents of the managers.

Choosing and reserving the company name with the Companies Register – this name must be unique, and therefore we advise you to verify at least three names before making the reservation; We can complete your Cyprus company registration in about 8 days.

VAT registration is only necessary for the companies that perform activities that are subject to the Value Added Tax, such as trading.

A new Company requires employees to be hired. The recruitment process is made easier by collaborating 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, as an employee earns approximately 1,800 EUR.

Important facts about Companies in Cyprus

• 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 company to its non-Cyprus resident shareholders, and no withholding tax applies on dividends received from EU subsidiaries.

Our Services for Company Registrations

Andreas Danos Law Firm is a well-experienced firm in company formation in Cyprus. We offer high standard services, and we are dedicated to doing everything possible to satisfy the Cyprus company formation needs of our clients.

Cyprus company formation 

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 and help to protect your assets and enjoy offshore banking.