Company Registration Requirements in Cyprus

Primary Requirement for Cyprus Company Registration

  • Minimum one Director and Shareholder. Max Shareholder 50 in Pvt Co.
  • No Minimum Share Capital requirement, But standard says 5000 Euros
  • A Local Company Secretary
  • A Registered Office Address in Cyprus
  • A Local Nominee Director and Local Nominee Shareholder to achieve tax residence in Cyprus
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Company Registration Requirements in Cyprus

Cyprus Company Features and Overview

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.

Pre-requisites of Company Incorporation in Cyprus

  1. Your company’s name (you need to have the name approved by the Registrar prior to the actual registration)
  2. Who the shareholders are and what is the share capital
  3. Who the initial board members will be
  4. Where the registered office will be (this doesn’t necessarily have to be the address of any actual offices - it’s more of a correspondence address)

Why open a company in Cyprus?

  1. Reputable jurisdiction, member of the European Union
  2. Clear corporate law and stable tax policy
  3. One of the lowest corporate tax rates in the EU – 12.5%
  4. No legal restrictions on the residence of people who own (shareholders) or manage (directors) a Cyprus company
  5. Extensive network of double tax treaties
  6. No minimum share capital: a Cyprus company can only issue and pay up one share
  7. 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
  8. 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
  9. Redomiciliation: Cyprus companies can continue in another jurisdiction which allows re-domiciliation

Step by Step Guide to Register your Company in Cyprus

Step 1: Choose Your Preferred Business Entity
Firstly, you need to decide which business structure suits your investment. When evaluating the options, we strongly recommend consulting with professionals in the field and people who have undergone the same experience. It will give you a wider perspective and an inside on what you should expect in any of the 3 structures available.

You might need to remember that your choice will impact on the paperwork you’ll have to do, the business’ regulations and the taxes you will have to pay for.
Step 2: Provide a Name and Check If It’s Available
Before setting up the company, you need to pick up a name that represents your business and check if this name is available to use.

You can do so by checking with http://www.mcit.gov.cy/mcit/drcor/drcor.nsf/index_en/index_en?opendocument
Step 3: Draft the Articles of Association
When the structure and name are decided, you will have to draft the Article of Association. This document must include:
# The name of the company
# The purpose of it
# A list of owners
# The ownership structure and how it is divided between them
# People who own a part of the company and the percentage they own.
# The names and personal details of the company's shareholders, partners, officers, and directors as well as their respective rights and duties.
Step 4: Submit Required Paperwork
According to your business structure, you will have to submit certain documents and forms to the Cypriot trade register (maintained by the Department of the Registrar of Companies and Official Receiver)
The red tape may include:
# Official forms such as HE1, HE2, HE3
# A document confirming the reservation of your company’s name
# The Articles of Association.
Other documents related to the company and the identity of the directors or partners.
When all the paperwork is approved, your company is officially established.
Step 5: Open a Bank Account
After that, we suggest opening a separate bank account for your business operations. It is advisable to keep your personal and company finances separate.
A bank account in Cyprus can be opened in 10 to 15 days.
Step 6: Register for Taxation
Two more steps to go! At this point, you will have to register your tax purposes. The Tax Department can help you out with this process.
Remember:
Obtain a VAT number, if you deal in anything subject to the Value Added Tax.
Apply for Social Contribution registration at the Ministry of Labour, Welfare and Social Insurance.
Find out any tax exemptions your company may qualify for and apply for them
Step 7: Check for Necessary Licenses
When a company is specialised in a determined industry, it is subject to tighter regulations from the government. So, if you are in doubt whether you need a special license or not, check with our consultants to make sure you are on the right track and to avoid fines or penalties.

Compliances after Company Incorporation in Cyprus

Annual Renewal and Filing of Return

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.

Financial Statement & Audit

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).

Something about Domestic (onshore) Vs. offshore companies

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.

FAQs
    • Cyprus is considered to be one of the most attractive jurisdictions in Europe to form a limited liability company due to its advantageous tax system. Cyprus holding companies enjoy all the benefits that the low tax jurisdiction has to offer such as full exemption from tax on dividend income, no withholding tax for dividends paid to non-residents, no capital gains tax and one of the lowest company tax rates in Europe of just 12.5%.

      In addition, Cyprus has more advantages such as its corporate laws which are based on the English Companies Act and are in line with EU directives, low incorporation fees and a quick incorporation process. Moreover, Cyprus has a wide double tax treaty network and is currently negotiating for more.
    • There is no legal requirement as to the minimum or maximum share capital of the company.
    • Every company must have a registered office from the day it commences business or within 14 days after its incorporation, whichever is earlier. The registered office is the place where writs, summonses, notices, orders and other official documents can be served upon the company. It is at the registered office where the company’s register of members is kept, unless the company informs the Registrar of Companies of another place.
    • It usually can take up to 10-20 working days to establish a new company in Cyprus.
    • The types of companies in Cyprus are: private and public limited companies, partnership, sole proprietorships or branches of foreign companies. Please contact Our experts to help you understand the particularities of each business type.
    • Every Cyprus Company must have its own memorandum and articles of association. The memorandum contains the basic information of the company such as the company name, registered office, the objects of the company and so on. Care must be taken that the first few object clauses are tailored to the specific circumstances and main business objects and activities of the company.

      The articles specify rules about the governance of the internal management of the company and regulations about the rights of the members (appointment and powers of directors, transfer of shares, etc).
    • Under Cyprus Law, every company limited by shared must have a minimum of one director, one secretary and one shareholder. From a tax planning point of view, it is often required that the company is shown to be managed and controlled in Cyprus and, accordingly, it is recommended that the majority of the directors appointed are Cyprus residents.
    • For shareholders: Full name, Date and place of birth, Nationality, Residential address, Utility bill as a proof of a residential address or passport with registration stamp for CIS countries, Occupation, Copy of passport, Number of shares to be held.

      For directors: Full name, Date and place of birth, Nationality, Residential address, Utility bill as a proof of a residential address or passport with registration stamp for CIS countries, Occupation, Copy of passport, Registered Address.

      The following type of documents of Director/Shareholder be sent via email.
      # Scan in color of notarized valid Passport
      # Scan of notarized Proof of Personal Address
      # Bank Reference Letter
      # CV
      The time frame for the incorporation process is 5-7 working day after we clear our KYC procedure as well as there is no other question from Cyprus Registrar. At the last stage, we need you to send the notarized copy of all above documents to Cyprus for our record.

      The shares may be held by nominees in trust for the beneficial owners without public disclosure of the owners’ identity.

      For more information about nominee service, please refer here
    • There is no legal requirement as to the minimum or maximum share capital of the company.
    • 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.
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