Cyprus Company Incorporation

Since 1992, Feod Group has been providing a wide range of corporate, immigration and legal services in Cyprus and other EU countries.
The company includes accredited Cypriot lawyers

Offices:

Cyprus

Ukraine

✓ Company registration in Cyprus
✓ Bank account opening
✓ Relocation of business and employees to Cyprus
✓ Substance requirements organization
✓ Tax optimization and change of tax jurisdiction
✓ Obtaining a residence permit in Cyprus for the whole family

If you are in Cyprus and you require our advice or support for your case, leave us a request or call the Feod Group office in Larnaca + 357 99 849 525 (WhatsApp)

Cyprus has been developing rapidly in recent years, increasing its potential to attract international investors and entrepreneurs.

Economic and political stability, a progressively developing infrastructure, great weather all year round and the hospitality of the local people, as well as a strong legal and regulatory framework, make Cyprus the destination of choice for many foreigners to move and for business and family.

Cyprus is regarded “The most convenient jurisdiction for European business”.

Why companies register in Cyprus

✓ Legal system of Cyprus
The regulatory framework of Cyprus is based on the principles of English common law and is in line with the laws of the European Union, the requirements of the Organization for Economic Co-operation and Development (OECD), FATF and FATCA, which is understandable and transparent for the operation of international business.
Therefore, Cyprus is not a classic offshore, as was previously believed. Cyprus is not on the “black” lists of the European Union and the OECD.

✓ Cyprus is the center of business and business activity
Cyprus is located at the crossroads of Europe, Asia and Africa, close to trade routes linking these continents.
This strategic location makes Cyprus a business center with many services on offer, including a Cyprus Company allowing you to conduct your business throughout the European Union with an international reach.

✓ Efficient tax regime
The Cyprus tax system offers numerous incentives for both legal entities and individuals (Non-domicile tax status).
– The corporate tax rate is 12.5% and is included in the rating “The lowest corporate tax rates in the European Union”.
– The tax-free minimum income tax is 19,500 euros/year.
– Tax credits for income in the form of dividends, interest income, profits from the sale of securities, etc.
– Network of international agreements for the avoidance of double taxation.

✓ Ease of opening and running a business
The corporate legislation that governs the opening and doing business in Cyprus gives the right to a foreign citizen to start a business in Cyprus, and the registration process takes a minimum of time compared to many EU countries and does not require presence on the island. You can register a company in Cyprus remotely.

✓ Absence of language barriers
The official language of Cyprus is Greek, but almost all residents know and speak English. English is taught in the school, so you don’t have to worry about language barriers.

✓ Skilled workforce
Cyprus has the youngest population in the European Union of skilled and experienced professionals with good education and knowledge of several languages.

✓ Cyprus resident status
Entrepreneurs and investors, as well as their family members, can apply for a residence permit in Cyprus and become a resident of Cyprus under several programs:
– Cyprus Resident Status for Cyprus Company Owners (Business Immigration)
– Residence permit in Cyprus for financially independent foreigners
– The investment program of Cyprus, which is called the “Golden Visa of Cyprus” or “Cyprus Residence Permit for Investment” when buying property from 100 thousand euros in category F or investing from 300 thousand euros in real estate, business and funds – the Fast Track program.

✓ Cyprus is a great place to move as a family with children
When relocating or opening their business in Cyprus, entrepreneurs also consider the island as a place to relax or live with their families. For a short stay or relocation, Cyprus provides a huge number of advantages, some of them:

– The World Health Organization has rated Cyprus as one of the healthiest countries in the Mediterranean.
– Cyprus is also one of the countries with the lowest levels of air pollution in the European Union.
– Cyprus is one of the safest places in Europe to live, with an extremely low crime rate.
– The island has a wonderful climate with more than 300 sunny days a year, an abundance of the best and cleanest beaches in Europe, recreation areas, fresh vegetables and fruits.
– Cyprus has one of the best private education sectors in Europe with a large selection of schools that teach programs in English.
– The real estate market is actively developing and offers both residential real estate, ranging from apartments to villas on the seafront for living or relaxing with the whole family, or for investment purposes.

📌Learn More: Why Cyprus is the Best Choice for Business in Europe in 2024

Key Advantages of Cyprus for International Business and Tax Optimization

Types of Cypriot Companies

The most popular business structures for company registration in Cyprus are:

— Sole Proprietorship This form is suitable if you don’t need to hire employees and can run the business on your own. Income from activities is subject to personal income tax at a rate of 0 to 35%.

— Private Limited Company (LTD) This is the most popular type of company in Cyprus, which does not require a specific minimum share capital. The number of shareholders ranges from 1 to 50.

— Public Limited Company (PLC) This is a joint-stock company whose shares are traded on the open market. This means that anyone can buy or sell PLC shares, and their value is determined by market supply and demand. PLCs must comply with strict rules and regulations set by the Securities and Exchange Commission (SEC).

— Open Joint-Stock Company (OJSC) This type of joint-stock company allows shares to be freely bought and sold by third parties without the need for other shareholders’ consent. OJSCs are the most common form of joint-stock companies in Russia and former Soviet Union countries.

— Branch of a Foreign Company Branches are registered when expanding the parent company and are considered separate structures. The parent company bears full responsibility for all debts of the branch. Having a branch allows for work and residence permits for top employees from the parent company under the Intra Company Transfers program. Intra Company Transfers (ICT) offer a simplified procedure for obtaining a residence permit for managerial and key employees when transferring from the parent company to its branch in an EU country.

— Cyprus Trust A trust is a legal arrangement where the settlor transfers assets (trust property) to the trustee, who is obligated to manage these assets for the benefit of the beneficiary or for achieving a specific purpose under the terms of the trust deed. A Cyprus Trust can conduct business both in Cyprus and abroad.

Main criteria and requirements to open a company in Cyprus

• 3 company name options
The name of a limited liability company in Cyprus must end with Limited or Ltd.

• Description of the activities of the company being opened for the memorandum of association (Memorandum and Articles of Association).

• Legal address of the registered business.
To register a company in Cyprus, you must have a legal address. The legal address can be the address of lawyers, auditors or a registered agent (service company).

• Organization of a real office of the company in Cyprus, in accordance with the requirements of Substance.
There must be a physical office in Cyprus and contact details of the company (telephone, email address).
You can provide a lease agreement for office space in a business center or ownership of commercial property.

• Director responsible for the management of the company.
There must be at least one director, who can be either a resident of Cyprus or a foreigner. At the request of the client, we provide nominee directors. The director of the company must have the appropriate knowledge or necessary qualifications to manage the company and make the necessary decisions.

• Opening a corporate bank account at a local bank
A bank account in Cyprus is an important criterion for certifying that the control and management of the company is carried out in Cyprus and entitles you to enjoy the relevant tax benefits.

• Profile of directors and beneficiaries.
All foreign directors and beneficiaries establishing their company in Cyprus must provide a professional and financial business profile.

• Choosing the Legal Form
• Preparing the Articles of Association
• Submitting the Registration Application
• Company Registration
• Opening a Bank Account
• Appointing Directors
• Obtaining a Tax Identification Number
• Creating a Company Seal
• Acquiring an Operating License

Read more: Step-by-step guide to setting up a company in Cyprus

Company Registration Timeframe

• The company registration process in Cyprus typically takes around 30 days.

Redomiciliation to Cyprus

Changing Domicile

• Redomiciliation involves relocating a company’s registration from one jurisdiction to another while retaining all its assets, rights, and obligations. Business relationships remain unchanged. The company continues to exist but moves its registered office to a new geographical location.

Legal Framework

• Cyprus law permits redomiciliation both to and from Cyprus. The originating country’s legislation must allow for redomiciliation.

Reporting Requirements for Companies in Cyprus

Annual Reports All registered companies in Cyprus must annually prepare and submit the following reports:

Audited Financial Statements

• Prepared by an independent auditor to verify the accuracy of the company’s financial records.

Tax Return

• A document detailing the company’s income and expenses for the previous year, submitted to tax authorities.

Company Returns

• A statistical report provided to the Registrar of Companies, including information about the company’s activities and financial status.

Fiscal Year

• The fiscal year for Cypriot companies runs from January 1 to December 31.

Bookkeeping

• The Cyprus Companies Law requires directors to maintain accurate accounting records to prepare financial statements. These records should accurately reflect the company’s transactions and financial position and include supporting documents such as contracts and invoices.

Auditor’s Rights

• The auditor may request any additional information needed to prepare the financial statements.

VAT Reporting

• If registered for VAT, companies must submit quarterly VAT returns and a monthly VIES report.

Reporting Deadlines

Audited Financial Statements

• Must be submitted to the Registrar of Companies by December 31 of the following year.

Tax Return

• Must be submitted to Cyprus tax authorities by March 31 of the following year.

Company Returns

• Must be submitted to the Registrar of Companies by August 31 of the following year.

Penalties for Late Submission

Fines

Companies failing to submit reports on time may incur fines ranging from €500 to €5,000.

Proper and timely submission of company reports is crucial for regulatory compliance, providing transparency to government bodies, investors, and other stakeholders. This responsibility lies with all Cypriot companies to ensure they adhere to reporting deadlines and requirements.

A company is tax resident in Cyprus if:
– managed and controlled from Cyprus; or
– the company is registered in Cyprus, but managed and controlled from outside Cyprus, provided that the company is not a tax resident of any other country (applies from December 31, 2022).

Companies that are tax residents in Cyprus must pay tax on their worldwide income.
In accordance with the requirements of the Organization for Economic Co-operation and Development (OECD), a Cypriot company can claim all the tax benefits of Cyprus, the Cyprus double taxation treaty, in the event that the company is a tax resident of Cyprus.

Non-resident companies are subject to tax on profits derived from commercial activities carried out through a permanent establishment in Cyprus, as well as on certain types of income received from sources in Cyprus.

BASIC TAXES IN CYPRUS

Corporate tax in Cyprus
Cyprus has a flat corporate tax rate of 12.5%

Value Added Tax (VAT)
It is charged on the supply of goods and services in Cyprus, as well as on the purchase of goods from the European Union and the import of goods into Cyprus.
– Standard VAT rate – 19%
– Reduced rates – 9%, 5%
– 0% on a number of goods and services defined by law, for example, the supply of certain medical goods, most banking and insurance services.

Employer contributions
– 8.8% of the employee’s salary to the Social Insurance Fund.
The rate will increase every five years until it reaches 10.7% on January 1, 2039.
– 1.2% to the unemployment fund
— 2% and 0.5% for social cohesion and learning development funds.
— 8.0% — Vacation fund (exemption from contributions is possible).

Dividends, interest
0% on income from dividends, interest and other passive income, regardless of whether the income is received in Cyprus or worldwide.

Capital gain
Applies only to income relating to immovable property located in Cyprus.
A rate of 20% is charged on income from the sale of immovable property located in Cyprus or from the sale of shares in companies owning immovable property located in Cyprus. The first 17,086 € are tax free.
Capital gains tax on the sale of real estate located outside Cyprus – 0%

📌 READ ALSO:
Cyprus tax resident status and Non-domicile Tax Regime (Non-Dom Status)

Cypriot lawyers of Feod Group accompany their clients relating to the purchase or registration of a business in Cyprus, and provide a full range of services for obtaining a residence permit for the entire client’s family.

✓ company registration in Cyprus ;
✓ services for the preparation of applicants’ documents confirming the source of funds;
✓ assistance in opening bank accounts in Cyprus;
✓ analysis of the corporate structure and issuance of recommendations on tax issues and asset protection;
✓ services for obtaining the status of a tax resident of Cyprus;
✓ real estate services: rent or purchase of residential and commercial real estate, complete verification of the purity of the transaction, preparation of contracts, participation in negotiations with owners or sellers of real estate;
✓ applying for residence permits and representing the interests of clients and their family members;
✓ enrollment services for children in secondary schools and universities in Cyprus.
✓ after moving to Cyprus: business consulting, extension of stay in the country, obtaining a permanent residence permit and citizenship of Cyprus.

LEGAL SERVICES IN CYPRUS

Article author

Anastasia Taran Head of Corporate Services
Ukraine

In 2013, she graduated in law from the National University «Odessa Law Academy» with honors and received a Master of Law degree. Anastasia Taran has experience in international and contract law, as well as corporate and tax law in Europe. Within the framework of Feod Group, she specializes i...

In 2013, she graduated in law from the National University «Odessa Law Academy» with honors and received a Master of Law degree. Anastasia Taran has experience in international and contract law, as well as corporate and tax law in Europe. Within the framework of Feod Group, she specializes in immigration and corporate law of European countries, particularly:

• family and corporate immigration solutions.
• establishing a business in Europe.
• personal and corporate taxation in Europe.
• opening accounts in European banks.
• obtaining a tax resident status.

read more

Why clients choose Feod Group

Since 1992, Feod Group has been providing a wide range of legal, business and immigration services in Europe, the USA and other countries of the world.

The company has accredited western lawyers, experts in various fields of law and jurisdictions of the world.

Having offices in Europe and the USA, Feod Group provides rapid paperwork and maximum customer comfort.

We provide our clients with related services, such as relocation and adaptation abroad, organizing family relocation abroad, enrollment of children in schools and many other services.

Countries where we offer visa and immigration support:

USA

UK

Austria

Germany

Greece

Spain

Italy

France

Monaco

Portugal

Montenegro

Cyprus

Malta

Other countries