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Company Formation Cyprus

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Cyprus Company Formation

Updated on Thursday 09th July 2020

 
Cyprus is one of the most important business centers in Europe thanks to its taxation system, its stable economy and the legislation which favors foreign investors seeking to establish companies here. The company formation procedure in Cyprus is basically the same for all business entities, having a simple and straightforward structure.
 
The procedure of Cyprus company formation includes drafting the articles of association and other documents required for the incorporation of a Cypriot company, such as signatures, passport copies, forms etc. New owners may also need to go to a local public notary, find an office for their company and set up a bank accountA Cypriot accountant may also be required for new business incorporation.
 

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E.R. Team Global Consultants (OpenCompanyCyprus.com) is a trusted member of BridgeWest. They are also part of important organizations, among which the Expat Brifeing web portal and of the HG.org legal website. The CEO of our company, Evgenios Erotokritou is an important member of the Cyprus Bar Association since 1980 and of the Honorable Society of the Middle Temple:
 
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Types of companies described by our Cyprus company formation experts

  • Limited liability company -  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. In terms of share capital requirements, the private limited liability company is not imposed with a minimum amount of money, however, in the case of a public company, the minimum share capital is approximately 25,650 euros.
  • - Foreign companies are welcome to create branch and representative offices, as well as subsidiaries which will operate as extensions of the parent companies in Cyprus. Each structure has its own requirements that have to be met by the founders. Our Cypriot company formation specialists can help you set up one of the business forms presented above.
  • - Partnerships in Cyprus. There are two types of partnerships available for registration in Cyprus – the general and the limited partnership. These are not considered separate business entities from their owners. Both types of partnerships require a minimum number of two participants and a maximum number of 20 participants.
  • - Sole proprietorships in Cyprus. This is the simplest business form available for those who want to operate on their own. There are no share capital requirements in the case of sole traders.
 
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. Other important requirements for setting up a private limited liability company are a local address and a secretary. The shareholders subscribe shares, monetary or non-monetary, which are given a nominal value and cannot be transferred. 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. If you need assistance in opening this type of company, you can rely on our Cypriot company formation agents.
 
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. It must also have at least 7 shareholders. The minimum share capital of a public company limited by shares is 25,650 euros.
 
Setting up a subsidiary, branch and representative office in Cyprus
 
These legal forms are available for any foreign company interested in entering the Cypriot market. 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 popular option of entering the Cypriot market.
 

Documents related to the Cyprus company formation procedure 
 

Both local and foreign investors who want to open companies in Cyprus must prepare the following documents and submit the following information with the Trade Register:
  1. copies after the passports of each shareholder-  these need first to be notarized;
  2. an approval of the chosen company name which must be obtained with the Trade Register;
  3. the Memorandum and Articles of Association of the company (these must also be notarized);
  4. information about the company director(s) and secretary (their identification papers);
  5. a bank statement indicating the deposit of the share capital of the business;
  6. the tenancy agreement or property title indicating the legal address of the company in Cyprus.
Our company formation agents in Cyprus can assist with the preparation of the Memorandum and Articles of Association.

The offshore company in Cyprus
 

The limited liability company can also be employed by foreign investors who want to set up offshore companies in Cyprus. The Cyprus offshore company will be registered by following the same company formation procedure, however, its activities must be completed outside the country.
 
The Cyprus offshore company has many benefits among which:
  • -          it will benefit from reduced tax rates and will be subject to one of the lowest corporate taxes in Europe;
  • -          it can be created as a holding company with the main activity related to the control of assets in other Cypriot companies;
  • -          it can also be created as a trading company, but as mentioned above its goods and services must be offered outside Cyprus;
  • -          it offers enhanced protection to its shareholders from a privacy point of view.
Our company formation advisors in Cyprus can help foreign investors who want to set up offshore companies in this country.
We also invite you to see a short version of the company formation procedure in Cyprus in the scheme below:
 
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The incorporation procedure presente by our Cypriot company formation agents
 

Cypriot private companies limited by shares must have a registered office in Cyprus and are managed by a management board. Foreign investors must appoint a local agent who handles the company formation process 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 compulsory for the companies that perform activities that are subject to the Value Added Tax, such as trading. In case you need to register your company for VAT, our consultants in Cyprus company formation matters can help you.
new company in Cyprus must 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.
 

Company formation steps in Cyprus
 

No matter the chosen business form, the following steps must be completed upon the incorporation of a company in Cyprus:
  1. choosing and reserving the company name with the Companies Register - this name must be unique, therefore we advise you to verify at least 3 names before making the reservation;
  2. preparing and notarizing the company’s statutory documents which are made of the Articles of Association;
  3. filing all the documents and information mentioned above with the Trade Register and obtain their approval and the company's Certificate of Registration;
  4. registering for taxation, obtaining the VAT number and registering for social security purposes with the tax authorities;
  5. applying for various special licenses or authorizations, depending on the industry the Cypriot business will operate in.
 

Costs related to starting a business in Cyprus
 

One of the main aspects related to company registration in Cyprus is related to the costs associated with its setup. From this point of view, we must mention that the costs of registering a company depend on its type and the industry it will operate in.
The following procedures should be considered when speaking about the costs related to opening a company in Cyprus:
  • -          the company name reservation is completed with the Trade Register and is subject to a fee of approximately 30 euros;
  • -          the costs related to the drafting and notarization of the incorporation documents will depend on the public notary;
  • -          the future business owner must also take into account the company registration fee;
  • -          there are no costs related to tax, VAT and social security registration.
The company formation costs of a business in Cyprus are as follows:
  1.  the company registration fee imposed by the Cyprus Companies Registrar is 205 EUR, however, 0.6% of the share capital must also be paid;
  2. the virtual office cost is set at approximately 100 EUR per month with us and it represents one of the cheapest and fastest solutions for a registered office in this country;
  3. the minimum share capital of a private limited liability company in Cyprus is set at 1 EUR, however, the investor chooses the amount of money necessary for the business;
  4. the company registration cost of our local specialists is 1,100 EUR and it is one of the lowest setup fees in Cyprus;
  5. the accounting fees imposed by our local accountants start at around 100 EUR/month and depend on the services sought by clients.
 
Businessmen should also take into consideration the costs related to the opening of the corporate bank account which will vary depending on the bank and the services attached to the account.
 

How long does it take to register a company in Cyprus?
 

Another important aspect related to opening a Cyprus company is the time spent on each procedure. It can be divided into:
  • -          1 day for the company name reservation;
  • -          1 or 2 days for preparing the company’s statutory documents;
  • -          the filing and review of the company’s incorporation documents with the Trade Register will take another 2 days;
  • -          the registration for taxation and social security will be completed in 1 day.
The main advantage is that all the paperwork can be filed electronically with the Cyprus Trade Register.
 

Frequently Asked Questions about Company Formation in Cyprus

 
1. Can a foreigner open a company in Cyprus?
 
Yes. Cyprus welcomes foreign investors in various business fields. The legislation for investments allows foreigners to open the same types of legal entities as national investors.
 
2. What are the types of companies that can be incorporated in Cyprus?
 
The types of companies in Cyprus are: private and public limited companies, partnership, sole proprietorships or branches of foreign companies. Our Cypriot company formation experts can help you understand the particularities of each business type.
 
3. Does the company need to have an office in Cyprus?
 
Yes. A local registered office is needed for a company incorporated in Cyprus. The incorporation documents must be kept at this address. Our Cypriot company formation advisers can offer to businessmen special virtual office packages which include a local address.
 
4. What are the steps for company incorporation in Cyprus?
 
Choosing the right type of company and an available business name, drawing up the company documents and submitting them to the Cypriot Trade Register. After the company is registered, the business owner can start applying for other permits and licenses and register the company for VAT purposes.
 
5. What is the minimum share capital in Cyprus?
 
There are no mandatory requirements for a minimum share capital for a private limited liability company. Our company formation experts in Cyprus recommend that you do deposit an initial capital for your company of approximately 1,000 EUR. The public limited liability company required no less than 25,630 EUR as minimum share capital.
 
6. What are the requirements for opening a bank account in Cyprus?
 
Banks in Cyprus will generally require the company to present its incorporation documents. A bank account can be opened at any bank in Cyprus.
 
7. Do you need special permits and licenses in Cyprus?
 
Yes. Special permits and licenses are needed for some activities. 
 
 
8. What are the taxes for companies in Cyprus?
 
Cyprus has a corporate income tax of 12.5%. Dividends have a taxation rate of 17% unless a double tax treaty applies. Other taxes in Cyprus include capital duty, social security contributions, stamp duty, transfer tax, real property tax. Our specialists in company formation in Cyprus can help you comply with the taxation rules available in this country.
 
 
9. What are the reasons to invest in Cyprus?
 
A good geographical location and advanced infrastructure are why many import and export companies base their business in Cyprus. Moreover, the country has a good tax system, a sound legal and regulatory framework and qualified workforce.
 

Key facts about Cyprus

  • -  Cyprus has one of the lowest corporate tax rates in Europe: 12.5%.
  • -  The standard VAT rate is 19%, but there are also two reduced rates 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.
  • -  Foreign investors have the possibility of setting up holding companies in Cyprus – one of the best tax minimization solutions in this country.

We invite you to contact our team of specialists in Cyprus company formation matters for more details about our services or for a personalized offer.
 
Whenever you need legal services in other European countries, such as opening firms in Malta or forming companies in Switzerland please contact our partners in these countries and they will provide you with the best legal advice and personalized consultancy.

 

Meet us in Larnaca

Call us now at +357 24 656 406 to set up an appointment with our consultants in Larnaca, Cyprus. Evgenios Erotokritou is the CEO of E.R. Team Global Consultants and he will help you open your company in Cyprus as fast as possible.

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