Cyprus has a modern offshore legislation, a stable jurisdiction and the lowest corporate tax rate in Europe (10%). With these advantageous conditions, one of the business opportunities in Cyprus are the subsidiary companies, which represent entities that are owned and managed by a parent company that oens more than 50 % of the shares.
The subsidiary company will operate as an extension of a foreign company in Cyprus, however, it will have full autonomy in running its operations. The subsidiary company is registered as any other domestic company in Cyprus.
Below, our Cyprus company formation specialists explain how to register a subsidiary here. We can help you through every step of the business registration procedure.
Those who want to set up subsidiary companies in Cyprus must know that this business structure falls under the Company Law which means it has to respect the same incorporation conditions, requirements in terms licensing, management and accounting like local companies.
The Cyprus subsidiary can be characterized by:
Often, the subsidiary is compared to the branch office and the representatives of foreign companies interested in operating in Cyprus can obtain complete information on both structures from our local consultants.
Opening a subsidiary in Cyprus can be the choice of a foreign investor, considering the benefits he can obtain from the Cyprus policies regarding his protection as a creditor and the taxes system. A Cyprus subsidiary is regarded as a legal entity and must keep its own accounts. The financial accounts and an annual audit report is required by the Companies Act, and have to be submitted to the local Tax Authorities and Cyprus Company Register.
Our experts in company formation in Cyprus created the simple scheme below presenting the main advantages of a subsidiary.
The registration of a subsidiary company in Cyprus can take from 10 to 18 working days and the first step of the process is to choose a name for the company and submit it to the Registrar of Companies to be approved. After you obtain the approval (the answer can take between 3 to 6 working days) the registration process can be continued. The next step is to submit the documents regarding the shareholder’s information and also about board members, the company name and address and its activity, along with a lawyer’s conformity declaration. Our Cyprus company formation experts can help you during the entire process of registering a subsiridary in the country.
When opening a subsidiary in Cyprus, the foreign company must prepare the Cypriot company’s Memorandum and Articles of Association, however, its statutory documents and certificate of incorporation issued by the Trade Register in its home country are also necessary.
When compared to the branch office, it is useful to know that the subsidiary does not need to run under the same name of the parent company like in the case of a Cypriot branch.
The subsidiary will also need to have a registered address in Cyprus, and for this, it must secure a rental agreement for the space used for the address. A virtual office can be used in the initial stage of the company registration procedure in Cyprus. This service can be provided by our agents in Cyprus.
Our Cyprus company formation advisors can assist with the drafting and verification of all documents which need to be prepared upon the incorporation of a subsidiary in this country.
As mentioned above, the subsidiary is treated as any other Cypriot company and this also applies when it comes to taxation. Subsidiaries must register for taxation and VAT with the Cypriot authorities and pay the corporate tax on their worldwide income.
The corporate tax is levied at a 12.5% rate in Cyprus to which the Special Defence Contribution applies. Its rate is 30%.
Cypriot subsidiaries must comply with the accounting and reporting requirements imposed by the local tax authorities, however, they must also submit financial information about the parent company. Subsidiaries are also subject to the value added tax provided that VAT registration has been completed in Cyprus.
If you need information about the accounting and reporting requisites applied to foreign companies operating in this country, our agents can advise you. We can help you open a company in Cyprus, no matter if you are a single entrepreneur or the representative of a foreign company.
As many companies do a lot of research before deciding for a branch or a subsidiary, our specialists in company formation in Cyprus have prepared a list with the advantages and benefits of the subsidiary. Among these are:
The decision of opening a subsidiary can be influenced by various factors and our company formation representatives in Cyprus can help you choose the right business form.
Please contact our Cypriot company formation specialists for further details and perosonalized consultancy regarding the procedures and regulations for subsidiaries establishment in Cyprus.