How to open a company in Cyprus?

Today’s global business environment raises several important issues for entrepreneurs, one of which is choosing the optimal jurisdiction for incorporation. In this context, Cyprus is one of the most attractive jurisdictions for setting up a business in Europe. Thanks to its strategic geographical location, loyal tax system, and modernized legal framework, Cyprus not only attracts those seeking an international presence but also becomes an ideal choice for entrepreneurs who value efficiency and favorable conditions for the development of their businesses.

Incorporation of a company in Cyprus doesn’t take much time and has a fairly clear procedure, but you can use the help of a mentor who has experience in this area, understands local legislation, and knows all the pitfalls to make the process quick and easy. Taxus Law&Finance will help you with the company’s incorporation, further support of the company, opening accounts, and many other processes that accompany the activities of any business.

Let’s take a deeper look at the key benefits and procedures associated with the incorporation of companies in Cyprus to better understand why this country deserves your attention.

To begin with, you need to decide on the type of company you plan to start. Cyprus offers entrepreneurs several options:

1. Company limited by shares (Public and Private),
2. Partnership (General and Limited)
3. Sole Proprietorship
4. Branch of a foreign company
5. Cyprus Trust

Each of these types of companies has its peculiarities, but a popular and profitable option in Cyprus, which doesn’t require a certain minimum authorized capital, is a Private Limited Company (LTD).

The main criteria and requirements to open a company in Cyprus (LTD)

1. Have 3 variants of the company name

The name of the company as a limited liability company in Cyprus must end with Limited or Ltd.

2. Description of the activities of the company to be opened for the Memorandum and Articles of Association.
3. Legal address of the business to be registered

To register a company in Cyprus, you need to have a legal address. Taxus Law&Finance will be able to provide you with qualified assistance even in this matter.

4. Organization of a real office of the company in Cyprus, in accordance with the requirements of Substance.

It is necessary that registered companies don’t just exist on paper, but are physically present in the country of registration.

There must be a physical office in Cyprus and the company’s contact information (phone number, email address).

You can provide a lease agreement for office space in a business center or a commercial real estate ownership certificate. This list is not exhaustive, but the main criterion is certainly the management and control of the company in Cyprus.

5. The director is 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.

6. Opening a corporate bank account with an EMI (Electronic Money Institution).

Why EMI?

• Open an account quickly (EMI can provide business accounts in a matter of days, while banks may take much longer)
• Make frequent cross-border or local transactions
• Need a more feature-rich platform to help you manage your money
• Hold multiple currencies
• Make instant transfers
• Sell goods or services online

It is also important to consider tax legislation. Cyprus offers quite attractive tax rates. For example, the corporate income tax rate is 12.5%, which is one of the lowest in the European Union, and the withholding tax rate is 0%. Also, subject to several conditions, the corporate tax rate can be optimized to 2.5% if a Cyprus company makes a profit from the ownership of intellectual property.

Therefore, incorporation a company in Cyprus is an attractive option for many businessmen due to the favorable tax climate, transparent legal system, and opportunities for international business. Opening a company in Cyprus allows you to gain access to the EU markets and other regions of the world while ensuring competitiveness and effective asset management. If you choose Cyprus for company incorporation, it can be a strategic step toward achieving international business goals.

FAQ

Can non-residents register a company in Cyprus?

Yes! In Cyprus there are no residency restrictions for company shareholders, so your company can be incorporated with 100% non-resident shareholders, who can be either individuals or legal entities.

Special tax regime for IP BOX?

Taxes in Cyprus can optimize the corporate tax rate to 2.5% if a Cypriot company derives income from the ownership of intellectual property (IP).

Such a percentage rate is achieved due to the fact that 80% of the income derived from the ownership of intellectual property can be exempt from income tax, while 20% of the IP income is subject to taxation at the standard rate of 12.5%.

The benefits are available provided that the Cypriot company has participated in the creation of such intellectual property rights in Cyprus and its main activity is related to such IP.

Do I need to be present in Cyprus to incorporate a company?

No, physical presence is not mandatory for company incorporation in Cyprus. We can handle the process remotely, facilitating all necessary steps and documentation.

What are the VAT regulations for IT services in Cyprus?

In most cases IT businesses in Cyprus are subject to VAT regulations, with a standard rate of 19%. Although reduced rates of 5% and 9% apply to certain goods and services. IT businesses providing services to customers in other EU member states are also subject to EU VAT regulations.

The downsides to incorporating a company in Cyprus?

• Tax regime: Companies are entitled to a 12.5% corporate tax rate only if they appoint at least one Cypriot resident as a director.
• Substance requirements
• Mandatory audit and Financial statements

How much does it cost to open a company in Cyprus?

The actual cost of incorporating a company in Cyprus depends on a number of factors, including the type of company and the law firm you use to set it up.