A simple guide for registering a company in Cyprus

Summary

Cyprus company registration is a streamlined process that typically takes 8-10 working days, with expedited options available in as few as 3-5 days. Companies in Cyprus are typically used as parent companies and trading companies whether the trading occurs abroad or in Cyprus. Taking advantage of the extensive double tax treaties, Cyprus companies may provide significant tax benefits for businesses. Cyprus corporate tax is 15%, there is no capital gains tax for the sale of shares (unless the company owns land in Cyprus) and there is no dividends tax on non-domiciled individuals.

Introduction to Cyprus Company Registration

Cyprus company registration is a streamlined and efficient process, making it an appealing choice for businesses seeking to establish a presence in the European Union. The country's strategic location at the crossroads of Europe, Asia, and Africa, combined with its favorable business environment, attracts international businesses from around the world.

The process of company registration in Cyprus is overseen by the Registrar of Companies, ensuring that all legal requirements are met. Importantly, only lawyers who are licensed by the Cyprus Bar Association are authorized to prepare and sign the necessary documents for registering a company in Cyprus. This legal safeguard ensures that every company in Cyprus is established in full compliance with local laws and regulations, providing a solid foundation for future business operations.

Benefits of Forming a Cyprus Company

Forming a Cyprus company provides a range of significant tax benefits that make it a top choice for international businesses. Cyprus companies enjoy one of the lowest corporate tax rates in the European Union and benefit from an extensive network of double taxation treaties with over 60 countries, helping businesses avoid being taxed twice on the same income.

The country's robust intellectual property regime offers further advantages, particularly for technology and finance companies seeking to protect and monetize their innovations. With a highly educated, multilingual workforce and a business-friendly regulatory environment, Cyprus is an ideal location for companies looking to expand their international footprint and maximize operational efficiency.

Choosing the Right Business Structure

Cyprus offers several business structures, each suited to different operational needs and levels of liability:

Cyprus limited liability companies are by far the most popular choice for international entrepreneurs, offering a balance of liability protection, tax efficiency, and administrative simplicity.

Approval of Company Name

The first step for registering a company is selecting and applying for a business name. The application for a business name is submitted to the official receiver, who is the authority responsible for processing business name applications and approvals. Name approval is a formal step required by the Registrar of Companies, involving a review to ensure the proposed business name is unique and complies with regulations.

When certain names contain the words "insurance", "banking", "brokerage" and "trustees" require the consent of the Central Bank of Cyprus prior to their registration. The Registrar also prohibits the use of names containing offensive or obscene words, or names that are misleading or deceptive about the company's nature or activities.

Cyprus company names must not infringe upon existing trademarks or intellectual property rights. Conducting a comprehensive trademark search before submitting your name application helps avoid legal disputes and potential financial liabilities. It is important to select a competent legal service provider to assist with the registration process and compliance with local regulations.

Pre-Registration Requirements

Before registering a company in Cyprus, there are several important pre-registration requirements to fulfill. The process begins with selecting a unique company name, which must be approved by the Registrar of Companies to ensure it does not conflict with existing business names. Next, the Memorandum and Articles of Association must be prepared, outlining the company's objectives and internal governance structure.

Establishing a registered office address in Cyprus is also mandatory, as this will serve as the official location for statutory records and correspondence. At least one director and a company secretary must be appointed, and for public companies, a minimum of two directors is required. Businesses may also choose to appoint nominee directors or shareholders for added privacy or administrative convenience.

Submission for Cyprus Company Registration

Once the company name has been approved, the Cyprus Companies Registrar allows the filing of the necessary forms and supporting documentation for Cyprus company registration. The Companies Registrar needs to be provided with the following information and all relevant documents to ensure compliance with legal requirements:

Memorandum and Articles of Association

Every company in Cyprus must have a Memorandum and Articles of Association which describes the powers and objects of the company and matters in relation to its administration. For certain types of companies such as financial services, trustee, insurance, brokerage companies there are specific requirements for the contents of the memorandum and articles of association.

In order to prepare the memorandum and articles of association of a company in Cyprus the following information is required:

• The objects and intended activities of the company.
• The amount and currency of the proposed Authorised and Issued share Capital of the Company (in most cases that is €1000).
• The number of shares held by each shareholder.

Directors and Secretary

A company in Cyprus with a single shareholder can have one person to be the director and secretary of the company. Where there are two or more shareholders, then the secretary and director of a company must be different persons. Public companies must have at least 2 directors.

For taxation reasons companies in Cyprus have Cypriot directors and secretaries (either natural persons or companies) as a company is considered as domiciled where its effective management and control are exercised.

Shareholders and Share Capital

A company in Cyprus must have at least one shareholder and a private company (a company whose shares are not traded publicly, i.e. in the stock exchange) cannot have more than 50 shareholders. There are no restrictions on the nationality of the shareholders or the currency of the share capital of the company.

Registered Address / Office

The Company must have a registered office address in Cyprus. The statutory records of the Company must be maintained there. The company's registered office address must be documented using Form HE2, which is mandatory for Cyprus companies.

Required Documents for Submission

When registering a company, the following documents must be submitted to the Registrar of Companies:

• Memorandum and Articles of Association
• Forms HE1, HE2, and HE3
• Statutory declaration (Form HE1), which is a formal legal statement prepared by a lawyer confirming compliance with Cyprus company law requirements
• All other relevant documents as required for regulatory compliance

Certificates Issued Upon Registration

Upon successful registration, the following certificates are issued by the Registrar of Companies: certificate of incorporation, certificate of directors, certificate of shareholders, certificate of registered office, and secretary certificate.

Period Needed for Registering a Company

Normally it takes about 8-10 days to register a company in Cyprus. However, for people who are in a hurry, we offer the following options:

• Pre-approved company names: Using one of our pre-approved names allows company registration in 3-5 working days. For even faster processing, an accelerated procedure is available for an additional fee.

• Using a pre-registered (off-the-shelf) company. We have pre-registered companies with various registration dates and without previous activities that can be used straight away.

Post-Registration Requirements

Once your company in Cyprus has been registered, there are several post-registration requirements to ensure ongoing compliance:

1. Tax Identification Code (TIC): Register with the Tax Department to obtain a tax identification number for all tax-related matters.
2. VAT Registration: If your company's annual turnover exceeds the determined threshold, VAT registration is obligatory.
3. Social Insurance Registration: Register with the Social Insurance Services to fulfill obligations regarding employee contributions.
4. Shareholders Certificate: Obtain a shareholders certificate and keep a certified copy of the Memorandum and Articles of Association at the registered office.
5. File Director and Officer Details: Within 60 days of incorporation, the company's directors, secretary, and shareholders must file their details with the Registrar.

Setting Up a Bank Account

Opening a bank account is a crucial step in the Cyprus company registration process, enabling your business to manage its finances and conduct day-to-day operations. A bank account can be established with a local Cypriot bank or an international institution, depending on your business needs.

The company's directors and shareholders will need to provide identification documents and proof of address as part of the application process. Some banks may also request a brief business plan or description of your business activities. Working with a reputable service provider or accounting firm can simplify the process, ensuring that all necessary documents are prepared and submitted correctly.

Tax Considerations for Cyprus Companies

Cyprus offers one of the most tax-efficient environments in the European Union for registered companies:

• Corporate Tax Rate: Cyprus corporate tax is 15%, one of the lowest in the EU.
• No Withholding Tax: Cyprus imposes no withholding tax on dividends, interest, and royalties sent abroad.
• Capital Gains Tax: Cyprus does not impose capital gains tax on the sale of shares. However, gains from selling immovable property located in Cyprus, or shares in companies that own such property, are taxed at 20%.
• Double Tax Treaties: Cyprus has signed over 60 double taxation agreements, allowing businesses to minimize global tax liabilities.
• 183-Day Rule: Individuals who reside in Cyprus for more than 183 days in a calendar year are deemed tax residents and can benefit from favorable personal tax rates and exemptions on certain types of employment income.

Annual Returns and Financial Statements

Every company registered in Cyprus must prepare annually Financial Statements based on International Financial Reporting Standards and have them audited by licensed independent certified Auditor. A company in Cyprus must file its Audited Accounts and Annual Return within 18 months from its incorporation date to the Registrar of Companies. Thereafter they must be filed annually.

Incorporation of a Company in Cyprus

The costs of registering a company in Cyprus are comprised of professional fees and disbursements (fees paid to the Registrar of Companies). The disbursements typically vary from approximately €650 – €1000.

Maintenance

The costs of maintaining a company in Cyprus also include professional fees and disbursements paid. The professional fees paid include those for nominee services, bookkeeping and auditing of accounts.

Industry-Specific Compliance

Cyprus is a pro-business jurisdiction, but certain industries require additional regulatory clearances before or after incorporation:

• Financial Services: Entities dealing in financial products may require authorization from the Cyprus Securities and Exchange Commission (CySEC).
• Tourism: Tourism-based businesses may need licenses from the Cyprus Tourism Organisation.
• Manufacturing: Manufacturing entities could require environmental clearances from the relevant authorities.

Engaging experienced legal advisors ensures that industry-specific licensing requirements are identified and addressed early in the registration process.