Summary
This article provides a comprehensive overview of the process of Cyprus company formation, highlighting its efficiency and straightforward nature. 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. Cyprus legislation permits lawyers only to register companies. It is important to hire lawyers who are licensed by the Cyprus Bar Association for legal tasks such as preparing and submitting the necessary documents, including the correct application form for company registration and social insurance registration. This article explains the requirements and process of registering a company in Cyprus, including the benefits of access to the EU’s single market.
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. Whether you are a start-up or an established business looking to expand, registering a company in Cyprus offers access to the EU’s single market and a host of business-friendly services.
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. In addition, Cyprus companies are generally exempt from capital gains tax on the sale of shares, unless the company owns land in Cyprus, and non-domiciled individuals are not subject to dividends tax on income from Cyprus companies. 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.
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. Name applications normally take 3-5 working days to be examined. The Companies registrar may reject names identical or similar to existing companies or names that imply illegal activities. When certain names contain the words “insurance”, “banking”, “brokerage” and “trustees” require the consent of the Central Bank of Cyprus prior to their registration. 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. Ensuring that all relevant information and documents are accurately prepared and submitted to the Registrar of Companies is essential for a smooth and timely registration process.
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:
1. 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.
2. 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. We provide nominee directors and secretaries on request. 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. However, if the owner of a company wants to nominate its own director/s and secretary then the following information needs to be provided:
(i) Persons acting as a director/ secretary:
Copy of Passport, Proof of address (utility bill dated within the last 3 months), CV, Personal Information form.
(ii) Legal entity acting as a director/ secretary:
Proof of company incorporation (recent and apostilled), Proof of company directors secretary shareholders and registered office (recent and apostilled), Copy of Memorandum and articles of incorporation (apostilled), Copy of passport and proof of address (recent utility bill) for each Director Secretary and Shareholder, Company Information form.
3. 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. For private limited companies, there is no minimum share capital required by law, but it is common to have an authorized share capital of €1,000. For public limited companies, the minimum share capital required is €25,630.
4. 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. This address is used for official notifications and can be provided by a lawyer as a service.
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. These certificates serve as official proof of compliance and legal recognition of the company.
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. If you require company certificates in English or need expedited document processing, please note that an additional fee applies.
Cyprus’s favourable tax regime and its advantages as a member of the European Union, including low corporate tax rates and access to the EU’s single market, make it an attractive destination for international businesses and investors.
Post-Registration Requirements
Once your company in Cyprus has been registered, there are several post-registration requirements to ensure ongoing compliance. The company must register with the Tax Department to obtain a tax identification number and, if applicable, a VAT registration number. Registration with the Social Insurance Services is also necessary, enabling the company to fulfill its obligations regarding employee contributions. A shareholders certificate must be obtained, and a certified copy of the company’s Memorandum and Articles of Association should be kept at the registered office address. The company is required to maintain accurate accounting records and prepare annual financial statements, which must be filed with the Registrar of Companies. Staying up to date with these requirements helps ensure that your company remains in good standing and fully compliant with Cyprus’s legal and regulatory framework.
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. Working with a reputable service provider or accounting firm can simplify the process, ensuring that all necessary documents are prepared and submitted correctly. Once the bank account is set up, your company can start operations, take advantage of Cyprus’s significant tax benefits, and efficiently manage business transactions. Properly maintaining your bank accounts and financial records is essential for compliance and long-term business success in Cyprus.
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. The Audited Accounts are also filed with the Income Tax Department. Companies must also register with social insurance services and comply with the responsibilities regarding contributions to social insurance for their employees. The Annual Return must be submitted to the Companies Registrar within 14 days of the day of the company’s annual general meeting which must not be later than 15 months from the date of the last Annual Return.
1. 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.
2. 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. The other expenses include any costs for employees, as well as the following annual cost to the Cyprus Companies Registrar: €40 annual report fee.
