Service

Home / Cyprus Company Formation
Cyprus Company Formation
Cyprus Company Formation

Buy your Cyprus Company Today!

Cyprus companies are very popular for a plethora of reasons including low corporation tax at 12.5%, ease of trade within and outside the EU, simple process and tax-free dividends to our overseas shareholders and Cyprus Non Domiciled Persons.

€1,700.00

Incorporation of a Cyprus Company

The incorporation process of a Cyprus company with a bank account is a seamless process that requires no physical attendance. The entire process is performed remotely as follows:

Our team of experts will send you some basic enquiries such as the preferred name of the company, its composition and preferred banking institution. Then we will send you a standardised M&A for your review and approval which will require 2 signatures (Cyprus is currently going through the digitisation phase and e-signature has just recently been approved by parliament). Upon receipt of the signed document and collection of the banking information needed, we will apply for the incorporation of your bank account and commence the preparation of the banking application.

As soon as your company is formed (within 3 working weeks), we will proceed with the submission of the bank account application which usually takes another 3 working weeks to be completed.

Read the Guide for a step-by-step approach

Cyprus Company Formation - Information & Documentation Needed

a) Owners and directors of the Company

  • Copy of shareholders' and directors' ID or Passports,
  • A recent utility bill less than 6 months old

b) Details about the composition / company setup:

To proceed with the company set up we will need to have the below information confirmed to us:
  • 3 Company preferred name options, prioritised, if relevant
  • Director of the Company (we can offer this service - part of fiduciary services) 
  • Company Secretary (we can offer this service - part of fiduciary services) 
  • Shareholder (we can offer this service - as part of fiduciary services)
  • Registered Address (we can offer this service - part of fiduciary services)
Cyprus Company - Formation Process
  1. Complete the purchase via our website or email if you are experiencing difficulties
  2. Provision of documentation and information on the composition of the company, via email.
  3. Creation of the company & issuance of the incorporation pack
  4. Creation of the company bank account
  5. Registration of the company with local authorities
 
Registration with local authorities
Once the Cyprus company is formed, our team of of accountants and tax consultants will ensure it is also registered, as required as follows:
  • TIN Number (Tax Identification Number)
  • VAT / VIES Register - if there is such a need, usually all Cyprus companies are VAT Registered
  • Register of Ultimate Beneficial Owners (UBO Register)

The minute these registrations are completed, the company will be able to trade and our team of accountants will be in touch to start gathering the necessary and required accounting information.

Timeframes
  • Name approval - 1 Working week from application
  • Creation of Cyprus Company - 3 Working weeks from the application submission
  • Creation of bank account - 3 Working weeks from the application submission

How long does it take to register a Cyprus company?

It usually takes less than 21 working days to register a Cyprus company:

► If in a hurry, you can buy a ready-made company from an Accounting or Legal firm, "off the shelf".

► "Off the shelf" companies are companies created to be sold and have no trading or other history. 

What is a dormant company?

A dormant company is a company that either has no activity at all or had activity in the past but at present is inactive; i.e in a dormant status

How many types of Cyprus companies exist?

In Cyprus there are the following types of Companies:

  • Limited by Shares company
  • Limited by Guarantee company
  • Public Company - trades in the Cyprus Stock Exchange

The most popular Company is the Limited by shares Company as the rest are not applicable to international investors and enterpreneurs.

Do Cyprus companies require an audit?

Yes if they exceed certain thresholds.

The income tax office requires all Cyprus companies to be audited by independent 3rd party licensed auditors or be reviewed by independent auditors depending on their size.

Are Cyprus Auditors licensed?

In Cyprus, all practicing auditors and audit firms are licensed by the Institute of Certified Public Accountants of Cyprus (ICPAC).

What is the process of registering a Cyprus company?

You either register a Cyprus company from scratch with the help of your accountants or lawyers or you buy a ready one "off the shelve".

All you need to decide is who will be the Director, Shareholder, Registered Office and Secretary of the Company. These facts must be determined during the incorporation process.

Once the company is incorporated or transferred from the shelf to the new owners you simply have to open a bank account and commence trade!

What is the process of closing a Company?

There are two ways to close a Cyprus company:

Liquidation - You need to hire lawyers to undertake this process which takes several months and court proceedings and because of this is more expensive.

Strike Off - Your local accountant will prepare the last set of financial statements and tax returns and submit them to the local authorities informing them that the Company must be closed down. This process is cheaper, not necessarily faster.

Main differences: Once the Company is been liquidated it can not be reinstated whilst a striked off Company can be reinstated by a court order which is a simple process.

 

Do I need to create a Company to trade in Cyprus?

Not really you can trade as a person and be called a sole trader, or you can create your own company to trade.

The difference between the two has to do with the taxable amount each category has and the liability against the authorities.

The decision must always be advised by an independent registered accountant, tax expert or auditor.

What is the difference between a Sole Trader and a Cyprus Company?

Trading as a Sole Trader

As a sole trader, you will be trading under your name and be responsible personally against civil and corporate tax. You will also be taxed on your profit under the normal employment tax rates as any other employee.

Social security and NHS are different to self-employed persons than employees.

Trading as a Company

Trading as a Company the company will be taxed at 12.5% only which is the tax rate for all Cyprus Companies on its taxable profits and the shareholder could be subject to dividend tax if Cyprus Tax Resident and Domiciled.

The Company and its director will be responsible against Company law, civil cases and the authorities.

Social security and NHS costs will be borne partially by the Company as well as the employer.

Which Option is better for me?

Usually by the rule of thumb, if your turnover is less than Euro 70,000 and you perform simple, low-risk services or trade you can trade under your name as a sole trader.

Factors to consider when deciding between trading as a Sole Trader or a Cyprus Company

To decide whether to trade as a sole trader or a Company you must consider the below:

1. Size

Turnover is more than 70,000 then a Company is usually more appropriate

If you have assets, then a Company is commonly more appropriate

 

2. Risk exposure your business is exposed to.

If it contains the below then to minimise your personal risk a Company is a better fit

  • have employees
  • perform risky services (aesthetics, exposure to labor accidents, high professional exposure, etc)
  • possibility of lawsuits
  • VAT and tax complications

 

3. Prestige

It is more prestigious when you trade under a Company than as a person. You look more professional and bigger to your clients, prospects and creditors.

 

4. Other Factors

All factors must be considered in combination and with the assistance of an experienced accountant the solution will be clear.

Do I need an accountant straight away?

Definitely Yes!

The most important reason you need an accountant or a tax expert right away is to first inform you of any tax benefits that may exist like for instance the Non-Domicile Tax benefits which entitles you to worldwide tax-free dividends here in Cyprus.

Besides this, your accountant will advise you on the local taxes, rules, and regulations that you must know before you commence trade and of course file your personal tax return.

Is Cyprus different from other European countries?

No.

Cyprus is a normal European country with its taxation system and common law judicial system.

What makes Cyprus such a great destination to work are several tax advantages uncommon to other European countries and some of its unique characteristics which are no other than the below: 

  • Small distances - the whole island is long
  • Awarded deep blue and turquoise color beaches
  • Great Educational system
  • English language spoken by everyone - second language
  • Great judicial system.
  • Great service providers including accountants and lawyers
  • Overall - easy, convenient and comfortable to do business

Which types of industries or businesses choose Cyprus?

1. High Net Worth Individuals: With the application of the Non-Domicile Status, they can enjoy tax-free worldwide dividends.

2. Shipping Companies: Tonnage tax system - taxed only on the weight they carry based on specific formulas, not their profits.

3. Forex & Investment Firm Industries: Easy, fast and convenient to get licensed

4. Holding Companies: Tax-free dividend income

5. Business from 3rd Countries: A Cyprus company is a low-cost highly professional jurisdiction to use to gain access in Europe.

6. Micro Businesses: Small companies usually comprising of one to two persons enjoy the beautiful island and work from their PCs

7. Satellite Businesses: Low setup and payroll costs enable Companies to have satellite offices in Cyprus where they can attract high-calibre personnel at low costs (usually 1.3 of their local cost).

8. HeadQuarter Relocation: Low setup and payroll costs coloured with high quality service providers and high calibre personnel make Cyprus a jurisdiction hard to oversee when deciding for new headquarters or an overseas branch.

What type of taxes exist in Cyprus?

In Cyprus we have the following personal and corporate taxes:

  • Income Tax - scaled from 0% up to 19,500 to 35% for salaries exceeding Euro 60,000
  • Corporation Tax 12.5%
  • Dividend Tax - 17% or zero for non-Cyprus tax residents and domiciled.
  • Social Security - 12% ERs / 7.8% EEs
  • NHS (National Health System Tax) -  2.9% for employers and 1.7% for Employees 
  • VAT - a standard rate of 19%

How much accounting and audit cost for a small Cyprus company?

If you own a Cyprus Company then you should expect something between Euro 1,700 - Euro 2,500 for a small company and more than Euro 2,500 + VAT for larger companies with several employees and lots of paperwork. 

See our indicative prices by clicking here.

Is an audit required for Cyprus Companies?

Yes.

A Statutory audit is required for all Cyprus companies which exceed certain thresholds.

Can I do the accounting of my Company?

Even though there are solutions that theoretically make the accounting function seem easy in practice it is complicated, and we strongly urge you not to. It is best to spend this time improving your own business.

Don’t forget, bank and payroll must be performed and be reconciled which is a complex task.

Also, auditors can use your accounting records if your Trial Balance (summary of all accounts) is fully reconciled. If not, then they will have to redo the accounting which means you will still have to be charged for accounting services.

Why would someone or a company relocate to Cyprus?

There are numerous reasons why Companies, Individuals and Solopreneurs choose Cyprus as their chosen destination.

The main reasons are:

1. Lifestyle

  • Summer 8 months a year with blue colour beaches, beautiful seafronts and amazing hotels
  • Easy and convenient to work, raise a family, transport, and do business
  • Everyone speaks the English Language
  • Relatively big island - it takes 3 hours at 120 kilometres per hour to cover it.

2. Tax Reasons

Attractive Tax Regime for Businesses>

  • 12.5% Corporation Tax
  • Tax-Free Dividends for Non-Domiciled persons
  • Incentives for Payroll (50% tax haircut for employees earning more than Euro 100k)
  • Low Payroll Costs

3. Security & Strong Law System

Cyprus uses the Anglo-Saxon System which relies on the precedents of cases. Therefore, Cyprus investors know what to expect when deciding to take matters to court. Also, the local decision of the courts can be challenged by addressing it to the EU Supreme Court of Justice.

What are the first steps for someone / business relocating to Cyprus?

The first step a Company or an Entrepreneur should do is to get in touch with an experienced accountant and tax expert who will ensure all tax benefits are been correctly set up so that they enjoy the maximum tax benefits during their stay in the republic.

Therefore having a lawyer as well is always recommended.

How much is a Cyprus Company taxed?

Cyprus companies are taxed only 12.5% and the dividend payments are tax-free for non-Cypriots or persons who are tax residents in Cyprus but not domiciled.

Is Cyprus considered a Tax Heaven?

Cyprus is not considered a tax heaven as:

  • Member of the EU (Cyprus follows EU law & directives)
  • Complies with the OECD directives
  • It has a 12.5% corporation tax
  • An audit is required for all Cyprus companies
  • Strict banking requirements
  • More than 70 double tax treaties mainly with EU member states

    What are the most common office expenses in Cyprus and how much do they cost?

    The below costs are indicative in case the company wants to establish physical prescence in the Republic of Cyprus, which is not a requirement.

    ► Office Space - Rent from €400 - € 2,000 per month depending on the city and size, Limassol being the most expensive and Larnaca the cheapest.

    ► Electricity from €250 every 2 months to €400 every two months depending on usage

    ► Water from €20 - €40 per month depending on usage

    ► Internet from € 30 - € 50 per month fixed fees + telephone usage

Composition of the Cyprus Company

Each Cyprus company must have a name, a director, a company secretary and shareholder /s (up to 50). For the company to be managed and controlled in Cyprus the majority of management should be Cypriots and Cyprus Tax Residents. Consequently, if you will not become a Cyprus Tax Resident and non-domiciled (read article here) you must appoint us to also act as directors of your Company. This service falls under the "nominee services" or "fiduciary services" and it is provided by one of our regulated associated firms authorised to perform such services. 

Step 1

Check if setting up a Cyprus limited company is right for you

How you set up your business depends on the activities you perform and how you perform them. Whether you trade as a Company or a Sole Trader will affect the amount of taxes you will be paying and your eligibility with local government funding schemes. 

In Cyprus, most businesses set up companies as the taxation is significantly lower than for self-employed persons. In addition, the owners are protected under the company veil contrary to when you trade as a sole trader.

Company vs Sole Trader | More on Cyprus companies | More on Cyprus corporate matters

Step 2

Choose your company name

A company name should not be generic and could be rejected by the Cyprus Registrar of Companies which is rather strict in this area. Our team of experts will request to obtain 3 names and apply for them and if rejected they will include your initials.  Rules for company names

Step 3

Composition of the Cyprus company

Each Cyprus company must comprise the following stakeholders:

  • director
  • company secretary
  • registered address
  • shareholders

For a Cyprus company to be considered a Cyprus Tax Resident and be taxed at 12.5% its majority of directors must be Cyprus Tax Residents. It is common for shareholders not living in Cyprus to appoint a local director or a regulated fiduciary firm that will perform directorship services. This is a service we offer to most of our clients.

Shareholders of the Company

All Cyprus companies are required to have at least 1 shareholder and less than 50. A shareholder is the owner of the company. All shareholders are also declared in the Cyprus UBO Register (Register of the Ultimate Beneficial Owners).

Step 4

Company paperwork

Your Cyprus company will be created based on standardised paperwork called the Memorandum & Articles of Association which will allow you to perform any activity necessary. Should you want us to amend them we will follow correspondence with you at a fee depending on the complexity and volume of changes required.

Typically there is no need to alter the papers of simple ownership and operations Companies.

Company Certificates: 

  • incorporation
  • directors & secretary
  • shareholders
  • registered address

Step 5

Bank Application

Upon the creation of the company, our team will send you a lengthy email with all our banking enquiries which represent the banking application form. Upon the receipt of the necessary information and documentation we will apply to the bank directly from our premises as introducers and you will have your bank account set up ready within 3 weeks from the successful submission of the banking application.

Cart Summary
items
Your shopping cart is empty.
Product Qty Amount
From:
Until: