Company Formation in Cyprus

Key Advantages of Setting Up a Company in Cyprus

• Low Corporate Tax – One of the lowest in the EU at 12.5%.
• EU Membership – Access to the European single market.
• Favorable Legal System – Based on English common law, ensuring transparency and efficiency.
• Strategic Location – Serves as a gateway between Europe, Asia, and Africa.
• Strong Financial Sector – Well-regulated banks and investment opportunities.
• Fast Incorporation Process – Companies can be set up in as little as one week.
• No Capital Gains Tax – On the sale of shares, except for real estate in Cyprus.

Supportive Business Environment in Cyprus

Cyprus offers a thriving business ecosystem that fosters entrepreneurship, innovation, and economic growth. With a range of government incentives and world-class infrastructure, the island provides businesses with an ideal environment to establish and expand operations.

• Innovation and Startup Culture – Cyprus actively supports startups through incubation programs, accelerators, and government funding initiatives.
• Access to Global Markets – As an EU member and a strategic trade hub, Cyprus connects businesses to European, Middle Eastern, and African markets.
• Strong Financial and Banking System – Cyprus has a robust, internationally connected banking sector that facilitates smooth business transactions.
• Skilled and Multilingual Workforce – The country offers a highly educated workforce fluent in English, Greek, and other international languages.
• Renewable Energy and Sustainability Initiatives – Cyprus is investing in green energy projects, making it an attractive location for sustainable businesses.

Step-by-Step Guide to Company Formation in Cyprus

Setting up a company in Cyprus is a structured yet straightforward process. However, it is crucial to follow each step carefully to ensure compliance with local regulations and take full advantage of the country’s business-friendly environment.

1. Choosing a Company Name

The first step in company formation is choosing a unique company name, which must be approved by the Department of the Registrar of Companies. The approval process typically takes 2-3 business days.

2. Selecting the Business Structure

Business owners must decide on the most suitable business structure. The most common option is a Private Limited Company (Ltd) due to its limited liability benefits and ease of incorporation. Other available structures include:

• Public Limited Companies (PLC) – Suitable for large businesses.
• Partnerships – Can be either general or limited.
• Sole Proprietorships – Ideal for small-scale individual businesses.

3. Appointing Directors and a Registered Office

The company must appoint at least one director and a secretary. The director can be a foreign national or a legal entity, but appointing a local director can provide tax residency advantages. Additionally, the company must have a registered office address in Cyprus, which serves as its official point of contact for legal correspondence.

4. Preparing and Submitting Documentation

The required documents include:

• Memorandum and Articles of Association.
• Details of directors, secretary, and shareholders.
• Proof of the registered office address.
• Passport copies and utility bills for identification purposes.

The company registration process usually takes 5-10 business days from the submission of these documents.

5. Opening a Corporate Bank Account

After incorporation, the next step is to open a corporate bank account in Cyprus or an international bank. Required documents include:

• Certificate of Incorporation.
• Memorandum and Articles of Association.
• Identification details of directors and shareholders.
• Proof of the company’s physical address.

The account opening process typically takes 1-2 weeks.

6. Tax and VAT Registration

Every company must obtain a Tax Identification Number (TIN) from the Cyprus Tax Department. If the company’s annual revenue exceeds €15,600, it is required to register for VAT. Businesses that employ staff must also register for social insurance contributions.