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.

Legal and Regulatory Benefits of Doing Business in Cyprus

• Stable and Transparent Legal System – Based on English common law principles.
• Efficient Corporate Governance – Streamlined procedures for company formation, restructuring, and compliance.
• Attractive Holding Company Regime – Tax exemptions on dividends and capital gains.
• Intellectual Property Protection – Significant tax reductions for qualifying IP assets.
• Low Bureaucracy and Business-Friendly Policies – Regulations are continuously updated to enhance the ease of doing business.

Business Opportunities and Investment Sectors in Cyprus

Cyprus provides investment opportunities across multiple industries, attracting businesses looking to expand into Europe and beyond.

Key Investment Sectors

• FinTech and Blockchain – Cyprus is a major hub for cryptocurrency and blockchain businesses.
• Real Estate and Property Development – A booming sector attracting investors.
• Technology and Startups – Supported by government incentives and funding.
• Financial Services – Strong banking and investment fund industries.
• Tourism and Hospitality – A top European destination with year-round opportunities.
• Agriculture and Food Export – High demand for Cypriot products in global markets.