Creating a company in Cyprus

CREATING A COMPANY IN CYPRUS

Creating a company in Cyprus can allow you to optimize your taxes, while pursuing your international business.
Here are the guidelines to taking this step:

• Cyprus Corporate taxation is 12.5%, one of the lowest in the EU.
• Cyprus is ranked among the 50 top free world economies according to the Heritage Organization 2018 Index of Economic Freedom with regards business, trade, monetary, financial, investment and labor markets, ahead of countries like Spain, Italy, Kuwait and Bahrain.
• A Cyprus company may be incorporated with 100% foreign ownership, and for a private company, only one shareholder and one director are minimum requirements for registration. Corporate or natural persons of any nationality can fulfill these roles.
• 0% Corporation Tax on dividends paid to a Cyprus resident company, whether these dividends are received from a foreign company or another Cyprus resident company. Conditions apply.
• 0% Withholding Tax on dividends repatriated to a non-resident shareholder (individual or company).
• Double taxation treaties between Cyprus and over 60 countries, which allows more favorable taxation conditions.
• Thanks to the legal system and Common Law, a Cyprus company is the ideal means to optimize investments and holdings.

Our team and associates will assist you in setting up your Cyprus company including but not limited to handling your accounting services, tax advice, financial management, in the application for opening a bank account, and any other necessary steps enabling you to enjoy the above-mentioned benefits.

CREATING A CYPRUS NON-TAX RESIDENT COMPANY

You will find below the requirements to register a Cyprus Non-Tax Resident Company, formerly called Offshore Company or International Business Company (these two terms are no longer in use in Cyprus since 2004).

By definition, a Cyprus Non-Tax Resident Company is neither managed nor controlled from Cyprus. This means can be used as an alternative to an offshore tax haven jurisdiction such as the BVI, Belize, etc.

For Cyprus Non-Tax Resident Companies:

Non-Resident Status:

• 0% taxation in Cyprus, except for Cyprus-sourced income.
• In the case of Cyprus-sourced income, the company will not take full advantage of the double tax treaties network.

Audit and Financial Returns:

• Accounts must be submitted to the Tax Authorities and the Registrar of Companies.
• The first submission of audited accounts must be made for the first time within 18 months from the date of the company’s incorporation.
• Annual submission is required thereafter.
• Tax returns must be submitted, indicating the country where the country is taxed – all companies must be tax residents somewhere.
• Annual accounts must be submitted to the Registrar of Companies.

Please consider the following before setting up either a tax or non-tax resident Cyprus company:

• It is a separate legal entity.
• It can take the form of a private or public Limited Liability Company (LLC), limited by shares or by personal guarantee of its members – a private LLC is the more common form chosen.
• The company must have a name approved by the Registrar of Companies (this step takes about 3-5 working days).
• A Memorandum and Articles of Association (M&AA) must be prepared by a licensed law practitioner and filed at the Office of the Registrar of Companies. This Memorandum details the activities the company may engage in, and the Articles of Association specify the rules governing the company’s internal management.
• A private LLC can have up to 50 shareholders. Their names, addresses and nationalities must be submitted to the Registrar of Companies.
• A deed of trust can be set up to avoid disclosing the above-mentioned shareholders’ details, making this information inaccessible to the public. Indeed, a beneficial owner of a Cyprus company can designate a nominee shareholder.
• There is no minimum amount for the authorized or issue share capital of a Cyprus LLC. In general, the authorized share capital is of 1000 shares of €1 or 5000 shares of €1. Any currency can be used and there is no minimum for the value of each share.
• At least one director is mandatory for private companies, as well as a secretary by law (an individual or a corporate person).
• A registered office and its address in Cyprus is required, which must be disclosed at the Registrar of Companies.
• Once the information is provided and compliance checks are completed, it takes 7-10 working days to create a company from the date when all the documents are submitted to the Registrar of Companies.

In order to establish the compliance review and acceptance before proceeding with the Company incorporation and in line with applicable anti-money laundering laws and regulations, the following elements are required:

• full Know Your Client (KYC) documentation up to and including the UBO
• related persons/entities

INTERNATIONAL TAX PLANNING

Thanks to our associations with highly qualified professionals in both Cyprus and international taxation, we are in a position to offer you specific tailor-made tax optimization solutions according to your situation and needs.

Indeed, we can offer guidance and customized solutions in international tax planning, tax management, international VAT as well as Cyprus local taxes and VAT.

These solutions take into account all applicable taxes: Corporate, Personal, Business Tax, Inheritance Tax, Capital Gains Tax, VAT and other related taxation.

We will assist you in setting up an efficient and precise strategy to offer you and your business the most cost-effective and profitable solutions for your international multi-jurisdiction tax issues.