26.10.2024
BUSINESS IN CYPRUS
How to Register a Company in Cyprus in 2024
What opening or relocating a business to Cyprus offers, where to start and how to avoid mistakes
5 reasons to open a company in Cyprus
Opportunities to enter the international market. Registering a company in Cyprus lets you forget about the invisible barriers that businesses from “toxic” jurisdictions face in 2024. This applies both to moving an existing business and to starting from scratch.
Cyprus is not considered an offshore zone and is not on the “blacklists” of offshore jurisdictions of most countries.
Unlike many other EU countries, Cypriot business is oriented towards external markets from the start, since the island’s own population does not exceed 1.3 million. English as the main language of business also makes it easier for an immigrant to adapt to the new business environment.
Cyprus is not considered an offshore zone and is not on the “blacklists” of offshore jurisdictions of most countries.
Unlike many other EU countries, Cypriot business is oriented towards external markets from the start, since the island’s own population does not exceed 1.3 million. English as the main language of business also makes it easier for an immigrant to adapt to the new business environment.
Attractive tax rates. Corporate income tax in Cyprus is 12.5%. This is the lowest rate in the EU.
For IT companies there is a special tax regime called IP Box.
Tax on profit from the sale or use of intellectual property rights (for example, in-house developed software) is reduced to 2.5%.
For IT companies there is a special tax regime called IP Box.
Tax on profit from the sale or use of intellectual property rights (for example, in-house developed software) is reduced to 2.5%.
A growing and relatively inexpensive labour market. The population of Cyprus is increasing, including through immigration. Businesses have no trouble finding qualified employees, and relocation to Cyprus at the employer’s expense is a valuable part of an offer.
The cost of qualified staff in many fields is significantly lower than in the Western European labour market.
The Cypriot government pursues a loyal policy towards foreign investors and entrepreneurs.
The cost of qualified staff in many fields is significantly lower than in the Western European labour market.
The Cypriot government pursues a loyal policy towards foreign investors and entrepreneurs.
A simple registration procedure. You can open a company on the island in 1 month. Maintaining a company costs on average 35% less than in Western European countries;
An opportunity to obtain legal status in Cyprus. You can register a business in Cyprus even without a residence permit. But by opening an international company with a share capital of at least €260,000 you can obtain a permanent residence permit
Cyprus issues an immigration permit to foreigners who register an international company on the island with a share capital of €260,000 or more. The company’s activity must not have a negative impact on the Cypriot economy.
Foreigners can also obtain a residence permit in the country on other grounds, for example for investing in real estate or securities.
Foreigners can also obtain a residence permit in the country on other grounds, for example for investing in real estate or securities.
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Cyprus is not considered an offshore zone and is not on the “blacklists” of offshore jurisdictions of most countries.
Unlike many other EU countries, Cypriot business is oriented towards external markets from the start, since the island’s own population does not exceed 1.3 million. English as the main language of business also makes it easier for an immigrant to adapt to the new business environment.
Unlike many other EU countries, Cypriot business is oriented towards external markets from the start, since the island’s own population does not exceed 1.3 million. English as the main language of business also makes it easier for an immigrant to adapt to the new business environment.
Attractive tax rates. Corporate income tax in Cyprus is 12.5%. This is the lowest rate in the EU.
A growing and relatively inexpensive labour market. The population of Cyprus is increasing, including through immigration. Businesses have no trouble finding qualified employees, and relocation to Cyprus at the employer’s expense is a valuable part of an offer.
Opportunities to enter the international market. Registering a company in Cyprus lets you forget about the invisible barriers that businesses from “toxic” jurisdictions face in 2024. This applies both to moving an existing business and to starting from scratch.
Tax on profit from the sale or use of intellectual property rights (for example, in-house developed software) is reduced to 2.5%.
For IT companies there is a special tax regime called IP Box.
The cost of qualified staff in many fields is significantly lower than in the Western European labour market.
The Cypriot government pursues a loyal policy towards foreign investors and entrepreneurs.
The Cypriot government pursues a loyal policy towards foreign investors and entrepreneurs.
How company registration in Cyprus works
Registering a legal entity requires several consecutive steps. Only the last one — licensing — is optional, and only for businesses that do not need a licence.
What you need to do:
What you need to do:
Choose a legal form for your business.
The main options in Cyprus:
- a private limited liability company;
- a public limited liability company;
- a partnership, or joint venture;
- a local branch of a foreign company.
The most popular option is the private limited company. The number of shareholders can be up to 50, and they are liable for the company’s obligations in proportion to their share of the share capital.
Private companies have no minimum share capital requirement; owners usually contribute about €1,000.
When opening a branch of a foreign company, a share capital of €200,000 allows the owner to hire foreigners under a simplified procedure. On the basis of such a contract, the employee can obtain a Cyprus work residence permit.
When registering an international company with a share capital of €260,000 or more, its owner can obtain permanent residence on the basis of an immigration permit.
At the stage of choosing a legal form, it is important to discuss the details of your business project with a professional auditor. In the future this will give significant tax savings.
Private companies have no minimum share capital requirement; owners usually contribute about €1,000.
When opening a branch of a foreign company, a share capital of €200,000 allows the owner to hire foreigners under a simplified procedure. On the basis of such a contract, the employee can obtain a Cyprus work residence permit.
When registering an international company with a share capital of €260,000 or more, its owner can obtain permanent residence on the basis of an immigration permit.
At the stage of choosing a legal form, it is important to discuss the details of your business project with a professional auditor. In the future this will give significant tax savings.
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Come up with a company name and agree it with the Registrar.
Some words cannot be freely used in company names: “bank”, “insurance”, “cooperative”, “financial services”, “group”. Permission for them must be obtained from the relevant authority. The name must be unique; similarity in spelling or sound to other Cypriot companies is not allowed.
You can propose three name options in the application.
The review takes 3–4 working days. Checking each name option costs €10.
You can apply in person, by post or on the official website of the Ministry of Energy, Commerce and Industry of Cyprus.
You can propose three name options in the application.
The review takes 3–4 working days. Checking each name option costs €10.
You can apply in person, by post or on the official website of the Ministry of Energy, Commerce and Industry of Cyprus.
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Prepare the registration documents. The document package depends on the business form and the applicant’s personal circumstances.
In any case you need to prepare:
A limited liability company needs a memorandum and articles of association. The memorandum contains information about the shareholders, director and secretary, the share capital and the distribution of shares. The articles describe the rules of interaction between participants and the procedure for shareholder meetings.
These documents cannot be prepared independently; they must be drawn up by a lawyer registered with the Cyprus Bar Association.
- an application to register the company;
- an application to register the registered address;
- permission to register the name;
- the memorandum and articles of association with a translation into Greek;
- certified specimen signatures of the founders;
- a receipt for payment of the state fee.
A limited liability company needs a memorandum and articles of association. The memorandum contains information about the shareholders, director and secretary, the share capital and the distribution of shares. The articles describe the rules of interaction between participants and the procedure for shareholder meetings.
These documents cannot be prepared independently; they must be drawn up by a lawyer registered with the Cyprus Bar Association.
Obtain the company registration certificates.
There are four in total:
There are four in total:
- of registration,
- of directors and secretary,
- of registered address,
- of shareholders.
The certificates are needed to register with the tax authority and open a bank account.
Obtain a taxpayer number from the Cyprus Tax Department and register as a VAT payer.
To do this you need to:
To do this you need to:
- register on the tax department’s website and create an electronic signature
- download form T.D.2001 from the Cyprus Ministry of Finance website, fill it in and sign it (taxpayer number)
- download form T.D.1101 from the Cyprus Ministry of Finance website, fill it in and sign it (VAT registration)
The company must be registered with the tax authority within 60 days of the date the company registration certificate was issued.
Open a corporate bank account. To open an account with a Cypriot bank, you need to provide a package of documents in English:
- an application on the bank’s form;
- the company’s articles of association;
- the certificate of registration;
- the certificate of directors and secretary;
- the certificate of shareholders;
- the certificate of registered address;
- a notarized copy of the company founder’s passport;
- proof of the founder’s residential address (a utility bill);
- proof of the legality of funds (a tax return);
- a reference letter from a bank or an EU company.
This is an indicative list; the bank may request additional documents.
Account opening may be accompanied by detailed checks. In a doubtful situation it is easier for the bank to reject an application than to look into the details of where the money came from. To keep account opening from dragging on for months, you can use an account opening service. An experienced lawyer will help you put together a package of documents that satisfies the bank’s compliance department and lets you open an account and fund it quickly.
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Obtain a business licence. Most popular types of activity, such as tourism, insurance, catering, financial services and others, require a licence in Cyprus.
For financial sector companies, obtaining a licence can take several months. For most other types of activity the licence is issued in no more than 5–7 days.
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Taxes for legal entities in Cyprus
As everywhere, the main business taxes are corporate income tax and VAT.
A company must register as a VAT payer if its annual turnover exceeds €15,600. The standard VAT rate in Cyprus is 19%, but for various types of activity there are reduced regimes down to a zero rate.
The corporate income tax rate is 12.5%. Even though this is the lowest rate in the EU, the Cypriot tax system provides numerous deductions and a special tax regime for IT businesses.
This regime is called IP-Box and allows you to avoid corporate tax on 80% of income received from exploiting intellectual property (IP).
And the costs of creating intellectual property can be amortized over 5 years. Proper use of the IP-Box regime allows an IT business in Cyprus to keep the real corporate tax rate at 2%.
The corporate income tax rate is 12.5%. Even though this is the lowest rate in the EU, the Cypriot tax system provides numerous deductions and a special tax regime for IT businesses.
This regime is called IP-Box and allows you to avoid corporate tax on 80% of income received from exploiting intellectual property (IP).
And the costs of creating intellectual property can be amortized over 5 years. Proper use of the IP-Box regime allows an IT business in Cyprus to keep the real corporate tax rate at 2%.
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Relocating a business and employees to Cyprus
Moving to Cyprus can be a great idea not only for individuals but also for legal entities. Cypriot registration removes most of the problems that companies from “toxic” jurisdictions oriented towards the international market face today.
To bring key employees to Cyprus and legalize them there, the business owner needs to provide for the possibility of hiring foreign nationals in their Cypriot legal entity.
For this you need a company of foreign interest (Company of foreign interest). A company with this status can hire citizens of non-EU countries under a simplified procedure. An ordinary Cypriot company must first prove that no island resident is applying for the open vacancy — this procedure can take quite a lot of time.
Official employment in a company of foreign interest allows employees and their family members to obtain a residence permit in Cyprus.
Criteria for a company of foreign interest:
To bring key employees to Cyprus and legalize them there, the business owner needs to provide for the possibility of hiring foreign nationals in their Cypriot legal entity.
For this you need a company of foreign interest (Company of foreign interest). A company with this status can hire citizens of non-EU countries under a simplified procedure. An ordinary Cypriot company must first prove that no island resident is applying for the open vacancy — this procedure can take quite a lot of time.
Official employment in a company of foreign interest allows employees and their family members to obtain a residence permit in Cyprus.
Criteria for a company of foreign interest:
A residence permit for employment is issued for a maximum of 3 years at a time. After that it must be renewed, and after 4 years of living on the island the work visa holder has the right to apply for citizenship under a simplified procedure.
There are also requirements for hiring employees when relocating a business to Cyprus:
- Minimum salary of €2,500 per month, or €2,000 per month if the employee already has a residence and work permit.
- Proof of the employee’s relevant qualifications (a diploma or confirmed work experience in a similar position of at least 2 years);
- A contract for a term of at least 2 years.
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- 50% + 1 share is owned by citizens of non-EU countries;
- Share capital of at least €200,000. The money must come into the company’s account from outside Cyprus;
- If non-EU shareholders own less than 50% of the company’s shares, their stake must be worth at least €200,000;
- Within 5 years, at least 30% of jobs must be held by citizens of Cyprus or the EU;
- The company must have an operating office in Cyprus (registration in a coworking space is allowed);
- The company must be registered in the Register of Companies of Foreign Interest, with the Business Facilitation Unit (BFU), and approved by the Migration Department;
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