Cyprus is considered one of the best jurisdictions in the European Union for international business due to its favorable location, clear legislation in relation to entrepreneurial activity and fairly low taxes. Companies are also registered in Cyprus due to the possibility of obtaining residency status for both the owners of the company and their family members. Read this guide from Maira Consult experts on how to register a business in Cyprus.
The main advantages of registering a company in Cyprus
Registering a business in Cyprus for a foreign entrepreneur is a fairly simple and profitable business. Maira Consult lawyers have collected the most significant benefits that a foreign entrepreneur can get:
- Low income tax of 12.5%.
- Value added tax on the movement of goods in the EU is 0%.
- Value added tax on the movement of goods in Cyprus is 0%.
- Dividends received by Cypriot companies from foreign companies are exempt from taxation. This is the case when a Cypriot company owns 1% of the share capital of a foreign company.
- Dividend payments by Cypriot companies are also tax-free.
- Entrepreneurs who have registered a company in Cyprus are entitled to open an account with a local bank. It also gives the right to rent a space for the company's office.
- Foreign business owners can maintain confidentiality by using the services of a nominee director and shareholders.
- It is very easy to buy an offshore company in the country to start doing business faster.
What do you need to know to register a business in Cyprus correctly?
Maira Consult experts warn that it is possible to open a company in Cyprus if certain conditions are met. These include:
- The authorized capital for registering a company in Cyprus is 1000 euros. However, there is no clear requirement in the legislation for its payment.
- A shareholder of a company can be an individual or a legal entity. It also does not matter which country the shareholder is a resident of. It is allowed to use a nominee shareholder.
- The director of the company must be a resident of Cyprus. If a company has several directors, a smaller number of them may not be resident in Cyprus. Also, the director may be nominee.
- To obtain a Tax residence certificate (Certificate of tax residence), the director of the company must be a Cypriot. It should also be noted that registrars have limited the issuance of general powers of attorney. Nowadays, they most often issue special powers of attorney with a limited list of powers.
- A mandatory item in the registration of a company in Cyprus is the position of secretary. He or she can be a legal entity or an individual, a resident of Cyprus. Most often, the secretary of a Cyprus company is one of the registrar's companies. This is convenient when negotiating with state authorities, tax authorities, etc.
- Non-payment of state duty for the period from 2013 to 2023 inclusive has consequences in the form of fines (in 2024, the duty is no longer paid). Depending on the date of delay, the fine increases. For example, by August 30, it is already necessary to pay 385 euros, by November 30, 490 euros, and after that date, 500 euros must be paid.
- Failure to pay the annual fee may result in the removal of a foreign company from the Cyprus company register. Restoration is possible only through the court. The first report, together with the auditor's report, can be submitted within 18 months after registration. Then this report must be submitted annually.
- Cyprus has a single register of company beneficiaries. It is not open for public access, all data can be seen only by state and fiscal authorities.
Due Diligence Procedure
When registering a business in Cyprus, each registrar must request information from the client about the future activities of the Cyprus company, the purposes for which it is planned to open it, the origin of the company owners' funds and its structure. Also, each of the company's members must provide the following documents:
- an identity document (id card or passport);
- document confirming the address of residence (passport registration, utility bill, lease agreement, etc.);
- resume (CV);
- bank recommendation from the bank where the personal account is opened.
It is important to confirm the source of funds immediately if you need to register a business in Cyprus quickly. This can be done by providing the following information:
- source of wealth - ownership of movable/immovable property, deposit, ownership of securities, etc;
- source of funds - salary, dividends, fees, etc.
All information provided must be supported by documents. The registrar also has the right to request and update information about its clients every three months. For this purpose, each law firm has a special employee Compliance Officer. He has the appropriate certificate that allows him to collect and verify the documents of entrepreneurs.
How can Maira Consult help with business registration in Cyprus?
By contacting Maira Consult, you can order a number of services related to registration of a company in Cyprus:
- directly registering a business or buying a ready-made company;
- ordering and apostillization of an extract from the Cyprus State Register;
- conducting an audit;
- preparation of financial statements;
- full service of the company from the legal or financial side.
If you want to open an account, Maira Consult recommends doing so in the following financial institutions:
- Unlimit (financial company).
- Eurobank Cyprus (bank).
- Bank of Cyprus (bank).
- Hellenic Bank (bank).
Want to go through a quick business registration procedure in Cyprus? Contact Maira Consult for a free consultation and get answers to all your questions.
