COMPANY IN CYPRUS

Cyprus is a unique region for doing business, which combines all the advantages of a low-tax zone and the European Union. The formal location of the Republic of Cyprus in the EU allows local companies to cooperate with counterparties from 50+ countries which have tax avoidance agreements with Cyprus.

Aside from the optimally reduced tax burden (corporate tax is just 12.5%), Cyprus is also known for maintaining privacy of business, which can be considered a legacy of English law.

Beneficial forms of business in Cyprus

The following organizational and legal forms of enterprises are the most popular in the Republic:

• private company (similar to LLC) – Private company limited by shares. The charter determines the number of the members;
• public company (similar to joint stock companies) – Public company limited by shares. Sale of shares is allowed, but at a price 20% higher than par value;
• branch of a foreign organization. A representative office or structural unit on the island.

A private company is the most beneficial form for registering a business. It is used not only in Cyprus, but also in international tax organizations.

What documents are required for registration?

The following documents are required to start a business in Cyprus:

• application form for registration;
• memorandum of association, which defines the goals and range of powers of the company;
• charter.

The beneficiaries will need to prepare copies of the following documents:

• passport;
• diploma of higher education;
• bank statements;
• summary.

According to the requirements of Cypriot law, all documentation must be executed in Greek or English. Cortax helps businesses with quality translations of the required certificates.

What you need to know about starting a business in Cyprus

The specifics of registering a company in the Republic of Cyprus is determined by the following issues:

• the maximum number of members in the private company is 7 people. The firm will be public, if there are more shareholders;
• founders can be both organizations and individuals;
• information about beneficiaries is not publicly available. In addition, the status of a nominee shareholder can be used;
• the minimum amount of the authorized capital is one thous. Euros;
• the charter must contain information about the amount of capital, the activities of the enterprise, and the powers of the members;
• beneficiaries must prepare a set of documents;
• the name of the firm must include the abbreviation "LTD". The name must be in Greek or English;
• legal address is required;
• each company pays an annual fee of 350 Euros to renew its activities.

Cortax will help both in the registration of a legal address and in the preparation of a set of documents for beneficiaries.

Specifics of taxation in Cyprus

The following taxes apply to organizations in the Republic:

• corporate tax. The base rate is 12.5%. The tax is only 2.5% in the IP Box mode, and 0% for holdings. Non-residents do not pay dividend tax;
• VAT (PVN). The organization must pay value added tax if its income is over 15,600 Euros. The base rate is 19%. There are preferential rates: from 0% to 9% (if the company operates outside the EU);
• income tax. The rate range is from 0% to 35%. The income is not taxed if it is less than 19,500 Euros;
• mandatory contributions. The employer pays from 0.5% to 8.3% to insurance funds and other structures.

The minimum wage requirements are quite loyal. Many Cypriot companies operate without employees at all, which automatically eliminates the need to make payments to various funds. Cortax will help you find the best taxation scheme, translate documents, and facilitate the opening of a business in one of the most popular European regions.