Setting Up a Company in Cyprus: A Comprehensive Guide
Cyprus, an island country situated in the eastern Mediterranean, is a famous destination for foreign investors looking to establish a company in the European Union (EU). The country provides a business-friendly environment, with low tax rates, a highly educated workforce, and well-developed infrastructure.
If you’re planning to set up a company in Cyprus, this comprehensive guide will take you through the legal requirements and processes involved.
Legal Requirements
To establish a company in Cyprus, you need to consider the following legal requirements:
1. Eligibility – Any person or entity, whether resident or non-resident, can set up a company in Cyprus. There are no restrictions on nationalities, ownership, or shareholding.
2. Office Address – A local registered office address is mandatory for all Cyprus companies. This address will serve as the official contact point for all legal communications.
3. Share Capital – Cyprus companies require minimum share capital of €1,000. The share capital can be expressed in any major currency, excluding cryptocurrencies.
4. Company Name – Choosing a company name in Cyprus can be submitted with the Cyprus Registrar of Companies. It must be unique, not misleading, and not prohibited under the company’s law.
5. Articles of Association – You need to draft and register articles of association that set out the company’s internal regulations and governance structure.
6. Memorandum of Association – You need to draft a memorandum of association establishing the company’s objectives and purpose.
Processes Involved
The process of setting up a company in Cyprus includes the following procedures:
1. Reserve and Register a Company Name – The name reservation process is done digitally and can take up to 3 business days.
2. Draft and Notarize Memorandum and Articles of Association – A notary public in Cyprus must notarize the memorandum and Articles of Association.
3. Register the Company – You can complete the registration of your company by filing the required documents with the Cyprus Registrar of Companies.
4. Obtain a Tax Identification Number (TIN) – After registration, the next step is to obtain a TIN, which is required to comply with the Cyprus tax system.
5. Register for Social Insurance and VAT – If you have employees, you need to register for social insurance. Registration for Value Added Tax (VAT) is also mandatory for businesses operating in Cyprus.
FAQs Section
1. What is the minimum share capital requirement to establish a company in Cyprus?
The minimum share capital requirement for a Cyprus company is €1,000.
2. Can a foreigner own 100% of a Cyprus company?
Yes, a foreigner can own 100% of a Cyprus company, as there are no restrictions on nationality or ownership in Cyprus.
3. Can I set up a Cyprus company without being present in Cyprus?
Yes, it’s possible to set up a Cyprus company without being present in Cyprus. However, you need to appoint a local resident as a director and provide a local registered office address.
4. How long does it take to set up a company in Cyprus?
The registration process for a company in Cyprus can take up to two weeks, after which you can obtain a tax identification number and register for VAT.
5. What are the tax rates for a Cyprus company?
The corporate tax rate in Cyprus is 12.5%. There are also various tax incentives and exemptions, including a full exemption on dividend income from Cyprus companies.
Conclusion
Setting up a company in Cyprus offers various benefits to foreign investors. The country’s business-friendly environment, low tax rates, and highly educated workforce make it an attractive location for international operations. If you’re considering establishing a company in Cyprus, make sure to consider the legal requirements and follow the necessary processes to ensure a successful registration.