Formation of Cyprus Companies
Establishing a business in Cyprus is a tax-efficient way to conduct business within the European Union and beyond. Non-Cypriot permanent residents can enjoy a number of competitive advantages in comparison to other global business centres. These range from the wide network of double tax treaties with more than 60 countries, to the lowest corporate tax rate in Europe at 12.5%.
We help you navigate the types of organization structures for international businesses, outline the types of business entities you can establish, as well as offer services in registering and re-domiciling your company.
What are the organization structures for international business?
Cyprus has five main types of corporate structures. These are:
- Cypriot Company: A regular Cypriot company can be a company limited by shares, which includes private and public companies, a company limited by guarantee, which is generally used for charity or non-profit businesses, an exempt private company, and an unlimited company.
- Subsidiary: An independent company registered in Cyprus that can undertake different activities than that of their parent company.
- Branch Office: A Cyprus resident company that is entirely dependent on its parent company, and fully protected by Cyprus’ double taxation treaty.
- Partnership: This can be a General Partnership or a Limited Partnership.
- Sole Proprietor: A simple corporate structure for individuals who run their business with or without additional employees.
What are the uses of Cyprus Companies?
- Cyprus Holding Company:
Can act as an intermediary between EU and non-EU jurisdiction, as well as with emerging markets such as Russia and India. A Cyprus Holding Company receives dividends from subsidiaries suffering little or no withholding tax at source in accordance with the provisions of the EC Parent-Subsidiary Directive, or under Cyprus’ extensive network of double tax treaties.
- Cyprus Finance Company:
Undertaking a group financing function, a Cyprus Finance Company can receive interest income suffering no or little withholding tax at source in accordance with the provisions of the EC Interest & Royalties Directive or under Cyprus’ extensive network of double tax treaties and pay interest without deduction of withholding tax.
- Cyprus Investment Trading Company:
Proﬁts from the disposal of securities (shares, bonds, debentures and options) are exempt from tax irrespective of whether this proﬁt forms part of a company’s trading activity or is capital in nature.
- Cyprus Intellectual Property Holding Company:
Royalty income can be derived suffering no or little withholding tax at source in accordance with the provisions of the EC Interest & Royalties Directive or under Cyprus’ extensive network of double tax treaties.
- Cyprus Ship Owning And/Or Managing And Crew Employer Company:
Speciﬁc tax exemptions apply to companies owning Cyprus ﬂagged ships or managing and employing crews working in international waters.
- Cyprus Company For Oil And Gas Exploration:
Combined with the permanent establishment exemption, the exploration activity can often be undertaken in an income tax-free manner.
How do you register a Cyprus Company?
Registering a Cyprus company is a straightforward process, and can be completed within a maximum of two weeks.
Step 1: Register the name of the company and receive approval from the Registrar of Companies
Step 2: Deliver the notarized memorandum and articles of association that specify the company’s activities and how it aims to run them.
Step 3: Provide the owner’s ID papers or incorporation documents.
Step 4: Fill out the application forms issued by the Trade Register.
Step 5: Specify the capital structure. As a general practice, there is a minimum of 1,000EUR share capital.
Step 6: Submit the registration file which includes the above items, statements appointing the secretary, director, and registered office address, as well as a legal statement which affirms that all documents are in accordance to the Companies Law.
Company Re-domiciliation in Cyprus
Many countries allow foreign companies to change their jurisdiction of incorporation. This allows for the ‘re-domiciliation’ of a company into or out of the jurisdiction.
Many companies choose to re-domicile in Cyprus in order to benefit from the local tax regime. The process for re-domiciliation is relatively simple, and includes the following:
- Appointing a local approved representative
- Preparation of a re-domiciliation application and accompanying documents.
- Filing of an affidavit confirming the following information:
- Current company name and name under which it will continue its operations in Cyprus
- Country or jurisdiction where it is registered
- Date of registration
- Resolution or other authorization for the registration and continuation of the company in Cyprus
- Clean criminal record
We help you with
CX Financia can help you identify the legal structure that is right for you and your future business. We can also provide nominee services, such as nominee director, secretary, and shareholder, as well as a registered office address on behalf of your international company. Real substantive services are also available for those who wish to establish a fully-fledged office in Cyprus, with the appointment of personnel. Additionally, our team of tax experts can also provide you with the most effective tax solutions, tailored to your specific requirements.
- Registration with the Company Registrar of Cyprus including preparation of the application and collection of necessary documents
- Incorporation of Companies
- Provision of Company Secretary
- Provision of registered office address
- Assistance with the setting-up local office
- Assistance with hiring essential personnel
Would you like to know more?
Book a free consultation with us today to discuss your company formation needs.