Cyprus is a popular destination for small businesses, startups and big multinational organizations who want to register a company in Europe. The country offers a strategic location, an attractive tax regime, and an efficient business environment, making it an attractive hub for the aforementioned who are looking to expand their operations. In this article, we will provide a comprehensive guide to Cyprus company registration, focusing on the legal requirements and procedures involved in the process.

Why Choose Cyprus for Company Registration?

Cyprus offers a range of benefits for business owners who are looking to establish a company in the country. These benefits include but are not limited to:

• Strategic location: Cyprus is located at the crossroads of Europe, Asia, and Africa, making it an ideal location for businesses looking to expand into these markets.

• Favorable tax regime: Cyprus offers a competitive tax system, with one of the lowest corporate tax rates in the EU at 12.5%. Additionally, the country has signed double tax treaties with over 60 countries, making it an attractive location for businesses looking to minimize their tax liabilities.

• EU membership: Cyprus is a member of the EU, providing businesses with access to the largest single market in the world.

• Skilled workforce: Cyprus has a highly educated and skilled workforce, with a strong work ethic and proficiency in English.

• Tech & IP Companies: Cyprus offers attractive tax regime and relocation schemes for Companies operating in the Tech sector, such as the IP Box Regime which can reduce the effective tax rate as low as 2.5%, as well as fast-track applications for work permits.

You can visit our dedicated ‘Why Cyprus’ page for more information.

Requirements for Company Registration in Cyprus

Before registering a company in Cyprus, it is important to understand the legal requirements. The following are the key requirements for company registration in Cyprus:

1. Company name: The first step in registering a company in Cyprus is to choose a name for the company. The name should not be identical or similar to any existing company in Cyprus, and it should not be misleading. After submission of the name application it usually takes 2-3 business days for the name to be approved.

2. Shareholders: A minimum of one shareholder is required to establish a company in Cyprus. Shareholders can be individuals or legal entities, and there are no restrictions on foreign ownership.

3. Directors: A minimum of one director is required to establish a company in Cyprus. The director can be a natural person or a legal entity, and there are no restrictions on foreign directors, but Cyprus Tax Resident Directors are recommended to strengthen the case of the Company for Cyprus Tax Residency

4. Company secretary: Every company registered in Cyprus must have a company secretary. The company secretary can be a natural person or a legal entity, and there are no restrictions on foreign secretaries.

5. Registered office address: Every company registered in Cyprus must have a registered office in the country.

6. Memorandum and Articles of Association: Every company registered in Cyprus must have a Memorandum and Articles of Association. These documents set out the company’s objectives, share capital, directors powers and responsibilities and needs to be signed by the first subscribers of the Company.

7. Share capital: There is no minimum share capital required to establish a company in Cyprus. However, it is common for companies to have an issued share capital of 1.000 shares of €1 each.

Procedures for Company Registration in Cyprus

Once the legal requirements have been met, the next step is to register the company in Cyprus. The following is the procedure our professionals follow for company registration in Cyprus:

1. Reserve company name: The first step in company registration is to reserve the company name with the Registrar of Companies. This can be done online or in person and usually takes 2-3 business days to be approved.

2. Prepare the Memorandum and Articles of Association: Once the company name has been reserved, the Memorandum and Articles of Association must be prepared and such document is signed by the first subscribers of the Company, i.e. the shareholders. You do not need to come to Cyprus to sign and scanned copies (in wet ink signature) will suffice.

3. Share capital: The next step is to decide on the amount of the authorized and issued share capital. We usually set the authorized share capital at 5.000 ordinary shares of €1 each and issue 1.000 ordinary shares of €1 each. This can ofcourse be altered depending on each individual circumstances.

4. Director(s), Corporate Secretary and Registered Office Address: The aforementioned will need to be decided so that the details of such are provided to the Registrar of Companies through the necessary completed forms.

5. Register the company: Once the above steps have been completed, we complete all the forms and submit to the Registrar of Companies. In terms of timelines after submission it usually takes four (4) to six (6) business days for the Company to be incorporated. Submission can be done online or in person but we usually submit online.

6. Registrations: After the Company is incorporated it will need certain registrations depending on its activities, but the most usual ones are as follows:

• • Obtain a Tax Identification Code: Complete necessary forms to the Tax Authorities to obtain a TIC number and also register with the Tax system for the online submission of tax forms. This registration is compulsory and needs to take place 60 days after incorporation.
  • UBO Register submission: The Cyprus Company will also need to submit its UBO information to the Registrar of Companies 30 days after incorporation. This is a compulsory registration.
  • Register for VAT: If the company will occur taxable supplies and meet the criteria for VAT registration then it needs to proceed with such registration. 
  • Register with Social Insurance Authorities: If the Cyprus Company will employee staff members then it will need to register with the social insurance authorities as well. This can be done through the social insurance department and we can ofcourse assist.
  • Non-Dom Registration: If any individual shareholder, director, staff member etc of the Company will come to be based and work in Cyprus they will need to submit the non-dom application to confirm their non-dom status and be able to benefit from tax free dividend and interest income.
  • Obtain business licenses: Depending on the nature of the business, the company may need to obtain additional business licenses from the relevant authorities.

Opening of a bank account 

Once the company has been registered and the necessary documentation has been obtained, a corporate bank account can be opened with a Cypriot bank. We can assist with such process by completing necessary forms and liaising with the client and the bank up until the bank account is opened. Bank account procedures have become a bit stringent in recent years, however, if you come to Cyprus and meet with the bank it can make the process more efficient. We can assist and advise you during all the steps of the process.

Benefits of Cyprus Company Registration

There are several benefits to register a company in Cyprus, which include but are not limited to:

1. Favorable Tax System: Cyprus has a highly favorable tax system, including a low corporate tax rate of 12.5%, making it an attractive location for businesses looking to reduce their tax burden. Additionally, Cyprus has a wide range of double taxation treaties with other countries, which can help to further reduce tax liabilities and tax regimes to attract Tech & Crypto / IP Companies.
2. Strategic Location: Cyprus is strategically located at the crossroads of Europe, Asia, and Africa, providing a gateway to these markets. The island has excellent air and sea connections to major business centers, making it an ideal location for businesses with international operations.
3. Business-Friendly Environment: Cyprus has a business-friendly environment, with a relatively simple and straightforward company registration process, a flexible legal system, and a highly skilled workforce. Additionally, the country has a stable political and economic climate, which can provide a sense of security for businesses looking to invest.
4. Access to EU Markets: Cyprus is a member of the European Union, providing businesses with access to a market of over 500 million consumers. Companies registered in Cyprus can take advantage of EU trade agreements and regulations, which can help to reduce trade barriers and increase market access.
5. Low Operating Costs: Cyprus has relatively low operating costs compared to other European countries, including low labor costs, affordable real estate prices, and low energy costs. This can make it an attractive location for businesses looking to reduce their overhead and improve their profitability.

It’s important to note that each business has its own unique set of circumstances, and there may be additional factors to consider when deciding whether to register a Cyprus company. We can certainly assist you when making such decision.

You can also read an interview with the Head of the Cyprus office for MUFG Investor Services on Why Cyprus Ticks More Boxes Than Competitor EU Countries In Attracting Foreign Businesses which gives you a good understanding on the great benefits of registering a Cyprus Company and also setting up substance in Cyprus.

Accounting & Tax Requirements

After the company has been registered in Cyprus, it is important to ensure that it complies with the accounting and tax requirements of the Cyprus statutory laws.

All companies in Cyprus are required to maintain proper accounting records, including books of accounts, financial statements, and records of transactions.

The financial statements must be prepared in accordance with the International Financial Reporting Standards (IFRS), and they must be audited by a licensed auditor.

Additionally, companies must file annual tax returns and pay corporate income tax, which is currently set at a rate of 12.5%. Cyprus also has a value-added tax (VAT) system, which applies to businesses that are registered for VAT. VAT returns must be filed on a quarterly basis, and the VAT rate is currently set at 19%.

Cyprus registered companies also need to submit an Annual Company Return (HE32). You can see more information on this requirement in our dedicated article here.

Failing to comply with the accounting and tax requirements in Cyprus can result in penalties, fines, and legal action, so it is important for businesses to ensure that they are fully compliant with the regulations.

For more information on the Accounting, Audit & Tax requirements you can read our article titled Do Cyprus Companies Need To Prepare Accounting Records And Financial Statements

Summary

Cyprus is an attractive destination for business owners who are looking to register a company in Europe. We do offer a favorable tax regime, a strategic location and a very efficient business environment, making it an ideal hub for you to register your Cyprus Company.

The requirements for company registration in Cyprus are straightforward, and the procedures are streamlined, making the process relatively quick and efficient.

Overall, Cyprus company registration offers a range of benefits for businesses, making it a popular choice for entrepreneurs looking to start or expand their operations in Europe.

How Asterisk Corporate Services Cyprus can assist

Asterisk Corporate Services consists of a team of specialized qualified professionals and lawyers who are well aware of the Cyprus incorporation process and legislation requirements and have been involved in a number of transactions both for small-medium sized businesses to large multinational organizations.

We are well aware what your Cyprus Company will require and are ready to provide quality, responsive service at a reasonable, value-for-money cost.

Contact us

Contact us at contact@asterisk.cy for more information on how we can assist you.

*Disclaimer

This article is provided for general information purposes only and is not intended to cover every aspect of the topic with which it deals. It is not intended to amount to advice on which you should rely and we recommend you to take advise from professionals before proceeding.