COMPANY FORMATION IN CYPRUS

Introduction to setting up companies in Cyprus

Although Cyprus is no longer the tax haven it once was before joining the EU, it remains a dream destination for many foreign investors. An efficient and sophisticated business environment, coupled with a corporate tax rate of just 10%, helps explain the country’s appeal. If you are considering setting up a company in Cyprus, please contact us.

What other factors make setting up a company in Cyprus so attractive?

The island has double taxation treaties with 27 other countries, including most of the high-tax countries in Western Europe and many states in Central and Eastern Europe. As a low-tax hub, Cyprus is a particularly effective location for businesses targeting emerging markets. Furthermore, the economy is strong and stable, and business costs are generally low.

What about political stability?

Cyprus remains divided as a result of the 1974 Turkish invasion, but this does not appear to have hindered the island’s economic development, at least in the Greek sector. GDP per capita in the Greek part was $21,600 (€15,400) in 2005, among the highest in the Mediterranean. GDP in the Turkish sector was about a third of this.

What are the most common types of companies in Cyprus?

Most investors choose one of the following types of company:

  • Limited liability company
  • Branch
  • Partnership (civil society)

What are the main characteristics of a limited liability company?

  • No minimum capital is required.
  • The number of members must be between one and fifty.
  • The company must have at least two administrators.
  • The annual accounts must be audited and published in Greek.

What are the main characteristics of a branch?

  • The foreign parent company is responsible for all liabilities of the branch in Cyprus.
  • Registration of the branch in the Commercial Registry is required.
  • The accounts must be disclosed annually, in Greek.

What are the main characteristics of a Partnership (Civil Society)?

  • General society: between two and twenty members
  • At least one of the partners with unlimited liability.
  • Obligated to register in the Commercial Registry.
  • It is not necessary to audit the accounts, but the books must be kept.

What about offshore companies?

Any private company based in Cyprus that is 100% foreign-owned is considered an offshore company, although the term International Business Company (IBC) is also used. However, there is no difference in tax treatment between an offshore company and a regular Cypriot company.

Accounting Services

What are the characteristics of banking services in Cyprus?

Cyprus is a major regional investment hub and has developed sophisticated international banking services to support it. Many international banks have branches here, and there are also several local commercial banks. The financial system is supervised by the Bank of Cyprus. For assistance opening a bank account in Cyprus, please contact us for more details.

How easy is it to hire staff in Cyprus?

The economy has strengthened considerably in recent years, fostering job creation and thus increasing the likelihood that foreign companies will find qualified professionals. The workforce is generally well-educated, and salaries are low compared to the EU average. If you need assistance with recruitment , please contact us ; our recruitment specialists are ready to help.

What is the regulatory framework like for those considering setting up a company in Cyprus?

Much stricter than it was until 2003, regarding offshore companies. Previously, foreign companies paid no corporate tax at all. Today, the island remains a low-tax hub for those considering registering a company in Cyprus, with a 10% corporate tax rate and low withholding tax rates – but the regulatory requirements are now on par with many other EU states. Our legal and tax experts can help you. All you need to do is contact us for advice on the benefits of setting up a business in Cyprus.

Are there financial incentives available for companies to set up operations in Cyprus?

Cyprus does not offer particularly generous incentives for foreign investors, although the government may argue that its low-tax regime is incentive enough in itself. However, various grants and loans are available to investors in some high-tech and traditional economic sectors. Furthermore, the Larnaca Free Trade Zone offers exemption from customs duties. In addition, there are personal tax breaks for expatriate workers.

How can I find out more about the benefits of setting up a business in Cyprus?

Our company formation services in Cyprus make it easy for you to set up a Cypriot company, so please contact us to help you with the process.