Cyprus Company Formation (Full-Overview)

[Launder Expert]

Cyprus Company Formation: A Comprehensive Guide to Starting Your Business​

Cyprus' company formation is growing in popularity among entrepreneurs and businessmen. Cyprus has so many offshore companies because of its business-friendly environment and lower taxes. Cyprus company formation also includes attractive benefits for startups and small businesses.

In this article, we will discuss a step-by-step guide to forming a company in Cyprus and the legal requirements to register a company in Cyprus. We will also look into the tax benefits provided by Cyprus corporate law and the required documents for setting up a business in Cyprus.

Why Choose Cyprus for Company Formation?​

Cyprus is a popular choice among those willing to form a company. The main reasons for the popularity of Cyprus company formation are:

• Cyprus is located in the Eastern Mediterranean provides a gateway to continents like Europe, Asia, and Africa.
• Registering a company in Cyprus provides EU membership to the companies.
• Provides low corporate tax of 12,5%.
• Stable political and business environment.
• Has a network of Double tax treaties with everyone.

Overview of Cyprus Corporate Structure​

If a company registers in Cyprus company formation, it must have at least one director, a secretary, and a shareholder. If a company is private, it must have up to 50 shareholders. The board of directors must also handle both public and private companies.

Timeline for Cyprus Company Formation​

Cyprus company formation takes 10 to 15 days. This timeline includes submitting the application to the company's registrar, receiving official documentation, tax identification, and other processes, including opening bank accounts. Sometimes, these processes take longer.

Steps to Form a Company in Cyprus​

To form a company in Cyprus or register yourself in Cyprus company incorporation, one must follow the following steps:

1. Find a lawyer because, according to Cyprus law, only lawyers who are licensed by the Cyprus bar are allowed to prepare the Memorandum for the company.
2. Think of a name for the company and apply for it at the registrar.
3. Submit all the required documents to the registrar.
4. After submitting all the documents and paying the registration fees. The process of Cyprus company incorporation will begin.
5. Register with the tax department and open a bank account for the company.

Ongoing Compliance and Reporting Obligations​

A company under Cyprus company formation must:

• Open a business bank account
• Submit the tax on time
• Submit the annual and financial report on time
• Setting up a business in Cyprus
• Hire the employees and manage their payment

Legal Requirements for Cyprus Company Registration​

The legal requirements that are important for Cyprus company formation are:

1. A local company secretary.
2. At Least one shareholder and one director.
3. It is an unwritten rule that the company's minimum share capital requirement should be 5,000 euros.
4. Must have a local nominee director and shareholder.
5. The registered office address should be in Cyprus.
6. Submission of annual financial statements every year on time.

Required Documentation for Incorporation​

To form a company in cyprus, one must require the following documents:

• Application form
• Memorandum
• Proof of registered office address
• Certificate of shareholders
• Certificate of directors and secretary
• Reference letter from the lawyer, bank, or accountant

Tax Benefits of Starting a Business in Cyprus​

Here are some Cyprus tax advantages for businesses:

• Lowest corporate tax rate (i.e. 12.5%)
• Royalties for non-residents
• Business arrangement costs are less
• No withdrawing tax on non-resident

Costs Associated with Setting Up a Cyprus Business​

The registration of a company in Cyprus company formation starts from the submission of the application to the registrar of the companies. While setting up a business in Cyprus company formation, the costs include:

• The Registrar charges a one-time registration fee as low as 500 euros, and other companies charge between 1,200 euros and 3,000 euros.
• After completing the registration, one must pay the registration fee and stamp duty charges. The registration fee is 350 euros, and the stamp duty is 85 euros.

Common Types of Companies in Cyprus​

The most common types of companies in Cyprus company formation are:

• Private Limited Company
• Public Limited Company
• General Partnership
• Limited Liability Company
• Variable Capital Investment Company
• Cyprus International Trust

Frequently Asked Questions​

1. What are the benefits of Cyprus company formation?
After Cyprus business registration, a company will receive benefits like a low corporate tax rate (12.5%), the benefits of being a European member, and a tax regime that is favourable to the company.

2. How long does it take to register a company in Cyprus?
Registering a company in Cyprus takes 7 to 10 working days. The process includes document verification, company name approval, and other processes.

3. What documents are required for company formation in Cyprus?
The primary documents required for Cyprus company formation are the Certificate of incorporation, the company constitution, the form of all the directors and secretaries, and many more.

4. Can a foreigner open a company in Cyprus?
Yes, a non-resident or a foreigner can definitely open a company in Cyprus company formation. There are no residency restrictions in forming an international business in Cyprus.

5. What is the minimum capital required to start a company in Cyprus?
The minimum capital required for a public limited company is 25,000 euros, whereas there is no requirement for a private limited company, though it is recommended that a private limited company have a minimum of 1,000 euros.