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Company registration in Cyprus

Gateway Cyprus

Ease of Doing Business rank

#54 out of 190 countries around the globe

Index of economic freedom

#37out of 186 countries the globe

International Tax Competitiveness Index rank

#n/aout of 36 countries the globe

Why Cyprus

As soon as Cyprus became a full member of the European Union, the tax legislation of the country has undergone significant changes and no longer a classic offshore zone. However, the country still could offer a lot of tax benefits and incentives what makes Cyprus an ideal jurisdiction for long-term tax planning. Also, the EU state is distinguished not only by unique business prospects but also comfortable for long term residence purposes. Most of the population speaks English at a fairly high level which greatly facilitates communication. Special immigration opportunities for foreign investors made Cyprus as well considerable location in the EU for long term residence.

Item

Rate

Value Added Tax (VAT)

19%

VAT Reduced rate

5% - 9%

Corporate income tax

12.5%

Capital Duty

Land Tax

0.6-1.9%

Tax on dividends for individuals (approx.)

0-20%

Tax on dividends for legal person (parent company)

Individual income tax (tax on salary)

0-35%

Payroll tax

Social Security Contribution (paid by employer)

22.9%

Minimum salary per hour (brut)

4.55 EUR

Minimum salary per month (brut)

873 EUR

Average rental price for class A office spaces/ per 1 sq. meter

42.5 EUR

Share capital requirement for LLC

1 EUR

Share capital requirements

There are two main legal forms for companies in Cyprus. Private (LTD) and Public (PLC) which are equivalent to Limited Liability Company and Public Listed Company. PLC requires a minimum share capital of 25,630 EUR and 7 shareholders. In order to set up an LLC, minimum share capital is not required what makes doing business in Cyprus much easier.

Timeline to set up a company

Depending on the method is used to set up a company, the time required for the process may vary. If a private person establishing a company is a non-resident, the formation process might be done using a power of attorney or by physical presence:

By the PoA: 7 days after we get all the documents
By physical presence: 7 days

Business climate

The Republic of Cyprus is rightfully considered one of the most comfortable countries in doing business for foreigners due to the relatively stable tax environment, high information security, excellent infrastructure, the well-developed banking system and loyalty from the authorities. Simple and transparent procedure for opening a company and state policy aimed at supporting entrepreneurship contributes to the constant development of the island. The economy of Northern Cyprus is currently actively growing, the tourist inflow is increasing annually, the real estate market and the education sector are expanding. In 2009, Cyprus was officially included in the whitelist of countries by the Organization for Economic Co-operation and Development (OECD).

Besides, Cyprus is very attractive for holding companies having the right to engage in any legal activity. Holdings are exempt from taxes on royalties, interest, profits from the sale of securities. Also, the profits of all overseas branches/subsidiaries are taxed at a zero rate. At the same time, income from real estate is exempt from income tax and capital gains tax. Companies registered in Cyprus can be used to acquire real estate or other assets outside the island, as income from the sale of such assets is exempt from taxation in Cyprus.

Customs duties

As Cyprus is a member of the EU, custom duty rates are decided by TARIC - the common customs tariff in the European Union. Custom duty rates are based on the value of the goods and dependent on the type and the country of origin. Imports from EFTA countries, Switzerland and EU candidates are generally free of duty. Usually, duty rates stay between 0% and 17%.

2Free Trade Zones

3Labor force

4Business migration opportunities

Factors making Cyprus attractive in doing business in the EU are the simplicity of establishing, sustainable infrastructure, tax incentives for holding companies and low labor costs. Our team can help you to set up and maintain the business in Cyprus. We would be glad to become a one-stop-shop for your needs and assist with the entire company formation procedure including bank account opening and many other related services.

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What is included in the company formation service package

Company formation

Full turn-key assistance with setting up a company in EU by Power of Attorney (remotely) or by physical presence including such steps as verification of the company name; preparation of individual AoA, coordination of all necessary legal formalities and handling of the company entry into the commercial register.

Bank Account

The issue of opening a corporate account in the Bank for the company where non-EU residents are acting as directors and shareholders is still urgent. Our services for opening an account include an analysis of your business model, risk assessment and selection of the optimal Bank in the EU, collection and preparation documents package (in accordance with the requirements of the chosen Bank), representation of your interests in negotiations (if necessary).

Registered and Virtual Office

In order to set up a company in EU jurisdiction, the address of registration and virtual box services are required. In the frames of our solution, we provide an address in EU and assist with mail forwarding and other incoming physical correspondence from governmental authorities, Banks and third parties. Upon request, we could assist with EU phone number and receptionist answering on the calls.

Legal Templates

As soon as the company registration procedure is fully completed, the question of starting operating activities becomes relevant. In order to accelerate the process and save money on local advisors, we will provide all the necessary legal document templates drafted in accordance with EU law (NDA, employment agreement, service agreement, policies etc.)

Tax number obtainment

Registration of your entity within EU tax authorities and acquisition of VAT number and internal tax number (if applicable)

Dedicated consultant

Our aim is to make the moment of launching your business maximum simple, so it would be possible to concentrate on important matters and operate efficiently. Therefore, you will be provided with an individual consultant who will lead you through the entire process of the company formation and further will be assisting with other business-related issues and unique needs

Auxiliary services

Accounting and Taxation

Legal entity registered in EU obliged to conduct bookkeeping records and submit reports to the state authorities (Income tax and social security contribution report on employees, VAT reports on a monthly basis and annual reports). Jointly with our partners, we will be happy to assist your company on this matter and develop an optimal taxation model individually under your business.

Trademark registration

Registration of trademark within European Union Intellectual Property Office (EUIPO). Word mark, figurative mark, figurative mark containing word elements, shape mark, shape mark containing word elements, position mark, pattern mark, single color mark, sound mark, motion mark, multimedia mark, hologram mark.

Local Director

The need for local hired director often in demand across our Clients since it resolves issues with Bank compliance (if any arise) and makes it possible to conduct remotely operating activities more efficiently. We will carefully analyze your needs and weigh all the risks in order to conduct a search for a suitable candidate for the position.

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