Incorporation of Cyprus Company
The interest for the incorporation of a Cyprus Company is continuously increasing as more and more businessmen or individuals discovers the advantages and benefits they can derive from their use. A combination of a reputable international business centre within the European Union, with high quality of support services from professionals, the generous tax incentives and a wide network of Treaties for the Avoidance of Double Taxation with more than 55 countries covering all central and eastern European countries, with some very favourable provisions, distinguish Cyprus from the other international business centres.
Our Cyprus lawyers guide and assist local and International clients in all steps of the incorporation process of a new Cyprus company or the formation of a complex structure Cyprus company.
The tax benefits of a Cyprus company are directly related to the concept of management and control whose general principle is that a Cyprus company needs to be managed in Cyprus in order to qualify for these tax advantages. This practically means that the majority of the directors have to reside in Cyprus and the meetings of the board of directors take place also here in Cyprus. Therefore in case that the foreign businessmen, who will establish a Cyprus Company, will not have their residence in the island, there is the necessity to appoint Cypriot directors. Our Cyprus lawyers can provide these services to its clients who will request so through its network of professionals. Our affiliate fiduciary company AMG Ethos Trust Ltd, which is licenced under the Cyprus Bar association, undertakes all management and administration tasks.
Under the guidance and scrutiny of the Cyprus Law Firm Andreas Mylonas & Co LLC lawyers and our associates company's accountants and auditors, we ensure that a client's company complies with all its legal and fiscal obligations.
Cyprus Double Tax Treaties
Cyprus maintains a vast network of double tax treaties which in their majority follows closely the model treaty created by the OECD which in combination with the tax advantages available have given to a Cyprus Company an active role in international business and transactions, mainly related to ex-Soviet countries and Eastern Europe.
The Cyprus tax system has been the spark in the fast growing Cyprus economy over the last decades. Attractive tax schemes allow foreign corporate clients and investors to achieve tax optimisation through legal and controlled means.
Completive advantage key points of Cyprus Company
Net profits of the companies who have their residence in Cyprus, are subject to tax at the rate of 12,5%, which is one of the lowest corporate tax rate within the European Union country-members.
No withholding tax on dividends, interest and royalties declared by companies to non-resident shareholders.
Full tax exemption on profits of companies if their management and control is exercised from outside Cyprus.
Full tax exemption on profits derived from dividends received from abroad or from profits of permanent establishments in other countries under certain circumstances.
Tax exemption on gains from the disposal of shares and other securities.
Unrestricted access to all EU Directives
80% exemption on profits from the exploitation or licensing and gains on disposal of Intellectual property
Full capital gains tax exemption on the transfer or sale of shares in a company, except where the company owns immovable property in Cyprus.
A wide network of Double Tax Treaties covering more than 55 countries.
Unilateral relief from tax in Cyprus on amounts of tax paid or withheld abroad.
No Controlled Foreign Corporation (CFC) rules and legislation
No Wealth Tax or Inheritance Tax
Private Limited Cyprus Company
- At least one
- Nominee shareholders permitted but nominees must be licensed
At least one
In certain cases director may also act as company secretary
Can be either a physical or a legal person
Local not required but strongly recommended
At least one General Meeting of the Shareholders each year, in addition to any other company meetings
General Meetings of the Shareholders, except for the Annual General Meeting can be held via resolution in writing
Cyprus Company Tax Facts
Corporation Tax Rate 12.5%.
Tax residency Based on the management and control concept;
Companies tax resident of Cyprus: subject to tax on worldwide income;
Companies non-tax resident of Cyprus: subject to tax only on income arising in Cyprus.
Withholding tax on dividends, interest and royalties: None to non-residents of Cyprus (for royalties only for rights used outside Cyprus).
Tax Rulings: Only on interpretation of Law.
Double tax relief;
Double Tax Treaties – over 55.
Gains on sale of shares and other securities: Exempt from any tax (except when the shares belong to a non-listed company owning immovable property in Cyprus).
Special Tax Schemes:
Cyprus Company Accounting facts
A Cyprus Company required to prepare financial statements in accordance with the relevant provisions of the Cyprus Companies Law, Cap. 113 and the International Financial Reporting Standards and file these with the Registrar of Companies. The main characteristics of the accounting regime of Cyprus can be viewed in the below table:
- Global Competitiveness Report
- Accounting standards: IFRS
- Submission of accounts: Required
- Audit: Yes
Consolidation: Yes – exemptions for parent companies of larger groups and small size groups
What our Cyprus Law Firm lawyers will need to know in order to incorporate a Cyprus Company
- The main activities of the Cyprus Company.
- Complete the KYC forms which we will send you.
- Directors and shareholders must provide a copy of the ID page from their passports.
- Proof of residence must be provided in the form of a utility bill or bank statement.
- Each beneficial owner, director or shareholder will be required to submit a reference letter (please ask for a template).
- Each beneficial owner will be required to submit a brief CV.
- Apply to the Registrar of Companies to approve your company name, or choose from our name list which is already approved.
- Once the name has been approved, the company formation documents will be submitted and your Cyprus Company will be up and running in as little as 2-3 days.
- Alternatively and if you need to start business now, just choose one of our available shelf companies and you will be doing business today.
For more information please contact us. We would be delighted to meet you and learn more about your activities, the issues you face and your plans for the future.