Establishing a company in Cyprus

In Cyprus, a range of business entities can facilitate different business activities. The following are the key company types prevalent in Cyprus:

1. Private Limited Liability Company by Shares – This is the most common type of company in Cyprus. Investors’ liability is limited to the shares they own, as outlined in the company’s articles of association. It requires a minimum of one shareholder and a maximum of fifty, and public share offerings are not permitted. This type is especially relevant for non-European citizens, enabling the establishment of an offshore company for foreign investors, devoid of a physical presence in Cyprus.
2. Public Company Limited Liability by Shares – Similar to private limited companies, investor liability is restricted to share ownership. A minimum of seven shareholders is necessary, and public share offerings are allowed, with a minimum issued capital of €25,629.
3. Limited Liability Company with a Guarantee (No Share Capital) – In this structure, partners serve as guarantors instead of shareholders, without a share capital. Their liability is limited to their commitments in favor of the company’s debts during liquidation.
4. Limited Liability Company with a Guarantee (Share Capital) – such a company has share capital and according to its articles of association, the liability of its partners is limited on the one hand to the amount of shares they own, and on the other hand up to the amount that the partners undertook to transfer in favor of the company’s debts in the event of liquidation. Such a company can be both public and private. A public company can offer its shares to the general public.
5. Variable Capital Investment Company (VCIC) – Distinguished by shares with variable values, this company requires a license from the Cypriot Securities Authority (CySec) to operate as collective investment funds (CIFs). The number of partners can range from one to fifty, depending on public or private classification.

Company Registration Procedure

Irrespective of the chosen company type, the company registration application can be completed online through the Registrar of Companies’ electronic submission system. Essential accompanying documents include the employer’s identity card or passport copy, a Greek-translated memorandum of articles of association signed by shareholders, an employer declaration registration form for employee recruitment, and more. Information about directors and shareholders may also be needed. The registration fee is €165, or €235 for a non-share capital company, payable exclusively by credit card. Alternatively, the application can be mailed, requiring the same documentation along with a registered office address attestation. Mail registration costs €165, with a €100 expedited procedure fee.

Benefits of registering a company in Cyprus

Registering a company in Cyprus brings forth a plethora of compelling benefits. Notably, Cyprus holds a prominent position within the European Union, granting a pivotal advantage—a VAT exemption—on all trade activities conducted with fellow EU member nations. Furthermore, the avenue for investments throughout Europe is unencumbered by levies on profit transfers across borders.

Moreover, Cyprus has forged double taxation treaties with numerous global jurisdictions. These treaties serve to avert the quandary of dual taxation on diverse income streams, concurrently mitigating or even diminishing the tax deduction rates related to dividends, royalties, and interest disbursed in the signatory countries. While it’s noteworthy that a double taxation treaty between Israel and Cyprus has yet to be established, both nations are diligently collaborating to formulate and codify this crucial accord.

In the absence of a tax treaty between these two countries, an apparent strength, such as Cyprus’ attractive low corporate tax rate, could inadvertently transmute into a liability. Should control over an Israeli enterprise be substantiated, this could result in a dual taxation scenario—23% for Israel and 12.5% for Cyprus. This underscores the significance of engaging experts in the field to devise astute tax strategies, thereby abating tax liabilities and capitalizing on Cyprus’ advantageous corporate environment.

Setting the foundation for a company in Cyprus initiates with the registration of a foreign company. Subsequently, the pivotal step involves inaugurating a bank account within Cyprus, serving as the operational hub for the company’s endeavors.

Setting up the company incurs a relatively low cost, and the registration process can be remarkably swift—typically spanning between 5 to 10 business days—provided you diligently meet all the bureaucratic requisites stipulated by the registrar and ensure the timely submission of all requisite documents. To navigate this process seamlessly and optimize outcomes, it is advisable to enlist the expertise of professionals well-versed in this domain and intimately acquainted with the nuances of the Cypriot market.

Our firm offers assistance in setting up a company in Cyprus and in various other fields. Contact us and we’d be delighted to arrange an introductory meeting at your convenience.