Frequently Asked Questions

1.

About Cyprus

Why should you choose Cyprus for doing business?

In today’s economy, multinational companies strive to increase quality while reducing costs. Cyprus serves both purposes, providing a number of important advantages:
  • Freedom from Exchange Control
  • Cyprus is a full member of the European Union since 2004.
  • The labour force of the island is comprised of young, highly educated multilingual professionals.
  • Lowest corporation tax rate in the European Union, at 10% on net profits.
  • High Foreign Direct Investment (FDI) performance.
  • Macroeconomic stability with successful economic performance, with GDP growth rate well above the average growth rate of the EU.
  • Strategic location in the Eastern Mediterranean, facilitating partnerships and serving as the springboard for investments among Europe, Africa, and Asia.
  • Efficient legal, accounting and banking services, offering a world-class service.
  • Advanced telecommunications network and infrastructure.
  • Reputable international shipping centre.
  • A wonderful environment for a very comfortable standard of living.
  • Freedom from Exchange Control
  • A wide network of Double Tax Treaties
  • Access to EU directives
  • Membership of most international organisations and maintenance of friendly relations with the majority of developing and developed countries
  • Low set-up and running costs

2.

Cyprus Companies

Facts and Advantages

About Cyprus Companies

Only passport copy and proof of address* of the owner

 

*Proof of address is any recent document in country of permanent residence where the name and residential address of the person is indicated. It can be a recent utility bill, or a bank account /credit card, bank reference or local authority tax bill (less than 6 months old). Also any kind of public document can be used as Proof of Address in which name and address are clearly indicated

It normally takes about 10 days to incorporate a new company in Cyprus

Please estimate additional 3 days to approve by the Registrar the name for your future company

Alternatively, you may request from us a list of already approved names.

Already established companies (Shelf Companies) are available at any time of request and could be immediately used.  

Cyprus Shelf Companies especially if they are two or three or even more years old, can give your business more value and more credibility to Bankers, business associates, clients, lawyers, and accountants etc. as the more years a company appears to be on the market the more credibility it bears. With a Cyprus Shelf Companies you can start trading fast

Please send us an e-mail requesting the list of available shelf companies.

No, you don’t have to.  All communication and documents exchange can be done via e-mail, fax or courier in case of originals.

No minimum applies.  Recommended at least €1000

0.6% on Authorized share capital

For private companies the maximum is fifty

You do not have to, but it is strongly recommended, because a bank account becomes an additional evidence of the fact that the company is managed and controlled from Cyprus.

It is important since only companies that are managed and controlled from Cyprus are considered Cyprus tax residents and enjoy the relevant advantages

  • Common shares of par value
  • Preference shares
  • Redeemable preference shares
  • Non-voting shares

Classes of shares permitted

Classification of Cyprus companies:

Companies Limited by shares

The liability of the shareholders is limited to the amount, if any, unpaid on the nominal value of the shares they have taken up or in case the shares issued at a premium, to their nominal value. Once the shares are fully paid there is in general no future liability.

Companies Limited by guarantee

The liability of each member is limited to the amount guaranteed to be contributed to the company in the event the company goes into liquidation. Such companies are usually non-profit organizations.

Private Companies

Is a Company which by its Articles of Association:
- Restricts the right to transfer of its shares and;
- Limits the number of its shareholders to 50 and;
- Prohibits invitation to the public to subscribe for its shares or debentures

Public Companies

A public Company must have at least 7 shareholders (there is no maximum) and 2 directors.
Have minimum capital of €25.630
Obtain a Trading Certificate by the Registrar of Companies before commencing business and issue a prospectus before issuing any shares or debentures to the public
Have a name ends with the word ‘’Public Limited’’ or ‘’Plc’’

One director.

The director is advisable to be Cypriot for establishing Cyprus residence so as to benefit from the Cyprus beneficial tax regime.

*Where there is only one director, the company secretary must be another individual or corporate entity unless the same person is also the shareholder of the company.

No restrictions. Regulated by the Articles of Association. Alternate directors are permitted.

Yes.
The secretary is advisable to be Cypriot for establishing Cyprus residence so as to benefit from the Cyprus beneficial tax regime
Where there is only one director, the company secretary must be another individual or corporate entity unless the same person is also the shareholder of the company.

Yes. The company’s registered office should be based in Cyprus

You can remain fully anonymous by appointing nominee shareholders, directors and a secretary. The interest of the beneficial shareholder can be safeguarded by the issue of a declaration of trust by the nominee in favour of the beneficial shareholder or shareholders.

Where nominees are used, the disclosure of the beneficial shareholders or real directors is not a matter of public record, and the names do not need to be disclosed.

The directors of the company will however when opening a corporate bank account be required to disclose the ultimate beneficial shareholders of the company. The disclosure of this information to the bank does not mean that the information is available to the public. The Banks will never disclose information to anyone unless specifically requested to do following a particular order issued by the courts of law in Cyprus. Such incidents are usually indicated upon suspicion of money laundering or in connection with terrorist organisations

The registration of a company in Cyprus, requires that the company’s file at the Registrar’s office must contain the details of the directors, shareholders, company secretary, and registered office.  This information is open to inspection by the public. By appointing nominee directors and shareholders (i.e. persons to act on behalf of the beneficial owners), the identity of the beneficial owners of the company remains private. The identity of the beneficial owners will only be disclosed to a local bank if the company chooses to set up a bank account in Cyprus. No information relating to the identity of the beneficial owners is disclosed to any third party or government authority, unless it is in relation to a properly authorized criminal investigation.

If you choose to appoint nominee Directors and/or Shareholders, then for your protection you will get the document known as ‘Declaration of Trust’ signed by the Nominee Shareholder indicating that he is holding the shares in a trustee capacity and that he has no rights on those shares.

As the officers of the company (Directors and Secretary) are controlled by the shareholders of the company, the above Trustee document enables the clients to remove the Directors.  Same applies to the company Secretary.

The most popular form is the use of Cyprus companies as holding company. But Cyprus companies are also used a lot for trading, financing and licensing activities.

The Cyprus Holding Company is used as a vehicle which holds shares in other companies and enjoys the following main advantages:

No tax on profits and gains, which results from the disposal of titles (shares, bonds, debentures etc)

Access to the ‘’EU Parent-Subsidiary Directive’, which may ascertain withholding tax exemption for dividend payments between EU-companies

Access to an Extensive Double Tax Treaty network

Income from dividends is exempt from tax (in most cases)

Profits earned in Cyprus from a permanent establishment abroad are exempt from tax

Losses of a permanent establishment abroad can be set off with profits of the company in Cyprus
Cyprus does not levy withholding tax over outbound dividends, interest and royalties

No tax is imposed on the liquidation of a Cypriot company owned by non-resident shareholders or by non-domicile resident shareholders.

The current year tax loss of one company can be set off against the current year taxable profit of another company part of a group which is tax-resident in Cyprus

Yes.

All Cyprus companies, whether Cyprus tax resident or not, are obliged to prepare financial statements according to International Financial Reporting Standards. These must be filed with the Registrar of Companies.

Also, based on the results of the financial statements, the annual tax returns must be prepared and filed with the Income Tax authorities

 

Accounts audited by accountants practicing in Cyprus.

Did you know that Cyprus not only has the lowest corporate EU tax rate (12.5%) but also the lowest permissible EU VAT rate (19%)?

https://en.wikipedia.org/wiki/Tax_rates_of_Europe

3.

Corporate Taxation

What is the corporate income tax rate for Cyprus Company?

Cyprus maintains the lowest corporate regime at the rate of 12.5% on clean profits of the company minus expenses.

Cyprus has various double tax treaties to avoid double taxation.  

In particular, extremely favourable treaties have been concluded with many countries for receipt of dividends, interest and royalty payments.  

Audited accounts must be filed with the Income Tax Office (not the Central Bank of Cyprus).

4.

Personal Taxation

About Cyprus TAX

Individual and companies resident in Cyprus are liable to income tax in accordance with the Income Tax Law ( Law No. 118(I) of 2002 , as amended) in respect of their worldwide income. An individual is resident in Cyprus, if he/she resides therein for a period or more which in aggregate exceed 183 days. A company is resident in Cyprus, if its management and control are excersised in Cyprus. Non- tax residents are liable to tax in respect of Cyprus source income only. However, non-tax residents having a permanent establishment in Cyprus may elect, if it is to their benefit, to be taxed in accordance with the provisions applicable to tax residents. The income liable to income tax includes, inter alia, trade income, income from salaried services, pensions, interest, dividends, royalties, any amounts of trade goodwil, etc. The Law stipulates for various exemptions, provided certain conditions are satisfied.
Special contribution for the defence is imposed in accordance with the Special Contribution for the Defence of the Republic Law (Law No. 117(I) of 2002 , as amended) on income, as stipulated below, which is derived by individuals and companies resident in Cyprus. An individual is resident in Cyprus, if he/she resides therein for a period or more which in aggregate exceed 183 days. A company is resident in Cyprus, if its management and control are excersised in Cyprus. The income upon which it is imposed, is restricted to dividends, interest, rents and the taxable income of public corporate bodies. The Law stipulates for various exemptions, provided certain conditions are satisfied
Subject to certain exemptions, capital gains tax is imposed in accordance with the Capital Gains Tax Laws 1980-2002, on capital gains arising after 1/1/1980, from the disposal of immovable property in Cyprus or shares of companies in Cyprus which own immovable property.
Immovable property tax is imposed in accordance with the Immovable Property Tax Law 1980 Νο 24/1980, as amended, on the value of immovable property in Cyprus, on the 1/1/1980. This value relates to the value of immovable property which belongs to an individual or a company, on the 1st January each year.

The income tax rates applicable and taxable income are available at TAX RATES on our website Special tax rates apply in certain cases. 

Dividends, interest, rental income (reduced by 25%) and taxable income of public corporate bodies. Rates are available on at TAX RATES, some information may be available only on the greek site.

Disclaimer: Our services are provided in cooperation with duly certified and accredited business partners and associates.