Cyprus company formation

cyprus company formation 1

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Cyprus company formation key features

Advantages for Non-residents Traders

Foreign Investment

Cyprus provides a modern, diverse and investor-friendly environment for foreign direct investments. Cyprus offers foreign investors the opportunity of utilizing the country, not only as an effective jurisdiction for routing investments within the EU, but also as a portal for investment outside the EU, particularly into rapidly growing economies such as those of Eastern Europe, Africa and the Middle East.

The government has a liberal foreign direct investment (FDI) policy for both EU and non-EU nationals. Cyprus has simplified administrative procedures for assisting foreign investors, and there are no limitations in terms of a minimum level of investment and/or percentage of foreign participation in most sectors of the economy. Consequently, foreign companies may invest and establish business in Cyprus on equal terms with local investors.

Cyprus company formation

Tax Incentives

Cyprus provides a simplified, effective and transparent tax regime that is fully compliant with EU laws and regulations. The Cyprus tax system offers the following benefits to qualifying investors:
A 12.5% corporate income tax rate – one of the lowest rates in the EU;
An exemption from tax for dividend income, under conditions that generally are easy to fulfill (no minimum holding period or minimum ownership percentage);
An exemption from tax on profits from foreign permanent establishments (PEs), under conditions that generally are easy to fulfill;
An exemption from tax on profits generated from the disposal of titles (including shares, bonds);
An exemption from tax on capital gains arising from the disposal of overseas immovable property;
An exemption from withholding tax on the payment of dividends, interest and royalties (except when intellectual property (IP) is used in Cyprus);
An exemption from tax on foreign exchange (FX) gains, with the exception of FX gains arising from trading in foreign currencies and related derivatives;
An 80% exemption from tax on profits arising from the exploitation and/or disposal of intellectual property;
An extensive network of tax treaties; and
Access to EU directives.

Personal Tax Incentives

An expatriate individual moving to Cyprus is eligible for a 50% income tax exemption on his/her remuneration from any employment exercised in Cyprus.

The exemption applies for a period of 10 years starting from the first year of employment, provided the employee’s employment income exceeds EUR 100,000 per annum. Expatriates that do not qualify for the 50% exemption may be eligible for a 20% income tax exemption (which is applicable until 2020).

Remuneration from rendering services outside Cyprus to a non-resident employer or to an overseas PE of a resident employer for more than 90 days in a tax year is fully exempt from tax.

Additionally, an expatriate, “non-domiciled” individual moving to Cyprus for the first time may be fully exempt from tax on dividend and interest income for the following 16 years (see notice below).

Taxable Income and Rates

An individual is subject to Cypriot income tax based on his/her tax residence status. An individual who is tax resident in Cyprus is taxed on income accruing or arising from sources both within and outside Cyprus. An individual who is not tax resident in Cyprus is taxed only on income accruing or arising from sources within Cyprus.

An individual is subject to SDC if he/she is both Cyprus tax resident and Cyprus domiciled. An individual is treated as domiciled in Cyprus for the purposes of the SDC if he/she has a domicile of origin in Cyprus based on the provisions of the Wills and Succession Law (in general, an individual born to a Cypriot-domiciled father), with certain exceptions, or if/she has been a Cyprus tax resident for at least 17 out of the 20 years immediately prior to the tax year of assessment. An individual that is “non-domiciled” in Cyprus is not subject to the SDC.

Cyprus offshore companies top benefits


1. A Company in Cyprus can be registered in approximately 5 working days.


2. The cost of incorporation is very low; our Limassol offices offer you 2 Special Company Packages, Business and Premium, at highly attractive prices.

3. You can get a new company certificate such as a Certificate of Incorporation or a Good Standing Certificate, the same day; and in English and Apostilled.
4. Use of a Nominee Director and Shareholder is allowed, for full confidentiality and anonymity.
5. The share capital of the company does not have to be fully paid in cash at the time of incorporation. You can pay it up later at any stage.
6. It is an EU company, and as such it is acceptable by all countries and serious companies in the EU, and of course all over the world.
7. Its annual corporate and maintenance costs are very low; we offer a very comprehensive management package that includes administrative, legal and accounting services.
8. You can open a bank account for a Cyprus company in any country you want.
9. You can get an EU Vat registration number in 48 hours.
10. In case you decide to appoint Nominees, you can have full Power of Attorney to carry out all or any of the Company’s operations you want.
11. You can incorporate the company without having to visit Cyprus even if you are going to be a Director yourself.
12. You can have a virtual office in Cyprus as the business headquarters of the company, a dedicated telephone line, fax, email account, and office space to meet clients.
13. You can close down a Cyprus company with a very simple procedure.
14. You can operate a Cyprus company remotely, from the comfort of your office in your own country.
15. A Cyprus company pays only 12.5% tax on its net profits if generated within Cyprus, otherwise, its corporate tax is 0%. Cyprus is a low-tax jurisdiction not a Tax Haven.
16. A Cyprus company pays 0% tax on dividends paid out to the shareholders.
17. A Cyprus company pays 0% tax, on all dividends received from any of its subsidiaries.
18. Cyprus does not impose income or capital gains on profits and gains derived from the disposal of securities, irrespective of whether the profits and gains are considered to be of revenue or a capital nature! (*)
19. Cypriot companies are exempt from taxation on foreign exchange (FX) gains, with the exception of FX gains arising from trading in foreign currencies and related derivatives!
20. A Cyprus company pays 0% on all profits by operating any permanent establishment abroad, such as a hotel, a chain of restaurants, shops etc.
21. A Cyprus company pays only 2.5% tax on all profits from possession or trading in Intellectual Property rights, such as patents, trade names, trademarks, music or sports or scientific rights etc.
22. Incorporation of a Cyprus company gives the right to the Real Owner and his family members to a long-stay visa for two years (renewable) and a work permit. In 7 years to a Cyprus – EU passport!
23. A Cyprus company can be re-domiciled abroad to any other country.
24. Cyprus has signed dozens of Double Taxation Avoidance Treaties all over the world.
25. If you need to settle in Cyprus, you will enjoy a beautiful country with a mild climate, no crime rate, a hospitable population, plenty of human recourses for your needs, fantastic cuisine and tasty fruits and vegetables.
(*) Securities, as defined in the law, include shares, bonds, debentures, founder’s shares, and other securities of companies or other legal persons and options over such securities.

Offshore bank account Cyprus

cyprus company registration benefits 3

Offshore bank account Cyprus

Cyprus is one of the jurisdictions we have protocols with several top major banks, allowing a bank account to be open remotely, without requiring the client to personally meet or visit the local branch.

In this regard, Eurofinanzza will provide you all the necessary assistance.

Cyprus Company Formation FAQs

Why form a company in Cyprus?
There are many reasons to form a company in Cyprus. One of the most attractive benefits is the country’s low withholding tax rate of just 5%. This makes Cyprus an attractive destination for foreign companies looking to minimize their tax burden legally.

In addition, Cyprus has a well-developed legal system and infrastructure, making it a safe and accessible place to do business. Companies formed in Cyprus also enjoy a high degree of flexibility, with relaxed requirements for shareholders and directors.

As a result, Cyprus is an increasingly popular choice for businesses of all types. Whether you’re looking to minimize your taxes or simplify your business operations, forming a company in Cyprus is worth considering.

What tax information to need to know for a Cyprus Company Registration?
Cyprus has one of the lowest corporate tax rates in the European Union, making it an attractive destination for businesses looking to relocate. When registering a Cyprus company, it is important to know the tax implications.

The tax authorities in Cyprus are relatively relaxed, but it is still necessary to file annual tax returns and pay corporate income tax. Capital gains are also subject to tax, but there are several exemption schemes in place. With careful planning, it is possible to make the most of Cyprus’s favourable tax regime.

One of the biggest benefits is that companies incorporated in Cyprus are exempt from personal income tax on their profits. This means that you can keep more of your hard-earned money. In addition, Cyprus has a favourable regime for immovable property transfer tax and value-added tax. As a result, incorporating in Cyprus can help you save significant amounts of money on taxes.

How to choose the company name?
When it comes to company registration in Cyprus, one of the most important decisions you’ll make is choosing the right name for your business. The name you choose will be used on all official documents and will be the first impression you make on potential customers, so it’s important to choose carefully.
Here are a few tips to help you pick the perfect name for your company:

First, consider using a keyword or phrase that describes what your company does. This can help customers remember your company and make it easier to find you online. For example, if you’re a web design company, you might want to include the word “web” in your company name.

Next, try to keep it short and sweet. A long or complicated name can be difficult for people to remember or spell correctly. And finally, make sure the name you choose is available – check with the Cyprus Companies House to make sure it hasn’t already been taken.

With these tips in mind, you’re sure to choose a great name for your company that will help you stand out from the competition.

What are the important roles that a Cyprus company should have?
What are the important roles that a Cyprus company should have

A company is a legal entity that is separate from its owners. The important roles of a company include the company director, corporate shareholders, and company secretary.

  • The company director is responsible for the day-to-day management of the company.
  • The corporate shareholders are the owners of the company and have the ultimate decision-making authority.
  • The company secretary is responsible for maintaining accurate records and minutes of meetings.

In addition, the secretary often acts as a liaison between the directors and shareholders. These are just some of the important roles that a company should have to function effectively.

How does the share capital work during the Cyprus company formation?
How does the share capital work during the Cyprus company formation

The share capital of a company is the funds that are invested in the company by its shareholders. This capital is used to finance the company’s operations and growth. The share capital can be either equity or debt.

Equity is the share capital that is raised through the sale of shares, while debt is the share capital that is borrowed from lenders. during the Cyprus company formation, the share capital must be a minimum of EUR 12,000. Capital gains tax is not levied on share capital gains.

An offshore company is a company that is incorporated in a jurisdiction other than its primary place of business. Offshore companies are typically used for tax planning and asset protection purposes. Financial statements are a set of reports that show a company’s financial position, performance, and cash flow.

Financial statements are an essential part of any business and are used by shareholders, creditors, and other interested parties to assess a company’s financial health.

What are the annual requirements for Cyprus company formation?
What are the annual requirements for Cyprus company formation

There are a few key annual requirements for companies registered in Cyprus.

First, all company documents must be filed with the Registrar of Companies. This includes the company’s Articles of Association, financial statements, and any changes to the company’s structure or management.

Second, all public limited liability companies must hold an Annual General Meeting (AGM). This is a meeting of the company’s shareholders, where important decisions about the company’s affairs are made.

Third, all foreign companies registered in Cyprus must appoint a Cyprus resident as their agent. This person is responsible for representing the company in Cyprus and ensuring that it complies with Cypriot law. By meeting these requirements, companies registered in Cyprus can continue to operate smoothly and effectively.

Where Cyprus is located?
Cyprus is an island country located in the eastern Mediterranean Sea. It is the third largest and third most populous island in the Mediterranean, and it is a member of the European Union.

Cyprus is located south of Turkey, west of Syria and Lebanon, east of Egypt, and north of Greece. The island has an area of 9,251 square kilometres (3,572 square miles) and a population of 1.2 million. The capital and largest city are Nicosia.

The official languages are Greek and Turkish. English is also widely spoken. Cyprus is a popular tourist destination due to its climate, beaches, and archaeological sites. The economy of Cyprus is reliant on tourism, foreign investment, banking, and shipping.

Offshore companies are common in Cyprus, as the country offers various tax advantages. However, this has led to criticism from the European Commission, as offshore companies can be used for tax avoidance or money laundering purposes. As a result, the Cypriot government has been working to increase transparency in recent years.

What are the most common business activities for an offshore company in Cyprus?
Cyprus is a popular jurisdiction for the formation of offshore companies due to its low corporate tax rate and attractive incentives for foreign investors.

The most common business activities undertaken by offshore companies in Cyprus are holding foreign investments, trading activities, and providing services. Offshore companies are often used as holding vehicles for shareholdings in other companies, as they can provide significant tax advantages.

They are also often used for trading activities, as Cyprus has a favourable double tax treaty network and a well-developed infrastructure.

Finally, many companies in Cyprus provide services such as consultancy, management, and marketing. The island’s location makes it an ideal base from which to provide services to clients in Europe and the Middle East.

How do ready-made offshore companies work in Cyprus?
Ready-made offshore companies are pre-registered companies that are available for purchase. Cyprus company registration is a simple process, and all of the necessary company documents can be obtained from the Registrar of Companies.

They are usually public limited liability company, which means that they have limited liability for their members. This type of company is ideal for those who want to start doing business in Cyprus but do not have the time or resources to register their own company.

Ready-made offshore companies can be bought and sold on the stock exchange, and they can also be used as vehicles for holding assets such as property or shares.

Why use qualified service providers to register your company in Cyprus?
Cyprus is a popular destination for foreign company looking to incorporate. The island has a favourable tax regime, and its membership in the EU makes it an attractive base for businesses looking to expand into Europe.

However, company registration in Cyprus can be a complex process, and it is important to use a qualified service provider to ensure that everything is done correctly.

A good service provider will help you to choose the right legal structure for your business, and they will handle all of the paperwork required to register your company. They will also provide ongoing support to help you comply with the Cypriot company law.

As a result, using a qualified service provider is the best way to ensure that your company is properly registered in Cyprus.

What are the steps to follow to establish a company in Cyprus?
Cyprus has a pro-business environment and is a popular destination for company formation due to its low tax regime, political stability and efficient infrastructure. The Cypriot company registration procedure is relatively straightforward and can be completed in just a few weeks.

To form a company in Cyprus, you will need to appoint a corporate service provider (CSP) who will assist with the incorporation process. The CSP will help to prepare the necessary documentation and file the application with the Registrar of Companies. Once the application has been approved, you will need to open a bank account and deposit the required share capital. Once these steps have been completed, your company will be officially registered and you can start doing business.

There are a few key things to bear in mind when setting up a company in Cyprus. First of all, dividends paid to non-residents are subject to a withholding tax of 10%. Secondly, Cyprus company registration companies must appoint a resident director. Finally, companies must maintain accounting records and prepare financial statements by International Financial Reporting Standards (IFRS). However, overall Cyprus is an attractive destination for company formation due to its favourable tax regime and pro-business environment.

How does company taxes for offshore companies work in Cyprus?

Offshore companies in Cyprus are subject to special defence contribution tax (SDC), which is levied at a rate of 12.5%. They are also subject to withholding taxes on dividends, interest and royalties, as well as on capital gains arising from the sale of shares. However, the tax department may grant a partial or total exemption from SDC and withholding taxes in certain cases.

To be considered a tax resident of Cyprus, an offshore company must satisfy one of the following conditions:

  1. it is incorporated in Cyprus;
  2. its place of effective management is situated in Cyprus, or
  3. it carries on business in Cyprus through a permanent establishment.

An offshore company that meets any of these criteria will be subject to corporate income tax at the standard rate of 12.5%.

The use of Cyprus companies – tax planning vehicle

The use of the Cyprus International Trading Company for International Tax Planning

Cyprus International Trading Companies

Cyprus’ a well-established international centre, has been critically assessed as constituting an attractive location for international trading companies from a tax perspective, among others. This is due to the enactment of the new Cyprus tax legislation, which is now compatible with the “acquis communautaire”. Cyprus laws and practices are now harmonized with the EU Laws and Directives, the Code of Conduct and the Organization for Economic Cooperation and Development’s recommendation on Harmful Tax Corporation, and more over its tax exemption on all incomes generated outside Cyprus.
Cyprus company formation business niches

New Tax Legislation

A uniform 12.5% corporate tax rate, applicable to the worldwide income, is now levied on all resident companies. This is the lowest corporate tax rate in the European Union and thus the most advantageous standard rate of corporation tax for Cyprus.

The new taxation status on Company is residence-based. A company is only ‘resident in the Republic’ if its business is centrally managed and controlled in Cyprus.

Therefore, under the new rules, a resident corporation is taxable on its worldwide income accrued or arising from sources both within and outside Cyprus if it is managed and controlled from Cyprus.

In view of the new tax legislation, also its Holding International Business Companies operating from Cyprus are now in a much more beneficial position because they can enjoy the benefits deriving from the tax exceptions as well as the corporate tax benefits by virtue of the new tax legislation.