26 Sep Register Your Own Company In Cyprus
The incorporation of Cypriot companies is becoming more and more popular for investors and businessmen who find Cyprus as their preferable destination for living and operating their businesses. Apart from the numerous advantages anyone can enjoy in incorporating a Cypriot Company, Cyprus is seen as as the ideal location to develop business relations with other businessmen from Eastern Europe, Asia, Africa or the European Union.
As a firm based in Limassol, we are able to provide clients with all legal services in relation to the incorporation and establishment of a Cypriot Company of whatever size and nature. Below we have set the current steps needed in order to successfully establish a Cypriot Company for a client, through the Cyprus Registrar of Companies.
1)Name application of the Company
The first step for registering a Cypriot company with the Cyprus Registrar of Companies is to submit a name application stating the preferred name the client wishes to name his company. It can take between 3-4 working days to get a name approved. Name applications can be rejected due to the similarity with other Company names already existed and registered to the Registrar of Companies. Moreover, all Cypriot Company names must end with the word LTD or LIMITED.
2) Memorandum and Articles of Association:
Each Cyprus Company must have a Memorandum and Articles of Association, which is the document prepared by an advocate stating the objects, purpose and nature of the company as well as the regulations and how the proposed company will be managed. All shareholders must sign the pages of the Memorandum and Articles of Association where it states their name. It must be noted that there is no minimum or maximum share capital, and the share capital may be denominated in any currency.
3) Directors, Shareholders and Registered office:
Every Cyprus Company must have at least one director, one shareholder, a secretary (corporation or individual) and Registered office. There is no minimum number of directors but the number of shareholders is limited to (50) fifty. The Registered office of the proposed Cypriot Company must be of an address situated in Republic of Cyprus.
4) Time frame:
After the approval of the name of the Cypriot Company, the Cypriot company may be registered within 7-10 working day, provided that all necessary documents and application forms are correctly submitted to the Registrar of Companies in Cyprus.
5) Registration fees and other fees:
Apart from the advocate fees, stamp fees the client need to pay registration fees to the registrar of companies for the Registration of a Cypriot Company. Registration fees depend on company’s authorized share capital. Furthermore, each year a Cyprus Company has to submit to the Cyprus Registrar of Companies an annual return and must also pay an annual renewal fee knows as annual levy which is fixed to the amount of €350 (Three hundred fifty Euro)
6) Tax duty:
A Cyprus company has a duty to be registered to the Inland Revenue Office in order to get a tax number. Also company have to register to the V.A.T Department in order to get a VAT number if they have VAT taxable transactions (i.e. Investment companies, Holding companies are excepted form VAT). Afterwards, audited financial accounts have to be prepared each year in accordance with the International Financial Reporting Standards and must be audited by a Certified Private Accountant. VAT returns have to be submitted every three months.
Why Register a Company in Cyprus?
Foreign Companies that are looking to set up their businesses in Cyprus can benefit from numerous advantages in registering a company in Cyprus. Being a member of the European union from 2004, foreign investors view Cyprus as their route to EU markets but also an attractive destination to operate their business.
More specifically, the islands excellent infrastructure, the high quality of services, the flexible taxation system, the political stability and many more have made Cyprus an ideal regional business center, while its well-educated workforce, the low cost of living and easy lifestyle have made investors apart from operating their business, to move their family with them to reside in Cyprus.
The Cypriot Government in attempt to bring more foreign investors in Cyprus has amended legislation in order to benefit investors either with tax incentives, residence and work permits.
However, some numerous incentives and tax reasons for using a Cyprus company include:
- Member state of the EU
- Double Tax Treaties with more than 45 countries.
- Modern tax regime acceptable by the EU.
- One of the lowest corporation tax rates in Europe (12.5%).
- Low Set Up and Operating Costs for companies.
- Dividend income is exempt from corporation tax.
- Effective tax on royalty income of 2.5%.
- No capital gains tax on profit from sale of securities.
- No withholding tax on payments to non-residents (dividends, interest and royalties).
- Only 20% of profits generated from IP rights (royalties) are subject to tax
- Wide treaty network and use of EU Directives.
- Restructuring legislation in line with the EU Merger Directive extending to companies in non-EU countries.
- Added commercial value and monetary benefits due to ability to register for VAT.
- International business center with efficient legal, accounting and banking services.
- Advanced Telecommunications network and infrastructure.
For any questions regarding the incorporation of a Company in the Republic of Cyprus contact us at info@cmcylaw.com
Note: The above article does not constitute a legal advice and may not be relied upon for such purposes. Readers are recommended to take appropriate legal advice on the above subject matter.