by Andria PapageorgiouCyprus Company Formation
A. Cyprus main Company Types
1. Limited Company (LTD)
- no minimum share capital requirement
- number of shareholders can be between one to fifty
- the company must have at least one director and a secretary
- annual accounts must be audited and filled either in Greek or English language
2. Branch
- foreign company responsible for all liabilities of a Cypriot branch
- branch required to register with Registrar of Companies and CY Tax department
- accounts to be filed annually, in Greek or English
3. Partnership
- general partnership: between two to twenty members
- limited partnership: at least one partner with unlimited liability
- required to register with Registrar of Companies and Cyprus tax department
B. Uses of Cyprus Companies
A Cyprus registered company can be used in various ways supporting the needs of the company’s operations. Cyprus registered companies can have activities related to:
- Imports/exports
- Services providers
- Online shops
- Tech Start-Ups
- Finance companies
- Shipping companies (Merchant Shipping)
- Property Holdings
- Investment Companies
- Holding companies
- Intellectual Property Holding
C. Registration Timeframe
The formation of a Cyprus company usually takes 8 working days. More specifically:
- Day 1: Application to the Registrar of Companies for the company name approval.
- Day 3: Name approval for the authorities; completion of memorandum and submit online to the Registrar of companies for approval.
- Day 7: Issue of company’s official documentation. (Certificates of registration, certificate of board of directors and secretary, certificate of shareholders and office address, Authentication of company memorandum and Articles of association)
- Finally, the application to the Tax department for Tax Identification Number is submitted. Also, the application for Bank account opening in Cyprus.
After the registration of the company, it takes approximately 3 to 5 working days to open a bank account, given that all required information and documents are available to the Bank.
D. Registration Process
- You will need a registered address in order to setup a company in Cyprus. Our firm has the capacity to help you find an office space, without the need for you to look around.
- You don’t need to visit Cyprus in order to register your company. Everything can be arranged from your country and we can take care of it. Our experts will communicate and advice you via email or a teleconference and then sent you the paperwork to be signed.
- There is no minimum requirement of shares capital to start your Cyprus company.
- The documentation needed to register your company are:
- A certified copy of Passport or ID
- A certified copy or an original utility bill, as a proof of address.
- A reference letter from a bank institution, lawyer or accountant for the good standing of the beneficial owners.
- A questionnaire provided from AP Law Firm.
- A recent CV
- Last year’s tax return
E. Fees and Obligations
The annual fee to keep a company active is 350 Euro and is paid to Cyprus company registrar via the online portal or via your services provider.
Annual Reports and Audited financial Statements have to be submitted online to the Cyprus company Registrar department in 28 days after the end of the fiscal year.
Cyprus companies have to convene at least one Directors meeting per year. This meeting is mandatory. The first annual directors meeting of the company has to take place in 18 months after the registration date of the company.
A Cyprus company has to be registered to the Tax department and issue a Tax Identification number within 60 days after the registration date.
The annual Tax return form has to be submitted 15 months following the year end.
The yearly tax has to be paid in three instalments on the 31st of July, the 31st of December and the last one on the 30th of June of next year. All Cyprus companies have to calculate and submit their own tax payments within the tax year.
Every Cyprus registered company is obliged to keep accounting records and prepare audited financial statements.
F. Taxation
- The corporate tax rate is 12.5%.
- No there are no any extra taxes.
- Given that your company employes only yourself, the tax rate will depend on the paid salary you will receive from your company. If you earn less than €19.500
You have no tax obligation. - How you will be taxed on your income in any of the below cases?
(a) Cyprus Tax resident, director and employee of the company.
Taxed on worldwide income if is over €19.500
(b) Non-Cyprus Tax resident, director and employee of the company.
Taxed only on Cyprus income if is over €19.500
(c) Cyprus Tax resident, director, employee and a shareholder of the company.
Taxed on worldwide income if is over €19.500
Dividends are exempted from income tax and Cy withholding tax, but will pay National Health Insurance Scheme on 2.65% from 01/03/2020
(d) Non-Cyprus Tax resident, director and shareholder of the company.
Taxed only on Cyprus income if is over €19.500
Dividends are totally exempted from Cyprus.
G. Banking
For account opening, it usually takes approximately 3-5 working days from the day the signed documents from beneficial owners are delivered to the bank.
The paperwork needed to open up a company bank account are the below:
- Company certificates (Shareholder’s certificate, registered office, Incorporation certificate, Directors and secretary certificate)
- Memorandum and Articles of association
- Identification documents of the beneficiary person (Id, Passport and proof of permanent address)
In case you are not a resident, you can still open a corporate bank account.
You can also get a connected card to the company’s bank account, when this is opened successfully.
The annual fees for the card depend on the cart type (i.e. Mastercard, Visa etc.).
You can also open a personal account, as well, given that all relevant required information is provided.
The fees when receiving payment in your company’s account depend on each bank’s fees policy.
In general, the fees of the company towards the bank depend on the each bank’s policies. Usually banks charge from €500 – €800 per year. A company is obliged to provide all requested information to the bank such as activities, owners, clients and customers.
H. Board of Directors
A Cyprus registered company has to have Director(s) , Shareholder(s) and a Secretary stated.
- At least one director has to be tax resident and annual meetings have to be held in Cyprus.
- You can have a single director for a Cyprus company.
- Anyone can act as a secretary.
- Anyone from Cyprus or abroad can act as a director, given that he/she has no criminal record.
I. Employment
It’s easy to employee staff in Cyprus. Cyprus has one of the most educated labor force in Europe.
Our firm can assist you and advice on the recruiting process.
- You can hire a non-Cypriot resident to work for your company. In the case of an EU citizen he has to visit Cyprus and obtain the yellow slip permit. If is a third country national (outside of CY/EU) then the application of visa is required and different employment criteria according to the Cyprus Department of Labour.
- The minimum wage in Cyprus is 870 Euro gross and after the continuous employment from the same company goes to 924 Euro. The hourly rate varies depending on the job profile starting from 4,55.
- The total insurance fee is 20.3%. The fee of 12% is employer’s responsibility and the rest of 8.3% is paid by the employee. Employer’s contributions include the Social Insurance Fee (8.3%), Redundancy Fund (1.2%), HR Development Authority Fund (0.5%) and lastly the Social Cohesion Fund (2%). Please note that these numbers may change year after year according to the Social Insurance Department.
J. AP Law Firm
Andria Papageorgiou Law Firm can assist you with the incorporation of you company, providing you the following services:
- Advice as to the most efficient Cyprus company structure.
- Preparation and submission of company documents.
- Opening of bank accounts (both personal and corporate).
- Maintenance and Management of the Company:
- Registered office address
- Company secretary
- Directors
- Alternate directors
- Nominee shareholders
- Legal advice and assistance/trustee services
Should you have any further questions, please do not hesitate to contact us at info@apapageorgiou.com.
Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any matter. Andria Papageorgiou Law Firm is not responsible for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this article and in no event shall be liable for any damages resulting from reliance on or use of this information.