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Cyprus

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    CYPRUS OFFSHORE COMPANY FORMATION

    Cyprus company formation is getting more popular each day. Cyprus is an Eastern Mediterranean island country located south of Turkey, north of Egypt, west of Syria and Lebanon, southeast of Greece, and northwest of Israel and Palestine. 

    Cyprus is also one of Europe’s most significant business centers due to its taxation structure, stable economy, and favorable regulations for international investors looking to create businesses here. 

    A Cyprus corporation can offer a tax-effective way to conduct business abroad if it is set up correctly. The following information is the best company structure for achieving your worldwide business goals.

    KEY REQUIREMENTS FOR CYPRUS COMPANY FORMATION

    Cyprus Company Incorporation

    TIMELINE OF CYPRUS COMPANY INCORPORATION

    Incorporation of a Cyprus Company
    1 to 2 weeks
    Corporate Bank Account Opening

    4 to 6 weeks

    Shareholders and Directors
    A minimum of one director is required for a Cyprus company. A natural person, a legal person, or a corporate organization can serve as a director. There are no limits on the director’s nationality or residence. A Cyprus Company Registration also requires one shareholder. They might be of any nationality or residence. Corporate stockholders, however, are not accepted.

    Company Secretary
    One secretary is required for Cyprus-incorporated companies. It is advised for tax purposes that the secretary be based in Cyprus, but this is not a legal requirement.

    Capital
    The minimum share capital for the incorporation of a Cyprus company is €1.

    Registered Office and Local Agent
    To establish a Cyprus limited company, you must have a registered office and appoint a local agent. This is done to guarantee that all official documents and notices are delivered.

    TYPES OF COMPANY IN CYPRUS FOR BUSINESS FORMATION

    LIMITED LIABILITY COMPANY

    • It can be either public or private, depending on the type of shares and the size of the organization.
    • In terms of share capital requirements, a private limited liability company is not required to have a minimum amount of money. Nevertheless, a public business is required to have a minimum share capital of about €25,629.

    FOREIGN COMPANY

    • Foreign corporations are invited to establish branch and representative offices in Cyprus, as well as subsidiaries that will function as extensions of their parent company.
    • Each structure has its own set of standards that the founders must meet.

    PARTNERSHIPS

    • In Cyprus, there are two types of partnerships that can be registered: general partnerships and restricted partnerships. These are not treated as distinct business entities from their owners.
    • Both forms of partnerships need a minimum of two participants and a maximum of twenty people.

    SOLE PROPRIETORSHIPS

    • This is the most basic company form accessible for people who desire to go it alone.
    • In the case of sole proprietors, there are no share capital requirements.

    PROCEDURE FOR SETTING UP AN OFFSHORE COMPANY IN SEYCHELLES

    A summary of the process of setting up a company in Cyprus can be seen below:

    No. Step Description
    1. Choosing the company name This name must be unique; thus we recommend that you verify at least three names before submitting the registration. 
    2. Filling out the required paperwork We will prepare the appropriate paperwork, such as the Articles of Association and Memorandum, for you to complete. 
    3. Submission of documents Submitting all of the above-mentioned documents and information to the Registrar of Companies and obtaining their approval as well as the company's Certificate of Registration;
    4. Register for tax Apart from tax registration, you will also need to register for social security, insurance. Due to the rather complex nature of the registration process of the above items, our consultants will assist you.
    5. License application Applying for the licenses depending on the industry or sector that your Cyprus company is operating in.

    If you need a more detailed explanation and assistance with the registration of your company in Cyprus, drop us an inquiry at +65 8756 2027. Our representatives will get back to you soon.

    ANNUAL REQUIREMENTS OF CYPRUS

    • Audited financial statements must be presented to the income tax office on an annual basis, and the audit must be performed by a Cyprus-licensed auditor.
    • The Annual Return must be prepared and filed with the Registrar of Companies within 42 days following the company’s Annual General Meeting.
    • In addition, an annual return must be submitted to the Registrar of Companies, together with a Greek Translation of the Financial Statements, detailing the Directors, shareholders, and registered office address.
    • Annual general meetings are necessary in Cyprus for corporations. These meetings, however, are not required to take place in Cyprus and can take place elsewhere in the globe.

    DOUBLE TAX TREATIES

    Cyprus has been one of the most appealing holding jurisdictions in the world after its accession to the European Union and the introduction of new business legislation in 2003. Cyprus has coupled its Global network of more than 75 double taxation treaties (2006) with an excellent holding regime. This extremely potent combination offers the following significant advantages:

    1. The ability to transmit tax-free profits, interest, and royalties from Cyprus to any country.
    2. Full tax exemption on capital gains received from the sale of shares in a subsidiary.
    3. EU Parent/Subsidiary Directive Application (providing a qualified tax exemption for the inter-EU cross-border distribution).
    4. There are no capital taxes on the capitalization of Cyprus companies.
    5. During the life of a Cyprus company, net worth taxes are levied.

    PROS AND CONS OF A CYPRUS COMPANY REGISTRATION

    PROS

    Low corporate tax

    Low corporate tax

    It is not expensive to run a business in Cyprus. The corporate tax is charged at a rate of 12.5%.

    This is the tax that would be levied on local income. There is no tax imposed on international revenue. As a result, investors can gain from this as well. When compared to other EU nations, offices are quite inexpensive to rent.

    Business Freedom

    Business Freedom 

    The Heritage Organization’s 2022 Index of Economic Freedom ranks Cyprus as number 23 in terms of the freest world economies, a measure of freedom enjoyed in business trade, monetary, financial, investment, and labor markets, placing Cyprus considerably ahead of Italy, Spain, Kuwait, and Bahrain.

    Transparency

    Transparency 

    In terms of tax treatment, Cyprus has been designated as ‘white’ by the OECD for its efforts to combat money laundering and tax evasion. As a result, all enterprises incorporated in Cyprus would be in compliance with tax legislation.

    Appropriate Regulatory Structure

    Appropriate Regulatory Structure

    Regulatory safeguards protect all types of investment in this country. There are no limits on the repatriation of investment back to the home nation. Aside from that, the country’s international commerce and investment operations are prospering.

    CONS

    Limited Local Market

    Limited Local Market

    Cyprus has a relatively small domestic market compared to larger economies. This can pose challenges for businesses that primarily rely on local customers or seek to penetrate the domestic market. Companies may need to consider international expansion strategies to access larger markets beyond Cyprus. 

    Property registration

    Property registration

    Cyprus, ranked 99th by the World Bank and the International Finance Corporation (IFC), barely makes it into the top 100 nations in the world for simplicity of registering property. Before submitting a contract to the Department of Lands and Surveys, all taxes must be paid, and a statement of transfer must be made to the Land Registry. With Relin Consultants’ help, we will assist you when it comes to registering your property.

    Economic Dependency

    Economic Dependency

    The Cypriot economy is heavily reliant on certain sectors, such as tourism, real estate, and financial services. Companies operating in these sectors may face increased competition and potential risks associated with economic fluctuations and sector-specific challenges. Diversification strategies and market research are essential to mitigate these risks.

    Relin Consultants has a team of professionals who are well aware of the regulations and legal requirements in Singapore. We will assist you in preparing all the paperwork for your business and opening a corporate bank account in Cyprus for your business.

    If you are interested in incorporating a new business in Cyprus, reach out to us at Relin Consultants for more information about our Cyprus company incorporation services.

    FAQs

    Can a foreigner establish a business in Cyprus?

    Yes, Cyprus encourages international investors in a variety of industries. The investment legislation permits foreigners to establish the same sorts of legal companies as domestic investors.

    What is the minimum share capital for a Cyprus company?

    The minimum share capital for the incorporation of a Cyprus company is €1.

    Is Cyprus a tax haven for offshore investors?

    Cyprus does, in fact, provide several advantages and benefits to offshore firms, as well as low tax rates, making it a popular choice for offshore company formation. However, it is not a tax or offshore haven like other popular jurisdictions.

    How to start a business in Cyprus as a foreigner?

    Four simple procedures make it easy for foreigners to launch a business in Cyprus.

    1. Select your preferred business type first. The most advised type of corporation is a private limited company.
    2. Get a company name that has been approved next.
    3. Third, deliver the necessary paperwork for establishing a Cyprus company to the Registrar of Companies. Documents needed include a signed statutory statement (form HE1), an MAA, any applicable forms, and a solemn declaration from the witness to the signatures.
    4. Obtain the Certificate and register your Cyprus firm.
    5. It typically costs little money to incorporate a business in Cyprus, and the process only takes a few business days.

    Which taxes are offshore businesses in Cyprus required to pay?

    Profits from outside sources are tax-exempt for offshore corporations, also known as non-tax resident companies, that are incorporated in Cyprus. Any income they receive from Cyprus is taxed at a fixed rate of 12.5%. Dividend income, interest income, and foreign currency gain are all exempt from taxation.

    How are IBC privacy policies implemented in Cyprus?

    The Cyprus Companies Registrar receives the company information as public records. In other words, a global search can be performed on the Cyprus corporate structure. If you need to maintain your anonymity, nominees are suggested.

    Do non-tax resident businesses in Cyprus have to submit audit and financial reports?

    An IBC in Cyprus is required to submit tax returns to the Tax Authorities and the Registrar of Companies even if it is not subject to local taxation. A Cyprus-based corporation must also submit the accounting records required by international accounting standards.

    To establish a Cyprus firm, do we require a license or permit?

    Yes, specifically for certain activities like banking, insurance, and financial services.

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