The decision to set up a business in an overseas jurisdiction is not one to be taken lightly. It requires thorough research on factors such as the intended target market, structural assessments, and financing opportunities.
Cyprus offers a favourable environment for many entrepreneurs from its booming property market to its growing financial services sector powered by the web-development and tech industry. Many foreign entrepreneurs and companies chose to re-locate their business or establish it permanently in Cyprus, viewing the island as a prestigious location for business operations.
Choose a Favourable Tax Regime
Cyprus offers several tax benefits for the running of a business:
- One of lowest corporate tax rates in Europe at 12.5%
- 0% tax on profits received from disposal of securities
- 0% tax on profits from the sale of property or sale of shares situated outside Cyprus
- A tonnage tax system for qualifying shipping companies
- Up to 80% tax exemption for qualifying income and expenditure from the R&D and licensing of qualifying intellectual property.
- A network of tax treaties concluded with other countries for the avoidance of double taxation.
- 0% withholding tax on dividends
- Non- domiciled individuals are exempt from tax on dividend and interest income for a period of 17 years.
- Foreign sourced dividends are generally exempt from tax when received by Cypriot tax resident companies.
Choose an EU Country for Business Operations:
Cyprus is a suitable choice for business set-up as a reputable member of the EU. Cyprus’ EU membership offers companies the advantage of Cyprus’ single market, free movement of people and trade of goods and services between countries in the EU.
Under the current landscape, numerous previously well know ‘offshore’ jurisdictions have been labelled as non-cooperative under the EU/FATF and have introduced economic substance regulations, where companies must establish an office with staff. These regulations are especially difficult to satisfy for remote jurisdictions such as Marshall Islands or the British Virgin Islands. Picking an EU jurisdiction can make matters more transparent and assist with establishing banking operations for your business.
Government Initiatives for New companies with foreign interests
The Cyprus Government has implemented various initiatives aimed at attracting foreign investment and enhancing business activity in Cyprus. Improvements include:
- Facilitating the procedure for registration of companies, registration with tax office and social insurance through the establishment of a single business facilitation unit, responsible for such matters;
- Assisting eligible companies (such as shipping companies, high-end tech companies, pharmaceutical companies etc.) to obtain temporary residence and employment permits for highly skilled third country employees and supporting staff;
- Introduction of the Digital Nomad Visa.
As a foreign entrepreneur or business owner you can chose to register a Cyprus private limited company by shares ( ‘Cyprus Ltd Company’)which tends to be the main type of business entity used to conduct business activities. The registration process is simple, quick and hassle free, not requiring your personal presence. Please view our Cyprus company formation package to begin the process.
- Company Name: company’s name must end in Limited or Ltd and must be approved by the Department of Registrar of Companies and Official Receiver ( the ‘ROC’)
- Company MAA: The memorandum and articles of association must be prepared by a licensed advocate in Cyprus and will specify the activities that the company can engage in and the rules governing the internal management of the company.
- Company Directors & Shareholders: There is no restriction on the nationality of directors or shareholders of a Cyprus Ltd Company and they can either be a natural or legal persons.
- Company’s share capital: There is no minimum legal requirement for the share capital of a Cyprus Ltd Company. For practical purposes, we always recommend that companies are registered with a minimum share capital of 1,000 euros divided into 1,000 shares of 1 euro each.
- Company secretary: The company secretary can be either an natural l or a legal person and is responsible for administrative matters concerning the company.
- Company office: A Cyprus Ltd company may operate from remotely from abroad or may have a fully-fledged office in Cyprus.
- Company management & control: Management and control of the company will determine the tax status of the company. It is therefore customary for the majority of the directors to be Cypriot residents. In this case, the company is regarded as resident in Cyprus for tax purposes. We offer nominee services to our clients to assist with establishing management and control in Cyprus.
- Company registered address: Every company is required to have a registered office and address in Cyprus which should be registered and updated with the ROC.
- Company Accounting: A Cyprus Ltd company must submit audited financial statements to local tax authorities and the ROC on an annual basis. Company law requires that a company maintain proper accounting records in accordance with International Accounting Standards (IAS). A Cypriot auditor is required to be appointed. Our accounting team can assist with preparation of financial statements and submission of tax returns and any related accounting matters.
Re-domicile your existing company
Re-domiciliation permits an existing company to transfer its registered office to Cyprus and continue to operate as the same legal entity but subject to the laws of Cyprus.
- Business Continuity: From a commercial perspective, re-domiciling your company is beneficial because it keeps intact your company’s goodwill earned over the years of operations, its bank accounts, credit ratings, assets and clients. By re-domiciling you avoid the headache of having to restart your business operations from scratch especially in a new country with no prior established reputation.
- Procedural Ease: The process of re-domiciliation includes the following steps:
- Approval of the name of the company in Cyprus;
- Application for re-domiciliation of the foreign company to Cyprus and submission of all the relevant supporting documents;
- Issue of Temporary Certificate of Continuation, certifying the temporary registration of the foreign company in Cyprus;
- Issue of Permanent Certificate of Continuation, certifying the registration of the foreign company in Cyprus.
How Can We Assist?
Our team of professionals can assist you throughout the entire process, ensuring that you are ready to begin business in Cyprus. We offer a personalized approach, tailored to the needs of our clients and their business activities, and guide them through the transition period. Our services include:
- Preparing and submitting the relevant documents to the Cyprus Registrar and the Courts;
- Consulting on matters of compliance, restructuring your business operations and wealth;
- Assisting with opening of corporate and personal bank accounts;
- Communicating with local authorities such as the tax office, the VAT office and the ROC to facilitate the commencement of business operations;
- Registering your Company with social insurance, tax and VAT offices as necessary;
- Finding suitable office premises for business operations.
The information provided above by C. Pilyugin & Co LLC is intended for general information purposes only and should not be construed as professional or legal advice in any sense. It is advised that readers should refrain from acting only on the basis of the above information without first obtaining legal or professional advice on the subject.
Please send an email to [email protected] or fill out the form below to book a consultation with us.