How easy is it to set up a business in Cyprus?

How easy is it to set up a business in Cyprus?

One of the reasons why you should open a Cyprus company is that the country makes it easy for you to set up. The government is helping foreign investors in its attempt to attract foreign capital, especially by using an advantageous tax system and low red tape.

For Cyprus company incorporation, one has first to get a company name approved by the Cyprus Company Registrar. After this, a set of documents and forms are provided to get a proper license for the business.

Documents and Forms required by the Department of Registrar of Companies

  • HE1 Form
  • HE2 Form
  • HE3 Form
  • Memorandum of Association (notarized and elaborated by a lawyer)
  • Articles of Association
  • Passport copy of Directors and Company Secretary
  • Proof of office address

Once the Certificate of Incorporation is obtained, the registered company needs to obtain a Value Added Tax (VAT) Number by registering itself with the Tax Department. It is also required to obtain Social Contribution registration at the Ministry of Labor, Welfare, and Social Insurance.

Apart from this, the business environment in Cyprus is friendly to foreign investors. A company can be incorporated between 5 to 10 days, and a bank account can be opened in 10-15 days. Rents are low, electricity, salaries, VAT rates are also low.

There is a huge tank of university-educated experts to populate your business. Investment opportunities in Cyprus are booming at a rapid pace, and registering a business in Cyprus is simple, fast, and comparatively cheap when it comes to costs, compared to other countries.

Other Requirements of a Cyprus Limited Company

Limited companies are required to submit an Annual Return to the Registrar of Companies. The company must prepare its Annual Return (HE.32) within 14 days after the Annual General Meeting, and within a time limit of 28 days from that date must submit it to the Registrar of Companies. In effect, the Annual Return must be completed and filed with the Registrar of Companies within a time limit of 42 days from the Annual General Meeting of the company.

All registered Cyprus companies are obliged to pay an annual charge of €350 for the companies to be in good standing order and to remain on the Register of Cyprus companies at the Registrar of Companies.

Limited companies are also required to include financial statements audited or certified by officially authorized auditors or accountants and a declaration on the Income Tax Return. These requirements also apply to companies with no taxable income or dormant companies.

Benefits of Opening a Cyprus Company

Unlike most other countries in Europe, there are several benefits you get by opening and registering a company in Cyprus. Some of them include:

1. Low registration requirements: you don’t need all the requirements in the world to register a Cyprus company. The minimum requirements as earlier mentioned in this treatise are one director, one shareholder, and one company secretary. Interestingly, they don’t have to be locals.

2. Low corporate tax rate: Cyprus has one of the lowest EU corporate tax rates at 12.5%. The island’s advantageous tax rate, coupled with an extensive list of double tax treaties, places it high on the list of preferred jurisdictions for international tax planners.

International investors enjoy the benefits of the advantageous taxation system applicable to companies and individuals. Also, they can take advantage of the island’s network of Double Tax Treaties.

3. Legal system based on common law: Cyprus legal system is extensively codified and heavily based on English Common Law. As a result, business people from countries familiar with this legislation find it very easy to do business in Cyprus, especially as the English language is widely spoken and used. The Continental System of administrative Law has been introduced and applied under the constitution.

4. Great banking opportunities: The great banking opportunities the country offers makes it one of the most reputable international business centers. Commercial banking in Cyprus is of a very high level and follows the British model. Banks have very strong correspondent networks throughout the world and carry out traditional and specialized international financial transactions. Interestingly, opening a bank account is as easy as a breeze.

5. Housing, Schools, and Doctors: The availability of housing of a very high standard, hotels comparable to first-class international hotels, and very good English schools are added advantages for using Cyprus as a regional headquarter country or for establishing offices to carry out international operations. Moreover, overseas families using Cyprus take advantage of a good health system and an environment with a very low crime rate.

6. Friendly Relations: Cyprus entities enjoy great respectability all over the world because of the excellent international relations and the friendly relations the island has with Western European countries and North America, as well as with most countries in Central and Eastern Europe and the Middle East.

7. Low Operational Costs / Standard of Living: Repeated international surveys indicate that Cyprus has one of the lowest operational costs among the world’s international financial centers, but at the same time, it provides a fairly high standard of living.

If you want more information on how to start your business in Cyprus, please contact us by completing the form below, and we will get in touch with you.