The Republic of Cyprus is an island country located in the Eastern Mediterranean. With a population of about 1.2 million, it’s one of the most populous islands in the region.
Coupled with the large population, the country’s well-developed socio-economic structure and low corporate taxes make it an attractive investment market for foreign investors. If you’re considering expanding your business internationally, Cyprus is a good option owing to its stable economy, low labor cost, and affordable office rentals. CompyCo is dedicated to helping you leverage Cyprus’ profitability by providing a hassle-free process to you.
Contrary to popular belief the beautiful, picturesque sub-tropical island isn’t just lucrative for tourism and real estate sectors. Its strategic position in the Eastern Mediterranean makes it a world-class maritime shipping cluster that connects three continents.
Cyprus has established itself as an important energy hub, attracting leading gas and oil giants with its newly-discovered natural resources.
Forms Of Companies In Cyprus
- LLC—The Cyprus Private Limited Company
- PLC—The Cyprus Public Limited Company
- Investment Holding LLC—Holding Company
- Representative Office—Non-operating Branch
- Trust—The Cyprus and International Trust
- Free Zone LLC—Larnaca Free Zone
What is the difference between LLC and PLC in Cyprus?
In Cyprus, companies might be considered limited by guarantee or by their shares. Either way, they can either be private or public.
The Cyprus Private Limited Company can have up to 50 members and may only have a single director. As a private limited company, you’re prohibited from issuing bearer shares or invite the public to subscribe for your company’s shares or debentures. The right to transfer company shares is also restricted, while the amount of your subscribed shares limit is the limit of each company member’s liability.
The Cyprus Public Limited Company can have an unlimited number of members, but they must have a minimum of 7. The minimum number of directors required for such a company is 2, and there is no restriction on the transfer of company shares. The public limited company must acquire a trading certificate from the Cyprus Registrar of Companies before it can start trading. Before your company can issue its shares or debentures to the public, it needs to issue a statement in lieu of prospectus. Share warrants can also be issued by the public limited company.
If you opt for a Company Limited by guarantee, every member’s liability is limited to the amount agreed upon in the Memorandum of Association. If the company goes into liquidation, this amount must be contributed to its share capital.
Fundamentals Of A Limited Liability Company
Corporate tax in Cyprus
VAT in Cyprus
Fundamentals of limited liability company in Cyprus
|Limited liability company||LLC|
|Minimum Share capital||1 EUR|
|Registered office required||Yes|
|Physical office required||No|
|Min. number of Shareholders||1|
|Min. number of Directors||1|
|Local Director required||No|
|Bank signatory must travel||Mostly yes|
|Timescale for company formation||10 days|
|Timescale for bank account opening||7 days|
|Timescale for obtaining VAT number||7 days|
|Statutory audit requirements||Yes|
|Shelf companies available||Yes|
How can I set up my company in Cyprus?
Setting up a company in Cyprus is an easy and straightforward process. As a businessowner setting up outside your jurisdiction, you can easily set up your company remotely.
The first step to getting your company off the ground is deciding which type of company suits the needs of your business activities. Once this is done, you’ll need to choose a trading name that’ll be registered with the Trade Register in Cyprus.
There are various documents you’ll need to submit to finalize your company registration in Cyprus, some of them are:
- A registered Cypriot address
- Notarized copies of passports of every shareholder
- A document of approval of the company’s trading name
- Notarized Memorandum and Articles of Association of the company
- Identification papers of the company’s director(s) and secretaries
- Tenancy agreement for the company’s legal address in Cyprus
- A copy of the bank statement that proves that the company’s share capital has been deposited.
The process of setting up your company can be done within 2 weeks and without the need for traveling, all you need is the support of an experienced company to guide you.
CompyCo offers custom solutions along the way, providing you with consultations with our experts, engagement planning to determine the optimal company structure, and a range of services that’ll make the process efficient for you.
With the help of an extensive network of experts all over the country, we’re able to provide you the insight you need to make the registration and bank account opening processes easier.
The final step to registering your company is acquiring the relevant licensing. We help you research, apply for, and obtain the necessary certifications and licensing to get your company started in no time.
Bank Account Opening
Opening a bank account is essential to setting up your business in Cyprus. CompyCo’s team of banking experts will handle the process of opening your company’s banking account, in some cases, without the need for your presence. We’ll work on your behalf to prepare and submit the documents, while updating and receiving feedback from you throughout the process.
Cyprus has both local and foreign international banks and we help you narrow down which ones would be best for you depending on your business activities. Through our valuable network of contacts, we support your company’s formation by connecting you with banking service providers who’ll readily set up your bank account.
CompyCo’s full range of banking solutions are tailored to your corporate banking needs, from completing the formalities and collecting documentation to representing you in account opening interviews.
For more information about opening a bank account, head over here.
Accounting & Taxation
Some of the accounting and taxation obligations to take into consideration are:
- In Cyprus, the tax year corresponds to the calendar year
- Financial statements must be submitted in Greek to the Registrar of Companies every year. This includes digital copies of your company’s profit and loss account, an annex, and a balance sheet.
- All Cypriot companies must maintain books of the total payments they have received, any expenses they incurred, details of debt and credit, and total purchases and sales.
- There’s a flat income tax rate of 12.5% on all net income for tax residents in Cyprus. This tax rate also applies to branches of foreign companies as well. The only difference is that these branches are exempted from branch tax payment remittances in Cyprus. Depending on your company’s social security costs and other expenses, various deductions may apply.
- The standard VAT rate in Cyprus is 19%. However, this can fall to 0%, 5%, or 12% based on the type of product or service your business has to offer. Certain goods and services are exempted from VAT payment.
- All invoices issued by business owners and traders in Cyprus must contain specific VAT information, this includes:
- The VAT number of the supplier (each company is issued a VAT number with the format of the country code CY, followed by a 9-digit number which ends with a letter)
- The VAT rate applied
- The amount of money collected as VAT
How can you employ staff in Cyprus?
A combination of favorable business climate and an availability of various jobs make Cyprus an ideal place for both employers and employees. If you’re looking to employ a Cypriot resident while your when you set up in their jurisdiction, CompyCo can help you out.
Our experts have experience with securing quality, highly-trained employees in every country in the world and Cyprus is no exception. Using our incredibly high standard of evaluation, we shortlist the most suitable candidates for your business, as well as hire, onboard, and retain them on your behalf.
We provide all services related to employing and payroll in Cyprus. We can help you register your company as an employer to hire a team to run your business’s operations. CompyCo can also service your needs if your foreign company only needs to employ one person to work from home. In this situation, we might avoid local company registration and set your non-resident company as an employer. Our team will provide everything from the employment agreement to payroll services, catering to all your HR service needs in the most efficient manner!
Have any questions? Take a look at our HR services page for more information about our International HR services!