Business Opportunities in Cyprus
Cyprus has a plethora of business opportunities that are booming with each passing day. As a European Union and Eurozone community member, Cyprus is an ideal investment gateway to countries like the Middle East, China, and India. In addition, it offers access to more than 500 million EU citizens.
Lying at the crossroads of three continents – Africa, Europe, and Asia, the country stands at a strategic location in the Eastern Mediterranean area. Cyprus is a member of the European Union providing easy access to the EU market with over 500 million customers. The island cordially welcomes U.S. investment and trade. Foreign direct investment by the Republic of Cyprus promotes a developed legal and accounting system. Besides, the Republic of Cyprus propagates a 12.5% corporate tax rate, much lower than other nations.
With a GDP of $27,556, Cyprus can be stated as a country with a healthy economy, suitable for company incorporation in Cyprus. The advanced infrastructure, telecommunications, and networking allow seamless business operations. To start a company in Cyprus and take complete advantage of the business opportunities, you must comply with the local rules and regulations. Here is a detailed guide on Cyprus’s new company incorporation.
Benefits of Starting a Business in Cyprus
Before you initiate a business in the country, know the advantages of doing business in Cyprus.
Low corporate tax rate
Among all the EU countries, Cyprus has the lowest corporate tax rate. In addition, the country offers full tax exemptions on capital gains, dividends, profits, and withholding taxes. The territorial tax system of Cyprus levies a tax on locally-sourced income.
Multiple investment opportunities
Being a popular tourist spot in Europe and the Mediterranean, the country has a popular real estate business. Some popular business sectors in Cyprus include agriculture, gas, and fishing.
Access to local and EU talent
More than 70% of the country’s population speaks English, and it has an excellent ex-pat population. Companies establishing a business in Cyprus can take advantage of the educational qualifications of the population and expand their business. Besides, the workforce is affordable, dynamic, and young enough to carry on business tasks.
Tax incentives for innovation and investment
The Cyprus government has developed the Cyprus IP Box, approved by the European Union to set up innovative and high-technology ICTs. The purpose of this IP Box is to exempt tax up to 80% of profits on research-based expenditure. Others can deduct 50% tax for investment in certified companies.
Requirements for Starting A Business in Cyprus
The requirements to do business in Cyprus are highlighted below:
Visa and work permit
One of the primary components of the Cyprus company incorporation requirements is the work permit, which is as follows:
Cyprus Work Permit
- It is for foreign nationals except for citizens of the European Union, Norway, Iceland, Switzerland, and Liechtenstein.
- It can be obtained after approval from the Cyprus Department of Labour and Civil Registry and Migration Department.
Cyprus Work Visa
- Companies can apply for a work visa after entering Cyprus for long-term employment and residence.
- Find the Cyprus consulate or embassy to know about the necessary documents required for the process.
Cyprus Residence Permit
- It allows you to live in Cyprus legally for more than 90 days.
- Register in the Local District Office of the Aliens and Immigration Unit of the Police Department.
The company’s name must be unique to be considered by the Trade Register.
In exceptional cases, the Companies Registrar approves company names with appendixes ‘international’ or ‘national.’
The company cannot use names like municipal, cooperative, privileged, or have any connection to the government.
The Companies Registrar in Cyprus takes almost ten days for business name reservation.
For the reservation procedure, the applicant must fill out the EE1 trade name registration form and submit it in person or via mail. Along with this, he also has to submit the registration fee.
Every company has to maintain a registered office address in the Republic of Cyprus to which official letters are sent.
To register the company address, you must fill up the HE2 form and the company incorporation application.
The business capital required to set up a company in Cyprus depends on the type of company you choose. No capital investment is required for a private limited liability company in Cyprus. However, the public limited liability company requires a minimum share capital of approximately 25,630 EUR. Again, for subsidiary companies, the minimum share is 26,000 EUR.
Directors and company secretary
The number of company directors and shareholders in a business organization in Cyprus depends on the type of business you are creating. In a private limited company in Cyprus, you need one director and shareholder. The public limited companies in Cyprus must have at least two directors and seven shareholders.
Types of Business Structures in Cyprus
Before you set up an offshore company in Cyprus, here are the different types of business structures that you need to know:
Private company limited by shares
- Can have 50 shareholders
- Cannot transfer its shares to others
- Public subscription to its shares is not allowed
- Allows a single shareholder to register a private company
Exempt private company
- Formed by a company and a corporation
- Shareholders cannot exceed more than 50
- Shares held only by the company
- The director belongs only to the company
- Filing accounts with annual returns is not required
- Sanctions loans to directors without any statutory restrictions
Branch and subsidiaries of foreign company
- Extension of parent organizations
- Must fill in an article of association and a certified copy of the memorandum within the first month of its operation
- All articles to be submitted in Greek
- Can claim benefits of Cyprus Double Tax Treaty
- Facilitates cross-border investment and trade
- The partner companies of Cyprus are of two types – general partnership and limited partnership.
- A general partnership company can have two to twenty members. There is no minimum capital requirement.
- A limited partnership company consists of one or more general partners holding unlimited and limited liability.
- One individual runs the sole proprietorship business with no employees.
- They can conduct their trade under a registered business name and are solely responsible for all the business debts.
Company Registration Process
The steps to incorporate a company in Cyprus are pointed out below:
Step 1: Choosing the type of company
- The Department of Registrar of Companies and Intellectual Property under the Ministry of Energy, Commerce, and Industry is responsible for registering your company online.
- On the website, choose the type of company you want to establish. To do so, you must pay attention to essential factors like the business’s name, company address, business capital, and the like.
Step 2: Approval of company name
- Select a suitable company name for registration and ensure it is unique.
- In any case, if the name of the company you choose has already been used, you must take consent from that particular company before using it.
- If the company name breaches international trademark regulation, the Comptroller will reject it.
- A public limited company should have the word ‘limited’ or ‘LTD’ with the company name.
Step 3: Registering company process
For the company registration, these are the documents that you have to submit either in person or online:
- Institution of Declaration of Conformity duly signed by the lawyer
- The article of association and foundation written in Greek
- Name approval consent
- Translation of documents by a certified translator
- Submit EUR 165 for companies with share capital and EUR 250 for companies without share capital
- Form HE5 for a public limited company by paying an additional EUR 20
Step 4: Recommendation certificate
- The registration will be published in an official gazette after the registrar of companies verifies the documents
- After issuing the certificate of incorporation, these are the certified documents that you will get:
- Certificate of membership
- Certificate of directors and secretary
- Registered office management certificate
- Certified copy of the certificate of recommendation
- Certified copy of the founding and Articles of Association of the company
Step 5: Tax and VAT registration
- Your company’s tax registration should be done within 60 days of starting operations. Here, you will get a tax identification number.
- Get the company registered for VAT. If the transactions of goods cross a year, the VAT increases by more than EUR 15,600.
How Much Does It Cost to Incorporate a Company in Cyprus?
The initial cost of incorporating a company in Cyprus is EUR 2500. However, no annual company cost will be required from the second year. The cost of company incorporation in Cyprus depends primarily on the type of business structure you establish.
- For a tax-resident LLC company, the initial cost is EUR 9,635.
- The initial cost of a branch of a foreign company is EUR 11,705.
- For PLC, the cost of EUR 12,335.
- For a free-zone company, the initial cost is EUR 10,535.
- For an offshore trust, the cost is EUR 15,585.
Are Foreigners in Cyprus on Certain Passes Allowed to Start a Business in Cyprus?
Yes, foreigners can do business in Cyprus with the help of three different visas. The Cyprus Work Permit is for all foreign nationals who want to do business in Cyprus. On the other hand, the Cyprus Work Visa allows companies to stay and conduct their business in Cyprus for a long time. Furthermore, with the Cyprus Residence Visa, you can live in Cyprus for more than 90 days.
Government Assistance for Foreign-owned Businesses
Here are some government grants for starting a business in Cyprus:
- The Cypriot government has set up the Research and Innovation Foundation. Their grants provide almost 85% of the capital for startups.
- The Industry and Technology Service of the government encourages entrepreneurship. They distribute funds under various programs like SME, women entrepreneurship, youth entrepreneurship, agricultural products manufacturing, and many more.
How Multiplier Can Help
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