Cyprus Company Formation

Why you should register a company in Cyprus:

1. Easy Company Formation: Registering a Company in Cyprus is a rapid and straight – forward procedure with minimal bureaucracy. The procedure of incorporation with the Registrar of Companies is completed within a period of 7-10 working days.
2. EU Company: Cyprus is an EU Member State and therefore, having an EU Company in Cyprus can provide many privileges and benefits to your business within the EU Market.
3. Tax Benefits: What makes Cyprus an attractive location for businesses to establish their Company is the low corporate tax rate. Cyprus has one of the lowest corporate tax rates in Europe at a rate of 12.5% of corporate tax net on profits. Further, Cyprus provides the advantage of foreign Tax relief. Either through Double Taxation Treaty or though unilateral relief provided. Residents with foreign income who have been subject to foreign tax are entitle to a credit equal to the lower of the foreign tax and the Cyprus tax imposed on that income.
4. Strategic Location: Situated at the crossroads of Europe, Asia and Africa, Cyprus offers excellent connectivity and serves a gateway to these regions.
   

Steps for Incorporating a Company:

1. The first step is to provide to your service provider personal and corporate Due Diligence documents.
2. It is important to decide on the legal structure of your company, based on the intended business activities.
3. Choose the appropriate name for your company. The name should be approved by the Department of Registrar of Companies.
4. Once approved the name will be under reservation for a period of six months. If the period of six months is passed then, the name should be re-approved by the Registrar.
5. In order to initiate the procedure of incorporation, Memorandum and Articles of Association should be drafted and executed by the Members of the company. The M&A should must outline the objectives, rules and regulations of the company.
6. Once the M&A is drafted and executed by the Members, the lawyer will proceed with an affidavit to the Court and all the requested forms will be submitted to the Registrar of Companies.
7. Upon the incorporation of the company the Registrar of Companies will issue the following certificates:
• Certified Copy of Certificate of Incorporation
• Certified Copy of M&A
• Certificate of Director & Secretary
• Certificate of Registered Office
• Certificate of Shareholders

After Incorporation:

1. Registration to the Cyprus Tax Department: Every company is obligated within sixty (60) days from the date of its incorporation to obtain a Tax Identification Number (TIN) from the Cyprus Tax Department.
   
   Also, a company or a natural person that is registered or residing in the Republic of Cyprus, that has made taxable supplies of goods and services within the last twelve (12) consecutive months or will be making such taxable supplies of goods and services over the amount of €15,600 EUR in the next thirty (30) days, is required to submit a supplementary form for VAT Registration.
   
   
2. Registration with the electronic portal of the Republic of Cyprus: A Cyprus Company must create a corporate profile and obtain codes to the electronic portal of the Republic of Cyprus. The portal offers a wide range of services such as updating and/or submitting changes at the Registrar Companies, obtaining information about company’s real estate in Cyprus etc.
   
   
3. Declaration of the Ultimate Beneficial Owner: In order to strengthen the framework for the prevention of Money Laundering and Terrorist Financing Activities, the Registrar of Companies had established the Ultimate Beneficial Owner Register for corporate and legal entities. A newly incorporated company should submit the BO details to the Registrar of Companies within 30 days from the date of its registration. This is a procedure that is done online, via the creation and authentication of a corporate profile to the electronic portal of the Republic of Cyprus. The Registrar should be notified for any changes to the details of the BO within 14 days from the change.
   
   The information on the beneficial ownership is not accessible to the general public, only obligated entities that which have anti-money laundering duties under the Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2007 (188(I)/2007) have a legitimate interest in accessing the relevant information to those entities. Such obligated entities are: lawyers, auditors, administrative service providers providing fiduciary services and financial institutions.
   
   
4. Registration to the Social Insurance Services: In case the client is planning to employ staff in Cyprus, then the company have to be registered to the Ministry of Labour, Welfare and Social Insurance as an Employer. This will enable the client to make contributions towards Social Insurance and other social security schemes, in accordance with Cyprus law.
   
   
5. Opening of Bank Account: The client can decide to either open a bank account in Cyprus or abroad. This will enable the company to carry out business transactions and pay taxes.

Obligations of the Company:

The company and every officer of the company has an obligation to inform the Registrar of Companies of any changes to the company’s particulars.

Every once in a year, the company should prepare and submit its Annual Return up to and including its reference date and submit it to the Registrar of Companies along with a copy of the company’s Financial Statements. It should be noted, that if a Company delays to prepare and submit its Annual Return, then penalties will be imposed.

At the end of each tax year, the company must prepare Audited Financial Statements and submit them along with the tax return to the Tax Department.

Additionally, it should be noted that every company is obliged to pay an annual fee equal to the amount of three hundred and fifty euros (€350), by the 30th of June of each year. If the fee is not paid by the deadline, then penalty fees will be imposed.