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Set-up In Cyprus

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Cyprus Company Formation

Many people think of Cyprus as a prime location when it comes to setting up their business as it has numerous benefits making it a strategic move. Service providers and E-commerce businesses highly contribute to the number of successful companies in Cyprus along with high interest from triangular trade companies, shipping or ship owning companies and crew management. 

Cyprus, a member of the European union is often called a ‘centre of excellence’. This is referring to the amount of international business activities and the specific expertise they have that spread over a wide span of industries.

If your company is related to or has interest in:

  • buying, selling or investing abroad;
  • seeking to expand to other countries;
  • e-commerce;
  • triangular trade;
  • retaining copyright or intellectual property (IP);
  • service provider activities;
  • shipping ; or
  • crew management;

Then Cyprus would be a prime location with minimal risk for your company formation.

The Benefits

There are many benefits when forming your company in Cyprus, such as:

 

  • An expat relocating to Cyprus is entitled to income tax exemptions on employment income. This will be up to 20% – 50% of the salary from any employment in Cyprus for 10 years (matter of conditions).
  • The payment received from providing services outside of Cyprus to a non-resident employer or to an overseas permanent organisation of a resident employer for over 90 days in a tax year is exempt from income tax.
  • Low social insurance contributions (employee and employer).
  • No tax on dividend and interest earnings.
  • Non-domiciled individuals are exempt from tax on dividend and interest income.
  • No tax on profits from the disposal of investments.
  • Tax exemption for profits occurring from the disposal of shares, bonds, and other similar financial instruments.
  • Reduced or no withholding tax on earnings received from overseas.
  • Reduced or no withholding tax rates on dividends, interest, royalties and pensions received from overseas (based on Cyprus’s DTT).
  • No tax on retirement gratuity
  • A specific tax regime on foreign pension income.
  • Lump sums received as a retirement gratuity are exempt from tax.
  • A Cypriot tax resident individual receiving pension income from services rendered abroad may choose to be taxed at a flat rate of 5%, on amounts exceeding €3.420 per annum.
  • Exemption from capital gains tax when it come to the sale of real estate.
  • Profits arising from the disposal of non-Cypriot real estate are exempt from capital gains tax, estate duty, wealth tax, gift tax and inheritance tax.
  • There is no estate duty, wealth tax or gift tax.

The Process

The company formation takes 10 to 15 days from the date of completion of due diligence procedure.

The principal registration requirements are found in the table below

Company LawCompanies Law Cap. 113
RegistrationA company must be registered to the Registrar of Companies.
Capital RequirementsMinimum authorised and paid up capital is €1. If such companies have a fully- fledged office in Cyprus, minimum capital is €10.000.
Company NameName approval is required by the Registrar of Companies.
ShareholdersOne minimum either physical or legal entity.  No bearer share may be issued shares on behalf of the beneficial owner(s).
Beneficial Disclosure/ NomineesIf confidentiality is required, a nominee/trustee company can hold the shares in trust for owner.
DirectorsMinimum one Director. Cyprus tax resident companies must appoint majority of local directors.
SecretaryEvery company must have a Secretary and if the company is a tax resident in Cyprus, Secretary must be local. A director can also act as Secretary. For practical purposes, a corporate body may be appointed Secretary.
Registered OfficeA company needs to have a registered office in Cyprus.
VAT RegistrationCompanies registered in Cyprus and whose income derive exclusively from sources outside Cyprus, are in general exempt from VAT registration. Cypriot registered companies however which have trading activities within the EU, may be required or voluntarily register for VAT and / or VIES purposes.

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