Company incorporation in Cyprus

The Republic of Cyprus is one of the most optimal jurisdictions for conducting international business. Cyprus is a full member of the European Union, which makes it possible to carry out actual activities in any EU country.

By choosing Cyprus, you get the following benefits:

• Acompanyinaprestigiousjurisdiction, whichistrustedbyEuropeanpartners.
• Relatively low company operating costs.
• One of the lowest corporate tax rates in the EU – 12.5% of profits, payable in two transactions every 6 months + € 350 annual fee.
• Opportunity to obtain a Cyprus Tax Resident Certificate.
• Avoidance of double taxation with other countries.
• Opportunity to open an European bank account.
• 0% tax rate on repatriation of incomes from dividends, interest and royalties (if the rights are not used in Cyprus).
• Protection of intellectual property rights.
• IP-Box – a special regime for taxation of intellectual property, which allows you to decrease the corporate tax rate to 2.5%.
• VAT rate – 19%.

Conducting business in Cyprus is possible in several organizational and legal forms:

• Private Company Limited by Shares (Ltd);
• Public Company (PLC);
• Open Joint Stock Company (OJSC);
• Company Limited by Guarantee;
• General Partnership;
• Limited Liability Partnership;
• Private Entrepreneur;
• Branch of a foreign company.

The most popular form is Ltd – a limited liability company in which the shareholder is responsible within the limits of his or her contribution to the authorized capital.

 Feartures of Ltd in Cyprus:

• Number of shareholders – from 1 to 50 (there can be individuals and legal entities).
• Minimum capital is EUR 1.000, upon a company registration the one-time tax on the authorized capital is levied –6% of the declared amount.
• Minimum number of directors is 1, no maximum number is provided. A shareholder can be simultaneously a director. For a company to obtain the tax resident’s status in Cyprus, the majority of directors must be residents (the service of nominee directors is used for this).
• A secretary’s presence is required. It is desirable that the secretary will be a resident. Corporate secretary is allowed.
• Availability of a registered office in Cyprus is required. In order to open an account in a Cypriot bank, the company must have an office premise and at least one employee.
• Publicly accessible registry.

Company registration in Cyprus includes the following stages:

• choice of a name, verification and confirmation of its originality in a special register;
• preparation of documentation;
• payment of registration fees and charges;
• registration in the register;
• notarizationandapostilleaffixingondocuments.

It should be noted separately that Cyprus has long ceased to be a jurisdiction where you can open a company and an account as quickly and easily as possible. In the past few years the country legislation has greatly tightened the rules for working with non-residents, including in terms of compliance with shareholders, beneficiaries and directors. In addition, as of today, if not obligatory, then it is very desirable to have a substance, that is, a real office and company personnel.

VigoLex team monitors all tendencies of conducting business in Cyprus, therefore, it is ready for changes. VigoLex lawyers will advise clients wishing to start or structure an existing business in this country, based on the new legislative requirements, so that the business will be as profitable, comfortable and legal as possible.