Introduction to Incorporation Cyprus
Under the new legislation worldwide, income taxation of foreign-controlled offshore companies in Cyprus will depend on where they are managed and controlled and not where they are registered.
Cyprus being a full member of the European Union, offers a secure and well regulated financial environment for international clients. Cyprus has a exceptionally advantageous tax system and that's why it is emerging as the most favored jurisdiction in Europe to conduct international business. For the taxation in Cyprus ones net worth is non-existent in the country. This is very advantageous incentive to both individuals as well as organizations worldwide.
Here, the European rules on taxation apply. This is very beneficial to an individual or a company in Cyprus because one can take advantage of this double tax treaty to reduce their payable taxes.
Tax losses incurred by a company are also carried forward indefinitely and can be surrendered as group relief. Cyprus also charges low duty for the establishment of companies within its jurisdiction. For all off shore companies interest deduction for borrowing costs is provided. All the companies within Cyprus are granted Unilateral tax relief. This is for all the foreign tax that a company might have incurred while establishing itself in the country.
These advantages coupled with some added advantages of EU Membership truly justify The World Bank's characterization of Cyprus as the region's "miracle".
Why to register a Company in Cyprus ?
Cyprus has double-taxation treaties with 44 countries, including most of the high-tax countries of Western Europe, and many states in Central and Eastern Europe.
Being a low-tax centre, Cyprus becomes a particularly effective location for companies aimed at developing markets.
The economy is strong and stable, and business costs are generally low. Cyprus economy is classified as a high-income economy by the World Bank.
What are the main types of Company Formations in Cyprus ?
The following are the incorporation Cyprus formats that are chosen by most investors:
Main characteristics of a limited company in Cyprus :
No minimum share capital is required to set up a limited company.
The number of shareholders should be between 1 and 50.
The company must have at least one director.
Annual accounts must be filed in Greek language and should be audited.
Main features of a branch are :
The foreign parent company of the Cypriot branch is responsible for all liabilities.
The branch must register with Registrar of Companies.
Accounts are required to be filed annually, in Greek .
Main characteristics of a limited liability partnership are:
General partnership: It is between two to twenty members.
Limited partnership: At least one partner must have unlimited liability.
Must register with Registrar of Companies .
There is no requirement for audited accounts, but proper books must be kept.
A company is only considered to be a tax resident of Cyprus if it is being managed and controlled in Cyprus. A Cyprus company that is not managed and controlled in the country is expected to have the majority of the directors to reside and hold Board Meetings outside Cyprus.
Companies that are incorporated in Cyprus but are not tax residents of Cyprus are subject to zero taxation in the country.
Regulatory environment characteristics:
Regulatory environment is stricter, than it was until 2003, certainly as far as offshore companies are concerned. Before then, the Government of Cyprus applied the lightest of touches, and offshore companies paid no corporation tax.
Today Cyprus remains a business-friendly low-tax center for those considering company registration in Cyprus- with 10% corporation tax and low treaty withholding tax rates.
Our legal and tax experts team can help you steer clear of the rocks: all you need is to contact us for our friendly help and advice.
Financial incentives available:
Cyprus does not offer particularly generous incentives to foreign investors while registering a company , although the government may argue that the low-tax regime is a sufficient incentive in itself. Though, various grants and loans are available for foreign investors in certain high-tech and traditional economic sectors, and the exemption from customs charges are offered by the Larnaca free trade zone. Therefore, there are personal tax concessions available for expatriate workers.
Facilities available when registering a branch:
There are two main types of offices available in Cyprus:
Virtual offices – These offices will provide you off-site communication while allowing you to maintain business professionalism. Virtual offices in Cyprus include a central location in Nicosia, having telephone, fax and mail forwarding facilities.
Serviced offices – These offices include all the necessary business services and are ready for immediate occupation.
Recruiting staff in Cyprus:
The economy has powered ahead in recent years, creating near-full employment and raising the stakes for foreign investors seeking to attract good staff. The labor force of Cyprus is well educated and rates of pay are low compared to the EU average. Our recruitment specialist are at your service if you want to hire a staff for your company.
Documents and Information required for the incorporation of your offshore company in Cyprus:
Your proposed Company Name
The Director's full name, date of birth, address and nationality
Shareholders' full name and address
The objects of the company, specifying the the principal activity
The amount of capital used and the number of shares taken by each shareholder
Documents that you are required to provide:
1. Identity Proof - Passport, national identity card or photographic driving license.
2. Proof of residential address - Gas / electricity bill or credit card or bank statement dated within the last 3 months can be considered as a proof for residential address.
Incorporating an LLC:
An application for registration of a company must be carried out through a Cyprus Law Office. The formation procedure is as follows:
Approval of the company name..
Application to the Central Bank for Exchange Control approval must be sent.
The Memorandum and Articles of Association of the company in both Greek and English are prepared and printed.
We will draft and file the following documents with the Registrar of Companies for you: Memorandum and Articles of Association of the company (in Greek); forms HE1, HE2, HE3; approval of the Central Bank and the payment of the registration duty.
As soon as registration of the company is finalized, the Registrar of Companies will have to provide us with the Certificate of Registration in Greek and a copy in English, as well as certified copies of the list of shareholders, registered office, directors and secretary Memorandum and Articles of Association and a Certificate of Good Standing of the Company. When the Certificate of Incorporation of the Company is issued, the company can arrange for the first meeting of the directors for statutory matters, like appointment of auditors, legal adviser, opening bank accounts and of the Memorandum and Articles of Association, appointment of the secretary etc.
One director is required
The director can be of any nation.
The names of the initial directors that are stated on the records are lodged with the Registrar. Further appointment and resignation details are a lodged with the Registrar
Nominee Directors are allowed. In many cases, it is advisable to have a nominee Cypriot director (which we can provide you). This way, your company can claim Cypriot residency, and therefore take advantage of tax treaties of which Cyprus is a party.
You don’t require to appoint a local resident director, but many clients use our nominee Cypriot director service.
The shareholder can be of any nation.
Only 1 shareholder is required
Shareholder can also be a Corporation.
Nominee shareholders are allowed.
There is not a requirement to appoint a local resident shareholder, and taxable residence does not depend on the residency of the shareholders.
The subscribers of the company appear in the first company statutes, which are lodged with the Registrar. Changes in shareholders should also be registered.
Branch formation packages
We can handle every aspect of the branch formation for you. We also offer a branch formation package in which we take care of branch registration, local directors, issue of the certificates of registration, local representative and place of business in Cyprus, tax registration, VAT registration, and translation of documents into Greek using our expert knowledge in this field.
We offer unique one stop solution for all European formation requirements and also formation packages to set up multiple branches. We can organise everything for you inestablishing multiple branches including further increased exposure and global presence.
Ready Made Companies :
We also offer Ready Made companies for doing business, which can be reserved online at any time. The ready-made company is transferred over to the new owner and is ready to trade immediately upon signature of official forms by the new directors.
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