Why Register a Company in Cyprus?
here are many reasons for someone to register a company in Cyprus including the fast and easy procedure of registration, taxation advantages as well as anonymity advantages relating to the ultimate beneficial owners.
It should be noted on the outset that the most common form of company being registered in Cyprus is the company limited by shares meaning that a member (a shareholder of the company) is liable only for the amount remaining unpaid, on the shares’ owned by the member.
There is no distinction between offshore companies and domestic companies as both of them are in essence companies limited by shares.
Ease of setting up the company:
The procedure of setting up the company is easy. You can either buy a shelf-company, where the process is automatic or alternatively you can register a company from the beginning. The second way of registering the company involves the following easy steps:
- Purposes: We will require you to provide us with a description of the purposes and activities of the company. These for example may relate to the provision of services to the sale of goods/products. They can also be a combination of activities of general application. These will allow us to provide tailor-made articles of association.
- KYC: Under the Regulations governing the legal profession in Cyprus we have to follow standard KYC requirements. This means that prior to registration, you will have to provide us with a completed form of information such as the copy of shareholders’ passports (if the shareholder is accompany we require the certificate of incorporation), residential address (if a company we require the certificate of the registered office).
A similar procedure applies in order for us to proceed with the appointment of Directors as well as the Secretary of the Company. All documents not in the English language must be translated, certified and apostiled in accordance with the Hague Convention.
- Name Approval: A name is sent for approval to the registrar of Cyprus Companies. The name may take up to 6 days to be approved. If not approved the process has to be repeated. For this reason we usually advise our clients on the likelihood of the name being accepted.
- Registration of Company: After this process, we proceed with the registration of the Company under the name approved by the registrar of Cyprus Companies. This process takes approximately another 5 working days.
Unlike other tax-favourable jurisdictions which may impose low corporate income tax, Cyprus is a trusted tax-efficient jurisdiction with a wide range of double tax treaties in place, offering one of the most advantageous tax systems in the EU.
Cyprus’ corporate income tax rate is at 12.5% and is the lowest in the EU. The EU Parent-Subsidiary Directive has also played a significant role in eliminating withholding tax.
Furthermore, there is no tax on dividends when the shareholder receiving the dividend is not resident or domiciled in Cyprus. The same applies when interest is paid to non-resident companies. In relation to royalties which are paid to companies not resident in Cyprus, there is no withholding tax payable unless specific exemptions apply. An added advantage of Cyprus’ tax system is that, in the absence of a Double Tax Treaty, it offers unilateral tax credit.
Last but not least, profits from the sale of securities are also exempt from taxation in Cyprus.
If anonymity of shareholders is required, the company’s shares may be held on trust by individuals or companies. It should be noted however that such trusts may need to be registered (without of course disclosing the identity of the ultimate beneficial owner) with the Cyprus Bar Association. It should be noted that we always require to keep all the information of the ultimate beneficial owners of the shares.
After we register a company in Cyprus, we can offer a range of other services which include secretarial services, fiduciary services, opening of bank accounts with banks in Cyprus or abroad. You can find more about the services we offer at the corporate section of our website.
This article is given for information purposes only and it does not constitute legal advice. For further information and advice please contact Mrs Maria Papandreou at firstname.lastname@example.org.