Company Registration and Procedures in Cyprus

A Guide to Company Formation and Opening a Bank Account in Cyprus

The Republic of Cyprus is, in most cases, a paradise for entrepreneurs who need to set up a company due to its dynamic relationship with global trade, favorable tax rates, and strong legal framework. In connection with the above, registering a Cypriot company or relocating an existing business is the right decision.

However, there are always pros and cons to forming a Cypriot company, and these are certainly applicable in any country or jurisdiction (onshore, offshore, etc.).

Advantages of company formation in Cyprus:

The use of a nominee director and shareholder is permitted to ensure complete privacy and anonymity.
It is not mandatory to pay the entire registered capital of the company in cash at the time of incorporation. You can pay it later at any stage you wish.
A legal entity established in Cyprus is considered a company established by the European Union. Accordingly, this "belonging" is a good indicator for cooperation with serious companies worldwide.
Annual company expenses and maintenance costs are low compared to other countries.
The Cypriot company must also have a bank account, which you can open anywhere in the world, to be able to make payments for services/business/goods.
You can get your European Union VAT registration number within 48 hours.
If you choose to use nominees, you can receive a full power of attorney to carry out all or any desired activities of the Company.
Even if you will be the director yourself, you can register a legal entity without visiting Cyprus.
In Cyprus, you can have a virtual office as a headquarters, a dedicated telephone line, fax, e-mail account, and office space for meetings with clients.
You can remotely manage the established Cyprus offshore company while doing business on the other side of the world.

Tax advantages of the Republic of Cyprus:

- Favorable tax legislation: one of the lowest corporate tax rates in Europe, only 12.5% on profits;
- Exemption from participation in dividends;
- No tax is applied to non-tax residents in Cyprus for dividend distribution or interest payments and patent rights (when used outside of Cyprus);
- No social security contributions for shareholders;
- Dividends between Cypriot companies can be tax-deductible, tax deductions and dividends from foreign investments (based on easy-to-meet criteria);
- Capital gains tax is only levied on real estate located in Cyprus or on the shares of a private company that owns property in Cyprus;
- Gains from the sale of securities (including shares) are not taxable;
- – business reorganization (e.g., through a merger, acquisition, or division) is not taxed;
- Gains earned by a permanent establishment abroad (outside Cyprus) are not taxed. This fact once again proves the attractiveness of Cyprus for foreign investors;
- A company in Cyprus pays only 2.5% tax on all gains derived from owning or trading intellectual property rights such as patents, trade names, trademarks, music, sports, or scientific rights, etc.

The registration of a Cypriot company entitles the beneficial owner and their family members to a two-year long-term visa (with the possibility of extension) and a work permit.

A Cypriot company can be re-registered in any other country abroad.
Cyprus has signed dozens of double taxation agreements worldwide (with over 55 countries).

How to Open a Company in Cyprus?

Choose the right legal entity. The most important and first step in the process of organizing your business will be to determine the structure to be used. By understanding your business goals and activities, our team of dedicated consultants will recommend the most suitable legal entity for your business;
Select and reserve a unique name for a future legal entity with the Registrar of Companies;
Determine the amount of capital;
Identify future shareholders: The legislation governing the establishment of a company in Cyprus states that there must be at least one registered shareholder;
Appoint directors: there must be at least one director – directors can be of any nationality;
Choose a secretary: a company established in Cyprus must have a secretary;
Have a certified copy of the passport and a current utility bill of each of the owners and shareholders to meet the Anti-Money Laundering Requirements. This is necessary even if you plan to use a nominee service.
Register your office: every legal entity registered in Cyprus must have a registered local office;
Define the scope of activities of the future business: this action is necessary for the Memorandum and Articles of Association of the future company;
Based on the information above, prepare the necessary documents for incorporation;
The next step, with all the necessary documents, is to submit them to the Cyprus Registrar of Companies and for further approval of the documents provided by you.
Submit the relevant fees and get the result. If you provide all the necessary documents, information, and fees, you will most likely become the owner of a registered business in Cyprus.
The final stage of creating a new company is registration with the Tax Department. The Cypriot legal entity must also obtain registration for VAT and social security contributions.
Every business must have an open corporate bank account to be able to make payments.
Additionally, it is worth remembering that depending on the type of business you plan to do in Cyprus, permission may be required: you will need to apply for various special licenses or permits. It is the existence of such documents that will allow you to do business legally, for which you will spend some time to create. To avoid being distracted by the above (but such mandatory nuances), you should contact specialists who will take into account all your wishes and the formation of a Cyprus company smoothly!

Documents Required to Set Up a Company in Cyprus

Investors who want to organize their business in Cyprus should prepare the following documents and provide the following information to the Cyprus Trade Registry:

Name approval confirmation;
Original memorandum and articles of association;
Declaration form (known as form HE1);
Regarding the registered office address declaration form (known as form HE2);
Form containing details about the legal entity's directors and secretary (known as form HE3);
List of employees who will act as directors in the case of a public company (HE5).

At the end of the registration process, the following documents will be issued:

Certified memorandum and articles of association;
Incorporation documents;
Shareholders' documents;
Director and secretary certificates;
Registered office address document;
Certificates.

To register with the tax office, the Cypriot legal entity must provide the following documents:

Completed Form 162 for registration as a taxpayer, along with obtaining a Tax Identification Number (TIN);
Form 101 for VAT registration (to be filled out when the VAT limit is reached or with intentional registration).

Choosing a Business Entity in Cyprus

The most important and first step in setting up your Cyprus business will be to decide on the structure to be used. After understanding your business goals and activities, our team of dedicated consultants will recommend the most suitable corporate entity for you to conduct your business.

Depending on the type of legal entity you want to establish, you need to follow the relevant procedures and set up the most suitable company that will meet your needs.

Types of Companies in Cyprus

There are two types of companies that fall into this category: Private Limited Liability (Ltd) and Public Limited Liability (PLC). The above types of Cypriot legal entities differ according to the size and number of shares they own.

There is no incorporation requirement for a Private Limited company, there is no minimum amount required for capital shares. Shareholders subscribe for shares that have a suitable nominal value, monetary or non-monetary, and which cannot be transferred in return. The responsibility for the debts and obligations of the company is assigned to each member to the extent of the nominal value of their respective shares. The maximum number of partners for this type of legal entity is up to 50.

The minimum capital requirement for a Public Limited company is approximately €25,650. The main features of this type of company are the same as for a limited company, with the only difference being that there is no limit to the number of partners that can be registered. In addition, the shares can be freely bought and sold, and the minimum number of shareholders is 7.

Partnerships

Various amendments have been made to the law on partnerships; the most recent ones are stated in the Partnerships and Business Law.

There are three types of Partnerships: General Partnership, Limited Partnership, and Limited Liability Partnership (LLP).

For the first two types of partnerships, the requirement is 2 participants and a maximum number of 20. It is worth noting that there is no restriction on the number of partners who can join a Limited Partnership, although it is also mandatory to start with at least two.

In an LLP, the limited partners can be legal or natural persons, or both. It is required that at least one of them be a general partner who will be unlimitedly liable for the debts and obligations of the partnership. The remaining limited partners will not have liability for such debts and obligations, their liability will be limited to their contributions within their partnership shares.

Sole Traders

If you are one of those who want to manage companies and control all processes on your own, a sole trader is the most suitable choice. This is a business in its simplest form, and there are no requirements for registered capital for sole traders, and the liabilities belong solely to the business owner.

International Trust

International trusts are mostly used for tax planning purposes by non-resident settlors and beneficiaries as they offer full foreign ownership and do not issue income or estate tax. At least one of the trustees of this international trust must have permanent residence in Cyprus. In addition, it is worth adding that the trust property may include both movable and immovable property in Cyprus and/or abroad, and shares in Cypriot companies.

Additional Forms of Doing Business in the Republic of Cyprus: Branch, Representative Office, or Subsidiary

If any foreign legal entity is interested in entering the Cyprus market, the owners can create branches, representative offices, or subsidiaries that will operate in the country as a continuation of these companies. Depending on the agreement made between the shareholders, such additional economic activity can either operate as an extension of the original company or be established as a separate legal entity, for example, in cases where a foreign legal entity is a shareholder of a Cypriot company.

Choosing a Company Name for Cyprus Company Formation

When you decide to set up a company in Cyprus, one of the first and most important issues, besides choosing the form of the legal entity, is the choice of the company name. When choosing a name, do not forget the legal requirements behind choosing a legal entity name. Any name requires the approval of the Department of the Registrar of Companies and Official Receiver. A company name reservation in Cyprus is valid for six months. Within the specified period, the applicant can submit the remaining documents for company registration. In addition, the Trade Registry will keep the business name in its archives until the Cypriot company is dissolved and an application for liquidation is filed.

When and how to apply?

Obtaining approval for the proposed name for a new business will be one of the first steps to take when starting to set up a Cypriot company. The application must be made to the Registrar of Companies and Official Receiver Department in the prescribed manner and upon payment of the prescribed fee.

What information does the Registrar request?

The application includes details of the proposed name and a description of the nature of the business, the meaning of the words, and the names of the directors or partners. A company or trademark declaration should also be included.

Which names are allowed for a Company in Cyprus?

In general, you are completely free in choosing the name of your future business. A suitable company name in Cyprus must be unique, otherwise, the Trade Registry will not consider the application. The purpose of choosing a legal entity name is to identify that company and (at the same time) distinguish it from other service providers, so names will be rejected if they are objectionable, for example:

The name is similar to or the same as the name of another existing registered business;
A common name;
The name is descriptive;
The name is misleading (e.g., if it suggests a non-existent royal/national or international connection);
The company name represents a geographical location.

In addition, certain types of businesses are only allowed to use certain terms in their names; for example, words such as «Financial Services» can only be used by companies registered as such with the Cyprus Securities and Exchange Commission. Similarly, the name «insurance» or «bank» can only be used by registered entities.

Names can be registered in any language using the Latin alphabet, provided that a translation of the name is provided with the application if it is a foreign language.

Name change

If a Cypriot company is being established, the name can be changed later by a special resolution of the company. In this case, a new name will need to be approved. A change of name will not affect the rights and obligations that the legal entity had before the change, nor will it invalidate any ongoing legal proceedings.

Status

In the case of a limited company, the company name must be followed by the words "limited" or "ltd". Similarly, Public Company Limited» or «PLC» must follow the names of public companies. The result of this is to indicate its status to persons doing business with the legal entity.

Applying for Cyprus Company Registration

Provided that your proposed name has been approved and you have made the appropriate decisions regarding the formation of your company, you can proceed with the business registration application electronically or manually/by post.

Cyprus Online Company Registration:

In the case of online registration, you will need to get a username and a password. They are created within 4 business days.

Regardless of the type of legal entity, the registration application can be made online via the electronic filing system, together with:

A legal declaration signed and sworn before the court by the entrusted lawyer (form HE1);
– The Memorandum and Articles of Association duly signed in the Greek language in accordance with the proposed company type. If a private or public limited company with shares chooses to adopt the regulations contained in Table A of Schedule I of the Companies Act as its Articles of Association, a relevant document referring to the title of the adopted regulations must be submitted;
A solemn declaration of the signature witness completed;
A certified translation of the Memorandum and Articles of Association into a language other than Greek. If you wish to create a translation file to obtain certified copies of the Memorandum and Articles of Association in a foreign language, a certified translation of the specified documents by a sworn declaration or a sworn translator of the Republic of Cyprus is also permitted;
The permission, consent, or pre-approval of the relevant government agency or relevant body if required for the use of certain words or phrases and/or in connection with the business activity, if the listed documents were not submitted with the name approval application.
An additional fee must be paid to expedite the business registration process.
When registering a public company, you will also need to submit form HE5 by paying an additional fee.

Registration of a company in Cyprus by hand/by post:

It is possible to register a legal entity manually or by post by submitting the following:

A legal declaration signed and sworn before the court by the entrusted lawyer (form HE1);
A notification of the business's registered office address (form HE2);
A notification regarding the information of the company's first directors and secretary (form HE3);
The memorandum and articles of association duly signed in the Greek language in accordance with the proposed legal entity type. If a private or public limited company with shares chooses to adopt the regulations contained in Table A of Schedule I of the Companies Act as its articles of association, a relevant document referring to the title of the adopted regulations must be submitted;
A certified translation of the Memorandum and Articles of Association into a language other than Greek. If you wish to create a translation file to obtain certified copies of the Memorandum and Articles of Association in a foreign language, a certified translation of the specified documents by a sworn declaration or a sworn translator of the Republic of Cyprus is also permitted;
The permission, consent, or pre-approval of the relevant government agency or relevant body if required for the use of certain words or phrases and/or in connection with the business activity, if the listed documents were not submitted with the name approval application;
A fee and an additional fee if an expedited procedure is required. Payments can be made in cash, by check, through an account opened at the Department of Registrar of Companies, or by bank transfer;
in the case of the establishment of a public company, form HE5 must also be submitted upon payment of an additional fee.

Opening a Corporate Bank Account in Cyprus

In order to be able to pay for services and accept money for services already rendered or work done, a business needs to have a bank account.

As it is part of the incorporation procedure, the opening of a corporate bank account remains mandatory during the registration of a Cypriot legal entity. In the initial stage, the corporate bank account is used to deposit the capital of the future business, and later it is used for commercial transactions. Foreigners and investors interested in starting a business in Cyprus can start the opening procedure before arriving in the country - they can open a Cyprus bank account online.

If a legal entity plans to open a corporate bank account in Cyprus, it will need to provide the following documents to complete the KYC procedure:

The company's Memorandum and Articles of Association;
The company's state registration certificate;
The certificate of the company's shareholders (if any);
a document confirming the positions of the director and secretary - Director and Secretary Certificates;
A document confirming the legal address of the company's registration
Registered Office Certificate;
Proof of a business address issued by the Group's Main Trading Offices;
Certificate of good standing for foreign companies if they have been open for more than 2 years;
an application bank form (each bank has its own sample);
Website.

To open a bank account in Cyprus for partnership purposes, the following documents must be submitted:

Partnership agreement;
Certificate of Incorporation;
A Certificate of the Partners;
Certificate of Good Standing for foreign partnerships if they have been registered for more than 2 years;
Proof of registered office;
An application, the form of which you can find at the bank;
Website.

For all signatories, directors, shareholders, and ultimate beneficial owners, the following are required:

Certified identity documents (passport, ID, etc.);
Proof of address (original utility or certified copy up to the last 3 months);
Information about the company's different business partners and the countries to and from which funds will be transferred
In some cases, banks may also request additional documents such as sales contracts, etc.

Banks request that the above documents and information be updated generally every two years, and in some cases, once a year.

Advantages of opening a bank account in Cyprus:

Fast Opening Process;
Documents Can Be Sent By Fax Or E-Mail;
No Minimum Initial Deposit Required;
Bank Commission Is Low;
Offers An Online Banking Solution.

Financial Reporting and Tax Obligations in Cyprus

Legal entities resident in Cyprus must annually submit:

A Tax Return;
Financial Statements Including A Report From An Independent Auditor;
An Annual Report Containing Information About Shareholders, Secretaries, And Directors;
A Financial Report Compiled In Greek.

The above Reports are submitted to the Cyprus Department, except for the Greek Report, which is submitted to the Registration Chamber.

Even when there is no company activity and no accrued taxes, the Cypriot legal entity must submit reports confirmed by an auditor.

Annual Income Tax Return in Cyprus

Legal entities resident in Cyprus are required to complete and submit an annual company's Income Tax Return (Form TD4) to the Inland Revenue Department.

The annual Tax Return for all Cypriot legal entities (including small companies) must be based on the Company's independent financial statements.

The Cyprus Tax Laws require that the TD4 be based on the Company's audited financial statements and submitted with a Compliance Confirmation from an Auditor.

The Cost of Company Registration in Cyprus

When registering a business, all payments can be divided into the following types:

Company Registration Fee in Cyprus

This fee is paid only once and is for creating the legal entity. Many companies in Cyprus pay €1600 for registration, and this amount varies depending on the service provider.

First, you must be sure that the service provider you are connecting with will meet your needs even after your business is established.

Second, check what is included in the price. Service providers charge very low fees but charge extra for basic company documents that you will need.

Annual Fees for Companies in Cyprus

This is a regular fee that you have to pay. The annual fees are for nominees, secretary, and registered office services.

Nominees are usually divided into shareholders and directors, and these are lawyers or accountants who keep their clients anonymous. To calculate the annual fee, the legal entity must have a registered office in Cyprus and appoint a secretary.

Accounting and Auditing Fees in Cyprus

These fees involved in the registration of a company in Cyprus depend on the number of transactions carried out each month or year and whether the legal entity employs an accountant from a large or small firm.

Your business in Cyprus must register with the Tax Department and register for a tax number. Your company needs to file audited accounts and pay tax every year. Depending on their setup, some companies may also get a VAT number and register with the VAT Department. Also, if they do, they need to file a VAT return every three months.

Accounting and auditing fees range from €1200 plus VAT annually and may increase depending on the needs in terms of economic activity.

Annual Fees to be Paid to the Registrar of Companies in Cyprus

Two types of fees are paid to the Registrar of Companies every year. The first is the Annual Return. The legal entity must file an annual return with the Registrar of Companies every year. They must submit a report on changes in the company during the year, such as changes in equity, shareholders, or directors. To do this, you will need a document seal, which costs €100.

After that, the fees will depend on the charges that the accountant or lawyer takes to prepare and file the report.

The second fee is a Special Government Levy that requires all businesses in Cyprus to pay a fee of €350 by June 30 each year.

For a group of companies, the total fee is limited to €20,000, and this fee must be shared equally among the companies. Late submissions will be subject to a 10% penalty for the first two months and a 30% penalty for late submissions within five months.

Companies that do not pay their annual dues for a certain period may be struck off the company register. If a legal entity wants to restore after being struck off the company register, it must pay €500 within two years from the date it was struck off. The restoration fee for two years is €750.

If the legal entity is in liquidation and the process has started before June 30, it no longer needs to pay the annual levy.

The actual overhead and levy fees for your Cyprus company can vary significantly but will generally include the costs described above. The total cost of the service will depend on your business's management model, personal tax circumstances, and the requirements of the owners.

Cyprus Company Registration Timeline

Completing company formation in Cyprus generally takes 10 to 15 business days: From the moment an application is made to the Registrar of Companies for the approval of the future business's name, until the company's official documents are issued (Certificates of Registration, Certificate of Directors and Secretary, Certificate of Shareholders, and Office Address, verification of the company's memorandum and articles of association), as well as applying to the Tax Department to obtain a Tax Identification Number and applying to open a bank account, it takes 10 to 15 business days.

Legal requirements for setting up your company in Cyprus:

Name approval
Permission to use the name is granted by the Registrar of Companies of Cyprus. If a name is too similar to existing ones, or is found to be misleading or too general, the Registrar may refuse to grant permission.
Capital
The standard authorized capital is €1,000. There is no minimum paid-up capital requirement. The share class may include registered shares, preferred shares, redeemable shares, and shares with or without voting rights.
Shareholders
The minimum number of shareholders can be one, and they can be both natural persons (residents/non-residents of Cyprus) and legal entities. Trusts can also be a shareholder of a Cyprus legal entity.
Registered office
Every legal entity registered in Cyprus must have a Cyprus registered office (a local registered address) where the company's official documents will be kept.
Secretary
Cyprus companies are required to appoint a secretary.
Directors
The legal entity must have at least one director, and they can be corporate or natural persons (individuals). Although there is no requirement for the director(s) to be local, we recommend that the majority reside in Cyprus for the company to be considered a tax resident in Cyprus.
Annual general meeting
All Cyprus companies are required to hold a shareholders' meeting. The ordinary general meeting must be held within eighteen months from the date of incorporation of the company. After the expiration of the above period, the legal entity must hold its annual general meeting of shareholders every year and no later than fifteen months from the previous one.
Accounting and audit
Cyprus companies are required to file accounts. In accordance with International Accounting and Auditing Standards, Cyprus businesses must also be audited annually by an audit firm.

Challenges of setting up a business in Cyprus

The challenges of setting up a business in Cyprus include the following points:

all shareholder and director information of a Cyprus legal entity is publicly available on the website of the Cyprus Registrar of Companies Department, which may not be suitable for foreign investors seeking anonymity;
setting up a legal entity with large capital in Cyprus can be costly, as the state fees for such an entity depend on the amount of registered capital allocated to the new company;
since Cyprus is an EU member, information about the founders and shareholders of companies registered in Cyprus is publicly available;
foreign investors who want to set up their own business in Cyprus must either commission a service provider or the law firm must be resident in Cyprus;
foreign and local companies wishing to open a corporate bank account in Cyprus must be introduced to the said bank by a locally registered trustee, who must complete a comprehensive due diligence process with the client;
for a Company to be able to benefit from the tax advantages of various Cyprus tax treaties and the 12.5% corporate tax rate, the legal entity must appoint at least one director who must be resident in Cyprus;
to open a corporate bank account for a foreign or local business in Cyprus, you will need the help of a local trustee who will help you pass the verification procedure with the bank;
resident tax companies are required to submit all financial accounts and tax returns annually to the Cyprus Inland Revenue Department by March 31 following the fiscal year;
regulations and procedures for government projects are conducted only in Greek. International business owners should be careful to avoid possible conflicts and misunderstandings.

Cyprus is one of the most suitable European environments for setting up a company or business, which is why it is called the gateway to the common European market due to its favorable tax policy, economy, and other foreign investment laws. If you plan to start your own business from scratch or as an extension of an existing business, it is advisable to set up a company in Cyprus. You will find the procedures simple and fast, and the benefits are more than in most European countries.

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