Understanding Cyprus incorporation process and the registrar of companies

If you are looking for a thriving business environment, Cyprus has a lot to offer for those looking to start a company in Cyprus. With a strategic location at the crossroads of Europe, Asia, and Africa, Cyprus offers a dynamic business ecosystem supported by a strong legal system, a robust infrastructure, and an efficient tax regime.

The aim of this article is to describe the business opportunities in Cyprus and the sectors primed for growth. It outlines the benefits of establishing or relocating a company to Cyprus, explains the incorporation process through the registrar of companies, and how we can help you with setting up your company.

Advantages of doing business in Cyprus

• European Union and Organisation for Economic Co-operation and Development (OECD) compliance: Cyprus is a fully compliant EU jurisdiction, adhering to OECD guidelines and Base Erosion and Profit Shifting (BEPS) (initiatives, ensuring a transparent and reputable business environment
• Efficient legal and regulatory framework: The Cyprus legal system is based on English common law, offering stability and security for businesses
• Strategic location: Its geographical position makes Cyprus an ideal hub for companies looking to expand into Europe, the Middle East, and North Africa
• Advanced banking and financial services: Cyprus offers a well-regulated banking sector with a range of financial services tailored to businesses and investors
• Notional Interest Deduction (NID): Even though Cyprus has a flat corporate tax rate of 12.5%, the new NID regime which was introduced in 2015 and applies to new share capital or equity introduced into a Cyprus company, may reduce taxable income by up to 80%
• Favourable Intellectual Property (IP) box regime: Qualifying income from IP can benefit from an effective tax rate as low as 2.5%, making Cyprus an efficient jurisdiction for technology and innovation-driven companies.
• Efficient group reorganisations: Companies undergoing mergers, demergers, divisions, or share exchanges can transfer assets and liabilities without tax implications in Cyprus.
• Exemption of profit from the sale of shares and securities for corporation tax purposes
• No capital gains tax except on the disposal of immovable property located in Cyprus or shares representing such property
• No application of withholding tax on dividends and interest payments to non-Cyprus tax residents
• Robust infrastructure: Cyprus boasts modern telecommunications, transportation networks, and business-friendly digital services
• Highly skilled workforce: Cyprus has a well-educated, multilingual workforce with expertise in finance, law, and technology
• Extensive network of double tax treaties: The country has signed more than 60 double tax treaties, facilitated international business and reduced withholding tax obligations

Company formation steps with the registrar of companies in Cyprus

Cyprus company formation is a straightforward and efficient process, typically taking around seven to ten business days. The registrar of companies in Cyprus facilitates company incorporation efficiently, minimising administrative complexity and ensuring a seamless setup process.

1. Selecting a company type: The first step in the incorporation process is choosing the appropriate legal structure for the company, such as a private limited company, public limited company, or another suitable entity type
2. Name approval application: Once the company type is determined, an application must be submitted to the registrar of companies for approval of the intended business name
3. Preparation and submission of incorporation documents: Upon name approval, the company must prepare and file the necessary incorporation documents, including the Memorandum and Articles of Association, along with details of directors, shareholders and the registered office address.
4. Obtaining a Tax Identification Number (TIN): After successful registration, the company must apply to the Tax Department for a TIN.

Cyprus business opportunities by sector

Cyprus offers a dynamic, rapidly evolving business landscape, making it an ideal destination for entrepreneurs, multinational corporations, and investors seeking growth. Its strategic location, efficient tax regime, and modern infrastructure provide a robust foundation for across various industries. Below are some of the most promising business opportunities and growth sectors in Cyprus:

Ongoing compliance requirements

To remain in good standing, Cyprus companies must adhere to the following ongoing compliance requirements:

• Annual filings: Companies must file an annual return HE32 with the registrar of companies, including updated company details
• Financial statements: Cyprus companies must maintain proper books of account and submit audited financial statements annually
• Tax filings: Corporate tax returns must be submitted to the Cyprus tax department
• Value Added Tax (VAT) reporting: If applicable, VAT returns must be filed quarterly
• Economic substance requirements: Certain companies, particularly holding and IP companies, must demonstrate real economic presence in Cyprus to comply with international tax regulations

Services offered by Harneys Fiduciary

• Companyincorporation services: we take care of all the necessary steps required for the incorporation of your Company and the preparation and submission of all the requested forms, allowing only a minimal input from the shareholder’s side
• Registered office services: this address is different to the business address of the company where the business activities are carried out from. The registered office address is provided to receive all official communication from the government and other entities.
• Director services: Our professional directors have significant experience covering, accounting, auditing, fiduciary services, regulations, and risk management. We exercise independent judgment and act in the best interests of the company. We also oversee and supervise the activities and affairs of the company to ensure compliance with the applicable laws and regulations
• Board support services: The team can assist by providing the board packs and agendas ahead of the meeting, accommodate on-site meetings along with video conferencing capabilities. They can also prepare the draft minutes of the meeting to circulate among attendees
• Secretarial services: The annual corporate secretarial fees, as mentioned above, include the following services:
• Monitoring the annual obligations of each company i.e. notification of completion of the financial statements and calling the annual general meeting of each year
• Keeping the updated records and books of the company at the registered office
• Corresponding with members and directors as necessary
• Trust formationservices: We offer all necessary services needed for the formation of a Cyprus international trust, a necessary vehicle for your private wealth and estate planning
• Trustee services: Our trustee services provide comprehensive, professional support for establishing and managing Cyprus international trusts. With extensive expertise and a client-centric approach, we ensure seamless compliance with legal requirements while safeguarding your assets and meeting your unique goals. Whether for wealth management, estate planning, or philanthropic endeavours, we are committed to delivering secure and efficient solutions tailored to your needs
• Accounting services: We create customised accounting solutions tailored to your company’s or group’s specific requirements. Serving as an expert and adviser in matters of accounting, International Financial Reporting Standards (IFRS) reporting and through our international network, our skilled and experienced staff assist businesses, not-for-profit organisations, and individuals to effectively manage their domestic and international accounting
• Bank Account opening and administration: assistance with the opening of your company’s bank account and ongoing maintenance and administration
• Ancillary services: We help with any additional services needed for your company, such as registration with the VAT or tax departments
• Ad Hoc services: We utilise our extensive network to provide the services you require to effectively manage your Cyprus entity, including advisory and compliance services

Contact Theodoros Assiotis, Andreas Liassides or Marisa Efstathiou to discover how we can assist you in establishing your Cyprus-based business.