Cyprus Company - Basic Guide
The Cyprus Company can provide a tax-efficient way to initiate international business. A Cyprus Company is taxed as described below and if correctly structured, can be designed to take advantage of the extensive tax treaty network signed by Cyprus.
Taxation - All companies that are tax residents in Cyprus are taxed at a rate of 12.5% on their income accrued or derived from all sources in Cyprus and abroad. A non-Cyprus tax resident company is taxed on income accrued or derived from a business activity which is carried out through a permanent establishment in Cyprus and on certain income arising from sources in Cyprus. Corporation tax is imposed on business profits, interest, discounts, rents, royalties, remunerations or other profits from property and net consideration in respect of trade goodwill (exemptions and deductions apply). Dividends to non-tax residents are tax exempted.
Shareholders - A minimum of 1 shareholder is required (no restriction on the nationality or residency). Shareholders may be corporate or individual. Details of the shareholders appear on public file, however licensed trust companies are permitted to hold shares on a fiduciary basis.The liability of the shareholders of a Cyprus Limited Liability Company is limited up to the unpaid amount of the shares they hold. There is no minimum capital requirements for a Cyprus Private Limited Liability Company.
Directors - A minimum of one Director is required, either corporate or individual, and details appear on the public file in Cyprus. There is no restriction on the nationality or residency of the directors. Please note that for tax residency purposes it is advisable for the majority of the board of directors to consist of Cyprus tax residents.
Annual Reporting - Companies must file an annual return, maintaining accounting records and must also prepare audited accounts.
Timeframe - Normally it will take approximately 1 week to incorporate a Cyprus Company after compliance procedures have been satisfied.
Restriction on Name and Activity - Names must end with the word “Limited”. There are few restrictions on the words which may be included within a company name but those indicating a connection with the banking or insurance industries can only be used when an appropriate license has been obtained.
Local Requirements - As a matter of Cyprus company law every Cyprus Company MUST maintain a registered office address in Cyprus and must also appoint a company secretary. If a licensed service provider is handling all the corporate work, it becomes legally liable for actions of the Cyprus company, so will naturally insist on being involved fairly closely in all business operations.
International Business Activities of a Cyprus Company
Holding companies (receiving dividends from foreign subsidiaries)
Financial Services (investment banking, brokerage, asset management, etc)
Investment Funds registration
International trading (as an intermediary to re-invoice exports and imports)
International services companies (re-invoice services through an international company)
International construction and engineering companies
International transport/ distribution companies
Real estate companies
Shipping and ship management companies