Cyprus Company Registration FAQ

The Cyprus company registration itself begins with the appointment of a licensed Administrative Service Provider firm (ASP) or a Law Firm to register/incorporate a Cyprus company. The service provider will request the necessary KYC documents from the shareholders and 3 company name suggestions. Once the proposed name of the Cyprus company has been approved by the Cyprus Registrar of Companies, the Memorandum and Articles of Association will be drafted and submitted along with the necessary company registration forms to the Registrar of Companies.

For Cyprus company registration, the following KYC documents are required by law for each shareholder and, if different, each ultimate beneficial owner:

• Apostilled copy of an international passport or ID.
• Original or certified copy of a recent (not older than 3 months) proof of address, bearing the full residential address (including postal code) and the full name of the person as stated in the passport.

The following types of documents are accepted as proof of address: 

Utility bills (electricity, gas, water, fixed phone bills or municipality service bills) or

Confirmations of Residence issued by Office for Registration of Residents.

• Original bank reference letter dated within the last 3 months in English language, bearing the same address as in the passport or ID of the relevant persons.
• CV showing the professional career, in English sent by email.
• Proof of tax identification code of the ultimate beneficial owner(s), sent by email.

In case the shareholder is a legal entity, the following additionally documents are required by law for Cyprus company registration:

• Our Corporate person form, filled and signed by the beneficial owner(s).
• Certified and apostilled recent core documents evidencing the company’s existence and incorporation number.
• Certified and apostilled recent core documents evidencing the company’s directors, company secretary (if any), shareholding and registered office (registry extract, trade register etc.)
• Certified and apostilled copy of the Memorandum and articles of incorporation.
• Apostilled copy of a passport and original or certified copy of a recent, not older than 3 months utility bill of the shareholders, directors, company secretary (if any), nominees and other individuals involved.

KCY is the abbreviation of ‘know your customer’. It is the process of verifying the identity of a natural or legal person and accessing potential risks of illegal intentions for the business relationship prior to Cyprus company registration procedures. As per the EU legislation all service providers, law firms, banks are obliged to perform a KYC check before entering into a business relationship with a person. Therefore, we request the above-mentioned documents for all Cyprus company registration and bank account opening procedures.

No, for Cyprus company registration/incorporation the shareholders normally do not need to come to Cyprus.

By law, all Cyprus companies must appoint a company secretary, which can be both legal or natural person, announced to the Registrar of Companies during Cyprus company registration. The secretary is responsible for communicating company related decisions to the Registrar of Companies and to other competent Authorities or persons; to maintain and update company registers, to keep the company’s seal, to invite for annual general meetings, to prepare and file annual returns and other financial documents, and to prepare documents required by the law.

A Cyprus company must have a registered office in Cyprus.

All Cyprus companies must pay the annual levy of 350,00 EUR to the Registrar of Companies of Cyprus and Professional Permit Fee of EUR 177,00 to the Municipality (fee is subject to changes).

All companies must submit their audited annual financial statements to the Cyprus Tax Authorities and to the Registrar of Companies.

VAT returns of a Cyprus company have to be submitted quarterly, if applicable.

Provisional profit and corporate tax assessment returns have to be submitted till July 31 as an estimation for the current year. The provisional corporate tax expected for the current year has to be paid in 2 equal instalments till July 31 and December 31. The tax payer has the right and possibility to correct the estimated profit/tax with the second instalment. The second instalment will be calculated accordingly.

If a Cyprus company conducts business within Cyprus and/or with other EU countries, monthly VIES and INFRASTAT registrations may be necessary and respective returns have to be submitted monthly.

We do recommend furnishing the company with a capital that supports the business activities planned, avoiding later possible scrutinising by tax authorities or banks. This might be done during the process of Cyprus company registration/incorporation, or later in form of a capital increase.

Bookkeeping and audit of a Cyprus company

All Cyprus companies must keep accounts and maintain a proper bookkeeping as per the IFRS rules. The accounts must be accessible for the tax authorities at any time, therefore the accounts must be kept in Cyprus.

All Cyprus companies are obliged to prepare annual financial statements and have them audited by a licensed auditor in Cyprus every year. The audited financial statements must be submitted to the tax authorities and to the Registrar of Companies on a yearly basis.

Cyprus tax residency

As per the laws of Cyprus, a Cyprus company is considered as a tax resident of Cyprus if it is managed and controlled from Cyprus. Cyprus tax resident companies are liable to pay corporation tax on its worldwide taxable income at the rate of 12.5%.

Cyprus focuses on the place of effective management when determining the tax residency of a company. The place of management is generally defined by the place of residence of the majority of the company’s directors. Other countries are evaluating the tax residency based on where the company actually conducts its business effectively. Therefore, place of tax residency and the place of taxability might be different, based on the legislation of the shareholders and/or beneficial owners’ country of residence and aspects of BEPS rules.

Tax advantages of Cyprus

Cyprus offers a business-friendly tax system:

• The corporate tax rate in Cyprus is 12,5%.
• Very low tonnage tax for ship-owning and ship management companies.
• 2,5% tax on income from Intellectual Property (conditions apply).
• No tax on disposal or trading of securities.
• No tax on income from dividends on company level (for a period of four years).
• No tax on dividends paid to shareholders outside of Cyprus.
• No tax on dividend income for non-domiciled but Cyprus tax-resident individuals.
• No tax on interest income for non-residents with banks in Cyprus.
• No tax for International Trusts.
• Full tax group relief, profits of one group company are offset against losses of another group company.

For the Cyprus bank account opening, apart from the documents mentioned under Cyprus company registration/incorporation above, we require our Cyprus bank account opening questionnaire signed and TIC proof of the Beneficial owners.

No, nobody can guarantee the opening of a bank account in Cyprus or elsewhere, as the decision to open or to reject the opening of a bank account is in the absolute and sole discretion of the bank. Banks do have their specific policy and criteria that apply.

No, but a Skype interview might be requested by the bank. Some banks do require personal presence of the account signatories and/or beneficial owners, though.

Apart from Cyprus we offer our assistance in bank account opening in Malta, Liechtenstein, Montenegro, Hong Kong, Singapore, depending on each specific case.

The general VAT rate in Cyprus is 19%, while the reduced VAT rate is 5%.

Non-domiciled tax status

Any individuals who decide to move their tax residency to Cyprus or have been tax resident of Cyprus for less than 17 of the last 20 years are considered as non-domiciled in Cyprus for a maximum of 17 years.

Non-domicile Cyprus tax residents will be exempt from Special Defence Contribution tax for a maximum of 17 years, which is the capital gain tax on dividend income, interest income and rental income.

• Dividends are exempt from taxation.
• Interest income is exempt from taxation.
• Rental income from property in Cyprus or from abroad is exempt from special defence tax; rental income will only be subject to Income Tax at the normal rates (following a 20% allowance).