Cyprus is a popular destination to register a company for several reasons. Not only is it strategically located between Europe, Asia, and Africa, with many opportunities in areas like tourism, shipping, energy, and real estate. It also offers a business-friendly environment with one of the lowest corporate tax rates in Europe, not to mention the high living standard, beautiful location, and Mediterranean climate.
Registering a business in Cyprus is also relatively straightforward. However, you should do your due diligence to ensure the process goes smoothly and that nothing is holding your business back once it’s set up.
With that in mind, this article will guide you through the process f company formation in Cyprus.
Choose the best way to set up your business
The traditional route involves physically visiting the Department of Registrar of Companies and the Official Receiver to submit the necessary documentation and complete the registration process. It may take several days to complete, and the applicant must be physically present.
On the other hand, online business registration in Cyprus allows applicants to complete the entire registration process online through the Cyprus Registrar of Companies website. This process is generally faster and more convenient, as applicants can complete registration anywhere at any time
Both traditional and online business registration processes in Cyprus require the same basic documentation, such as proof of identity, business name and address, and other relevant information about the company.
While online incorporation is generally faster and more convenient, there may be some technical hurdles or issues with complex legal matters requiring face-to-face interaction.
You can get the best of both worlds by working with an outsourced providers through online incorporation platforms, that offer full range of services to help you register and administrate business in Cyprus.
Trust YouReg With Your Company Formation in Cyprus
YouReg is an example of such a platform, that assists with registration and administration of companies in Cyprus, Hong Kong, and the UAE. We act as a middleman between our clients and corporate administrators to facilitate a fast and easy process. We also offer a range of other services to help support businesses in their new ventures.
How to choose a corporate provider
Choosing the right corporate provider is an important decision that will affect the process of registering a business in Cyprus. A good provider can ensure the registration process is completed smoothly and efficiently, while a bad provider can lead to unnecessary delays and complications.
Here is what you should look for in a corporate provider:
- Choose a provider with a good reputation in the industry, positive reviews, and a solid track record.
- Look for someone with experience registering companies in Cyprus so they are better able to navigate the system and provide relevant advice.
- Choose a provider with comprehensive services, such as ongoing support and legal, accounting, and tax advice.
- The cheapest is not always the best. However, look for a service that’s within your budget and offers favorable payment terms.
Look for a provider with a professional approach that uses clear policies and procedures that offer transparency when dealing with clients.
Prepare to Register a Business
Before you start the process, you should prepare some things to ensure the process goes smoothly:
- Business plan: Prepare a business proposal outlining your objectives, target market, products or services, marketing strategy, and financial projections.
- Company name: Check that the name is not already in use and that it reflects your business and brand.
- Legal structure: In Cyprus, common legal structures for businesses include a limited liability company (LLC), partnership, sole trader, and branch of a foreign company.
- Required documentation: Gather all the necessary documentation, including proof of identity, company name, address, and shareholders’ details. Additionally, you may need to provide financial statements and tax-related documents.
- Professional advice: Seek professional advice from a corporate provider or lawyer to guide you through the process.
- Funding: Consider your costs, ongoing expenses, and potential sources of financing, such as bank loans, grants, or crowdfunding.
Learn About Tax Rates in the Jurisdiction
After registering your business, you must register for taxes. Familiarize yourself with the tax requirements and deadlines to avoid penalties and fines.
Typically, foreign businesses are taxed at the same rate as domestic ones in Cyprus. With one of the lowest corporate tax rates in the EU (12.5%), this is one of the main advantages of registering a business in Cyprus.
Foreign businesses may also be subject to the following taxes:
- Value-added tax (VAT)
- Payroll taxes
- Withholding taxes
The incorporation stage is the formal process of registering the company and obtaining the necessary legal documents to establish the business.
Here is a simple list of the typical documents required during this stage:
- A company name reservation application.
- Memorandum and Articles of Association
- Statement of initial beneficial owners.
- Directors’ and shareholders’ details
- Proof of identity and address for each director and shareholder.
This checklist may be different for some companies, but it is the minimum requirement for most applicants. Similarly, the process may vary but will largely follow these steps:
- Company name approval from Registrar of Companies,
- Submit the required documents (Memorandum and Articles of Association, total share capital, and the statement of initial beneficial owners).
- Pay the relevant fees for company registration and any additional services the Registrar of Companies provides.
- Wait for verification and approval by the Registrar of Companies.
- Complete tax registration with the Tax Department.
Post incorporation stage
According to the Cyprus Companies Law, every company registered in Cyprus must have a company secretary. The company secretary must be a natural person and can be a resident or non-resident of Cyprus. If the company only has one director, they cannot act as the secretary.
If your company still needs a secretary, it must appoint one within 14 days of the incorporation. To do this, you need the companies’ tax details and to register the secretary through the government’s Ariadni portal.
An easier option is to appoint your corporate provider as the company secretary. If you are going to set up with YouReg, don’t forget to talk to the manager also about that.
Instead of concluding, let’s go through the checklist again:
- Choose the best method to set up your business
- Choose a corporate services provider
- Prepare to register your business by choosing a company name, drafting a business plan, structuring your business, securing funding, and preparing your documents.
- Study the tax rates in Cyprus that would apply to your business
- Get company name approval from the Registrar of Companies
- Submit the required documents (Memorandum and Articles of Association, total share capital, and the statement of initial beneficial owners)
- Pay the relevant fees for company registration and any additional services the Registrar of Companies provides
- Wait for verification and approval by the Registrar of Companies
- Complete tax registration with the Tax Department
- Appoint a secretary within 14 days of your incorporation