Company formation in Cyprus

[WoodyCampbell]

Cyprus is regarded as an ideal place for incorporating a company for many reasons. Geographical location is one; this magnificent island is conveniently situated at the crossroads of Europe, Africa and Asia. Furthermore, its proximity to the richest Middle Eastern countries gives Cyprus a serious advantage, and contributes to an accommodating environment for establishing a company. Widespread use of the English language in all spheres of life attracts business people from all around the world. Approximately 80% of the population are fluent English speakers.

In terms of legislation, Cyprus' investment policy changed significantly in 2000, when the minimum level of foreign investment in Cypriot companies was abolished for EU citizens (in 2004 this restriction was also lifted for non-EU citizens). It is worth noting that the government of Cyprus allows 100% foreign participation in local companies for third-country investors. As far as taxes are concerned, Cyprus is an appealing jurisdiction in which to do business: at 12.5%, its corporate income tax is one of the lowest in Europe. Furthermore, in order to avoid double taxation, Cyprus has signed double tax agreements with more than 40 countries. Cyprus is an attractive offshore zone because of the very friendly relations between investors and tax authorities. All of these factors create an inviting business environment on the island.

Company formation is a very popular service in Cyprus, not least because of the simplicity of its bureaucratic procedures and the ease of opening a bank account. Statistics show that in 2016, more than 200,000 new companies were registered in the country. As a location for a holding company, Cyprus also has many advantages — but first it is necessary to understand what holding companies are and the purposes for which they can be used. In brief, a holding company is a company than owns enough of another company's stock to be able to control its management and policies. Holding companies are used by the owners of real estate, trade marks and other assets. Setting up a holding company is quick and simple; your presence is not necessary and the procedure can be completed over email or by post. A holding company also allows for nominees. The VAT applicable to Cyprus-based holding companies is only 19%, and there is 0% tax on inbound and outbound dividends.

A Cyprus-resident holding company can distribute profits to non-resident shareholders completely tax free, while corporate tax on income deriving from intellectual property rights is only 2%. Welcome to paradise!

Incorporating a company in Cyprus usually takes approximately 15-20 days. First, you must get your company name approved by the Registrar of Companies, who will make sure that it is not already in use; this takes 3-5 business days. Then, you can register your company. The entire registration process takes approximately 5-8 business days. The following documents will be required: a copy of your passport, confirmation of personal details, photographs, a document that indicates the place of residence of each shareholder and a certificate confirming the location of the company's registered office. The directors will need to submit certain information concerning their professions. Remember that, according to Cypriot law, at least one director and one company secretary should be appointed.

It is possible to open a bank account in Cyprus whether you are a resident or not, and it can be done through an overseas branch of a Cypriot bank. In order to proceed, you must submit original or apostilled copies of the following documents: passport, proof of residential address (a utility bill, for example) and a bank reference letter. The main advantage is that opening a bank account is fast and fuss free. The cost of opening an account is very low if we compare Cyprus with other EU states. Plus, any person or legal entity can open a bank account in Cyprus. As a result, you will have a valid worldwide Visa card, internet banking, security, anonymity and many other benefits. In addition, there are no minimum deposit terms and bank fees for money transfers are low. Interest in registering companies in Cyprus continues to grow. More and more foreign businesses and investors are discovering the benefits of this beautiful country's business environment. Do not miss your opportunity.