How to start a business in Cyprus - company formation & opening a business bank account

Although Cyprus is no longer the offshore tax haven that it used to be before the EU came calling, it remains a dream destination for many foreign investors. An efficient and sophisticated business environment, coupled with low corporate income tax, help to explain the attraction. Cyprus is the perfect destination for startup businesses.

What are the other factors that make Cyprus so attractive?

The island has double-taxation treaties with 27 other countries, including most of the high-tax countries in Western Europe, and many states in Central and Eastern Europe. As a low-tax centre, this makes Cyprus a particularly effective location for companies aimed at emerging markets.

Requirements for company incorporation in Cyprus

  • Share capital requirement is €5,000 of which none has to be paid up
  • Number of shareholders must be between one and fifty.
  • Company must have one director.
  • Annual accounts must be filed.

What are the main types of company in Cyprus?

Most investors choose one of the following corporate formats:

  • limited company
  • branch
  • partnership

What are the main features of a branch?

  • The foreign parent company is responsible for all liabilities of the Cypriot branch
  • A branch is required to register with the Registrar of Companies
  • The accounts are to be filed annually in Greek

What are the main features of a limited liability partnership?

  • A general partnership has between two and twenty members
  • A limited partnership has at least one partner with unlimited liability
  • It is required to register with the Registrar of Companies
  • There is no requirement for audited accounts but proper book-keeping must be maintained

What about offshore companies?

Any private company based in Cyprus that is 100% foreign-owned is regarded as an offshore company, although the term International Business Company (IBC) is also used. But there is no longer any difference in tax treatment between an offshore company and a regular Cypriot company.

What is the regulatory environment like?

Before 2003, the regulations were more relaxed. The Government applied the lightest of tax touches, and offshore companies paid no corporation tax at all.  But today - certainly as far as offshore companies are concerned – the environment has become significantly stricter. The island still remains a business-friendly low-tax centre but regulatory requirements are now on a par with many other EU states. Our legal and tax experts can help keep your business in line with all the tax rules and regulations.

Are there financial incentives available?

Cyprus does not offer particularly generous incentives for foreign investors, although the government may argue that its low-tax regime is a sufficient incentive in itself. However, various grants and loans are available for investors in certain high-tech and traditional economic sectors, and the Larnaca free trade zone offers exemption from customs charges. Moreover, there are personal tax concessions for expatriate workers.

How easy is it to recruit staff in Cyprus?

The labour pool is generally well educated and rates of pay are low compared to the EU average. If you want the pick of the crop, our recruitment specialists are ready to assist you.

What about banking facilities?

Cyprus is an important regional investment centre and has developed sophisticated international banking facilities to support it. Many major international banks have branches here, together with local commercial banks. For assistance in opening a bank account in Cyprus, please contact us and we can lead you through the process with our banking contacts.

For further information on company formation in Cyprus, including tax assistance and opening up a business bank account, please give us a call on 0033 (0)1 53 57 49 10 or email us from our contact page where we’ll be happy to discuss all your company incorporation requirements.

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