Company Formation in Cyprus


  • Added By :Maria Appiou
  • Category : Business Law
  • Article Id : 167
  • Added On : 06/10/2015
  • Views : 690

Cyprus Company Registration - Update 2015

Why should I choose Cyprus to establish my company?

  • Cyprus is a low tax country, without being blacklisted or considered a tax heaven country;
  • Cyprus, as a member of the European Union, enjoys a high degree of respect;
  • The corporate income tax on net profits after deducting business expenses amounts to 12,5%;
  • Capital allowances available;
  • Foreign employees working outside Cyprus do not pay income tax while at the same time receiving their salary through Cyprus;
  • No contributions to local security schemes are payable in respect of foreign employees;
  • Cyprus possess a wide network of double tax treaties;
  • No exchange control regulations;
  • Residence and work permits can easily be obtained for expatriate personnel and their dependants;
  • No withholding tax on dividends, royalties or interest paid to non residents;
  • Excellent banking services;
  • Common Law system;
  • Easy accessibility by air or sea;
  • Strategic location;
  • Low professional costs;
  • Low costs for the set-up and the administration of companies;
  • Complete anonymity of shareholders;
  • Nominee services available;
  • English and Russian languages widely used;
  • Highly qualified professionals.

What about taxation?
 
Currently, the corporate income tax rate for Cyprus tax resident companies is 12,5%.

What conditions should be fulfilled so that a company can be considered tax resident in Cyprus? Since 1st January 2003 a Cyprus incorporated company is considered as being Cyprus tax resident if the management and control of the company is carried out in/from Cyprus. This means that all important decisions relating to the operation of the company are taken in or from Cyprus, the majority of the Board of Directors are Cyprus residents and all meetings of the board of Directors take place in Cyprus.

Is audit mandatory?

Yes, all Cyprus companies need to be audited annually and to submit financial and tax statements to the Inland Revenue and the Registrar of Cyprus Companies.

The audit must be carried out by a Cypriot firm of auditors in accordance with the International Accounting and Auditing Standards.

What about work and residence permits?

Expatriate personnel of companies and their dependants can obtain a temporary work and residence permit in Cyprus relatively easy.

The permit is renewable every five years provided that the terms are not violated in any way by the permit holder or by the company he/she works for.

Are there any exchange control restrictions?

Companies in Cyprus are not subject to any exchange control restrictions.  Thus the companies are not restricted with regards to their bank accounts which may be held in any country and currency.  Should the company wish to have a bank account in Cyprus. This may be operated freely with no necessity for prior approval.

What should I know about Company Names?

The Registrar of Companies must approve the name of the company before the whole registration procedure commences.  Any names that are similar to existing company names are not approved.  Also, names with a ‘general meaning’ and names including words such as "Royal", "King", ‘Queen’, "Commonwealth" are not accepted.

The time needed for the approval of the company’s name is usually 15 to 20 days unless an "accelerate" application is made where an approval is given within 5 days.  Cyprus companies are compulsory to end with the word ‘Limited’ or ‘LTD’.

For a list of already approved names by the Registrar of Companies, please get in touch.