Cyprus, officially known as the Republic of Cyprus, is a country centered in an island which is situated in the Eastern Mediterranean. It is the third largest and also the third populous island in the Mediterranean. The nation has an advanced and high-income economy along with a very high human development index. It is one of the most rapidly developing countries in the European Union with the fastest growing GDP of 1.6%.
Business Entities in Cyprus
For setting up a company in Cyprus, one should know the types of business entities the country offers. The different structure options available in Cyprus are:
1. Sole Proprietorship
A sole proprietor in Cyprus has virtually the same rights and obligations as a general partner in the limited partnership. This type of business entity falls under the Cypriot Partnership and the Business Names Law. Sole proprietors must be resident in Cyprus for tax purposes, which in essence mean they must be physically present in the country for at least 183 days a year.
A general partnership must be registered with the Registrar of Partnership within one month of formation, giving name, purpose, place of business; full particulars of the partners etc. a non-resident can also be a partner in a general partnership. They do not have to file accounts for auditing.
This type of business entity is similar to a general partnership, except, that they may have one or more general partners with unlimited liability, and one or more limited partners, whose liability is limited to the amount declared in the partnership return filed with the Registrar.
3. Limited Liability Company
Limited Liability Company by Guarantee
Here, each member who contributes capital can set their own limit to which they will be personally liable, subject to agreement.
Limited Liability Company by Shares
A public LLC by shares has a separate legal personality from its shareholders and may obtain a listing on the Cyprus Stock Exchange
A private LLC by shares has restrictions on right to transfer its shares. The limit of members in company is 50 and they are prohibited to any public subscriptions to shares or debentures
4. Branch of an Overseas Company
An overseas company can establish its branch office in Cyprus. Companies with branches in Cyprus must file their accounts annually, together with certified Greek translations
5. Offshore Company
An offshore company is the one established outside the country the owner lives and pays taxes in. it can be established in one or more countries and the main grounds for setting up an offshore company in Cyprus are the protection of assets and tax reduction.
6. Shelf Company
A shelf company in Cyprus is the one which is readily available and which has no assets or liabilities and has never conducted business as it is registered with the sole purpose of being sold.
Small Business Opportunities in Cyprus in 2019
The major industries which are fostering the growth of Cyprus economy are:
- Tourism Industry
- Service Industry
- Clearing and Forwarding Sector
- Shipping Industry
- Property Rental Market
- Construction Firms
Procedure for Cyprus Company Incorporation
Here’s how you can register your business in Cyprus.
Get the approval of company name from the Cyprus Company Registrar. An application for the name approval is examined within one week under the normal procedure or 2-3 business days under the accelerated procedure.
2.Submit the Documents
After securing the name approval, the relevant documents for the registration of an entity must be submitted according to the legal form of the entity. It includes Memorandum and Articles of Association. It must be submitted to the Department of Registrar and Official Receiver along with a sworn statement from the lawyer and details of the registered office, all the directors and secretary, making the relevant fee payment.
3.Get the Certificate of Incorporation
Once all the documents are submitted and approved by the authorities, the next thing that you need to do is get the certificate of registration which is an important document for further process
4.Obtain the Value Added Tax number
Obtain the VAT number by registering the company with the Tax Department. The tax system in Cyprus says that, VAT registration is only compulsory for the companies that perform activities that are subject to the Value Added Tax, such as trading.
5.Obtain the Social Contribution Registration
Obtain the social contribution registration at the Ministry of Labor, Welfare and Social Insurance if you decide to hire employees. A new company in Cyprus must hire employees. Recruitment is not a difficult process if you collaborate with job websites and recruitment agencies, especially since the workforce in Cyprus is so well-trained
Documents Required for Company Incorporation in Cyprus
- Proposed name of the company
- Description of the activities performed by the company
- Personal details of shareholder(s) or beneficial owner(s) in case of a nominee
- Personal details of director(s)
- Personal details of company secretary
- A reference letter from a bank
- A current valid (signed) full passport
- Proof of residence by providing a utility bill or bank statement
Why Forming an Offshore Company in Cyprus Is Advisable?
The perks of establishing an offshore company in Cyprus are:
- Stable economy and political background
- Reliable infrastructure
- Efficient banking sector
- Well-connected communication system
- Favorable tax system
- No tax on disposal of security
- Substantial list of double tax treaties
- Reputable jurisdiction
- No withholding on taxes on payment of dividends, interest, and royalties outside Cyprus
Why Invest in Cyprus?
There are many advantages to setting up a company in Cyprus. Some of them are stated below:
- Company formation in Cyprus permits entrepreneurs to legitimately do business in Cyprus as well as outside Cyprus.
- Cyprus has the lowest tax rate in the European Union.
- Cyprus has been ranked as the world’s 20th freest economy in the Heritage Organisations 2012 Index of Economic Freedom.
- Cyprus offers 100% foreign ownership.
- Company’s shareholders and directors can be of any nationality.
- Cyprus resident company offers corporate tax exemption on payment of dividends.
- Cyprus Company benefits from double taxation treaties from over 60 countries.
So, what are you waiting for? Let Cyprus be your dream place for business. Don’t waste another minute and contact us. Our advisors at Business Setup Worldwide commit to give you the best advice and assist you with the hectic company formation procedure. Trust us, we will definitely help you establish your dream business and conquer the business industry, exactly the way you want!