Menu
Menu
Menu
Many of our clients look to register a company in foreign jurisdictions to setup or extend their business. However, our experts here at InteliumLaw are also keen to share the benefits of a company formation in Cyprus. Here, you’ll find what you need to know about taxes, the company formation process, and why Cyprus might be right for your company.
When deciding on registering a company in Europe do not overlook the many benefits of a company setup in Cyprus. Boasting policies that encourage business growth and reliable legal framework, there’s a lot to like about Cyprus as an entrepreneur looking to setup a company.
The low level of corporate taxation is one of the big selling points of a company setup in Cyprus. As one of the lowest rates in Europe, it clocks in at 12.5%. Better still, with the right setup, you can cut that rate by a further till around 2.5%. With less tax to pay, you’ll have more money to advance your business.
Along with its low taxation, Cyprus also offers a wide range of pro-business tax exemptions and incentives. You won’t have to worry about withholding taxes for your interest payments, dividends, or royalty payouts. This kind of tax efficiency lets any company setup in Cyprus thrive.
Keeping with the topic of taxation, you might also be lucky enough to tap into Cyprus’ Double Taxation Treaties. The nation has established an extensive network of over 60 nations from which a company setup in Cyprus won’t be taxed twice on the same income. It’ll help your business with international trade and tax planning strategies.
Another benefit granted to every company setup in Cyprus is the legal environment. Legal stability is sought by all businesses, and that’s exactly what you’ll get in Cyprus. The laws in place are designed to safeguard and instill confidence in business interests and are based on the common law principles of England.
Finally, there’s a workforce to tap into that’s highly skilled and versatile cause Cyprus is a popular place for skilled foreigners location. Having formerly been hailed as a tax haven, Cyprus has long developed professionals who’re keen to help businesses based in Cyprus grow. Key to this is that many of these highly-educated professionals are fluent in many languages, potentially helping your international plans.
The process of company registration in Cyprus requires careful thought and due consideration throughout, particularly when it comes to the first step. You’ll need to home in on the right legal form of your company and its ownership structure. Doing this will determine the trajectory of your business and its day-to-day operations.
At InteliumLaw, we can offer personalized guidance to help you commence your journey of company registration in Cyprus, which begins with picking the right legal form. These options include:
Under The Companies Law of Cyprus (Law No. 113), to complete the requirements of company formation Cyprus enforces, you’ll need to work through an installed package of documents. This package requires a qualified lawyer to prepare and notarise in either English or Greek. Your business will then need to complete these documents:
Every business and its needs are unique, as are the places around the world where you can register. The requirements of a company setup Cyprus upholds might different from forming a company in another jurisdictions. What we do at InteliumLaw is offer personalized guidance to help you start, process, and complete your company setup in Cyprus.
Knowing your company goals and status – be it a startup or multinational corporation – we can then find the right ownership structure for you. The proper structure for your Cyprus-based company will protect your personal assets, minimize your tax liabilities to help maximize profits, and give you the desired flexibility and control over business operations.
There are many benefits to gain from opting for a Cyprus company formation, and at InteliumLaw, we’re ready to help you make the most of the very business-friendly legal environment there.
Yes. Cyprus company can be registered with 100% of non-resident shareholders (either individuals, or legal entities).
Cyprus warmly welcomes non-residents to establish businesses within its borders, and offers a highly favorable business environment. In Cyprus, non-residents have the flexibility to establish a diverse array of companies, ranging from private limited enterprises to public corporations.
Corporate income tax (CIT). Cyprus stands out with its competitive corporate income tax rate, fixed at a low 12.5%. This rate is one of the most appealing in the European Union. 12,5% corporate tax rate applies to a company's net profit. The tax rate could be reduced to 2.5% rate by applying incentives such as Cyprus IP box regime, notional interest deduction (NID).
Withholding tax on dividends. One of Cyprus's key strengths lies in its policy of not imposing withholding tax on dividends paid to non-resident shareholders.
Withholding tax on interest. Interest payments made by Cypriot companies to non-resident entities enjoy a withholding tax exemption in most cases. Although certain interest payments might incur Special Defense Contribution (SDC).
Withholding tax on royalties. In line with interest payments, Cyprus refrains from imposing withholding tax on royalty payments directed to non-resident entities. This open-handed approach creates an encouraging atmosphere for intellectual property-related collaborations and innovations.
Withholding tax on management and consultancy fees. Payments made for management or consultancy services to non-resident individuals or entities are not subject to withholding tax in Cyprus.
Withholding tax on capital gains. Capital gains arising from the sale of shares in a Cyprus company generally escape withholding tax, regardless of the seller's residency status. However, prudent consideration of Cyprus's Double Taxation Treaties (DTTs) with various countries is advisable, as they might influence the tax implications for non-residents.
Double Tax Treaties. Cyprus boasts an expansive network of over 60 double taxation treaties. These treaties could significantly reduce withholding tax rates on cross-border transactions.
Capital Gains Tax. Capital gains from share sales are generally exempt from taxation. While exceptions exist, this policy fosters a dynamic market for share transactions.
Value Added Tax (VAT). A standard VAT rate of 19% applies to the supply of goods and services. Reduced rates at 5% and 9% apply to specific goods and services.
Intellectual property (IP) Box Regime. Cyprus takes pride in its Intellectual Property (IP) Box Regime. Qualifying IP income enjoys a reduced tax rate of 2.5%.
Special Defense Contribution (SDC). SDC applies to passive interest income, dividends, and rental income. Rates vary based on income type and recipient.
Social Insurance Contribution. Recognizing the importance of social welfare, companies in Cyprus contribute to the social insurance fund, ensuring the well-being of their employees
Cyprus emerges as an enticing destination for establishing IP Holding and Development companies, offering not just an efficient tax structure but also the robust legal protection upheld by EU Member States. Embracing international standards, Cyprus's IP regime aligns seamlessly with the evolving landscape of IP income taxation, following OECD's guidance and EU Code of Conduct assessments.
Benefits of Cyprus IP Box Regime. 80% of qualifying profits from specified assets are treated as tax-deductible expenses for eligible entities. An effective tax rate can plummet to 2.5%. This, coupled with 12.5% corporate tax rate, paints a compelling picture for businesses seeking tax efficiency.
Claiming Cyprus IP Box Regime. Begin by identifying the intellectual property assets that qualify under the regime. This includes patents, copyrighted software programs, and specific intangible assets recognized as non-obvious, useful, and novel.
Accurate documentation is key. Maintain detailed records of your qualifying IP assets and corresponding R&D activities. Thorough documentation not only supports your claim but also acts as a testament to the genuine nature of your IP-related endeavors.
When filing your corporate tax returns, ensure you include the qualifying IP profits in the appropriate section.
Tax laws are dynamic. Stay informed about any updates or amendments to the Cyprus IP Box Regime. Regularly review your IP assets to ensure they meet the qualifying criteria. Compliance with regulations guarantees you continue to reap the maximum benefits from the regime.
Cyprus has strategically positioned itself as a global hub for entrepreneurs and corporations alike. One of the key factors contributing to Cyprus’s appeal is its adept handling of corporate tax rates.
Competitive Corporate Tax Rate. Cyprus boasts a remarkably low corporate income tax rate of 12.5%. This rate significantly enhances the profitability of companies.
Efficient tax structuring. Cyprus encourages strategic tax structuring through its transparent and well-defined tax regulations. Businesses can take advantage of various exemptions, allowances, and deductions offered under the tax laws.
Extensive network of Double Taxation Treaties. Cyprus has over 60 Double Taxation Treaties with various countries worldwide. These treaties play a pivotal role in minimizing the impact of international taxation. By alleviating the burden of double taxation, businesses can engage in cross-border activities with confidence, and to ensure their profits are not unfairly taxed in multiple jurisdictions.
Taxation of capital gains and dividends. Capital gains from the sale of shares and dividends received by Cyprus companies are generally exempt from corporate tax.
Transparent regulation and compliance. Cyprus maintains a robust and transparent regulatory framework. The transparent nature of the tax system allows Cyprus companies to comply with regulations effectively and to reduce the risk of associated penalties.
Typically, the standard timeframe for completion hovers between 1 to 2 weeks. The timeframe depends on the following factors:
Transferring your existing business to Cyprus involves a bespoke process designed to ensure a seamless transition. Main steps include:
Tailored business structure. Determine the ideal legal framework for your Cyprus legal entity considering your business objectives and specific operational needs.
Cyprus business registration. Transform your existing business into a new legal entity by setting up a company in Cyprus. This submission of documents, including the company's memorandum and articles of association, to the Cyprus Registrar of Companies.
Asset and liability transfer. Develop a plan to transfer assets and liabilities seamlessly. Real estate, intellectual property, contracts, employees – each transfer necessitates comprehensive documentation to ensure both legal clarity and compliance throughout the process.
Tax efficiency. Navigate the intricate landscape of tax implications. Collaborate closely with tax professionals to manage your tax liabilities.
Regulatory navigation. Receive approvals and permits, required for your industry and business activities. These may encompass industry licenses, health and safety permits, or environmental clearances.
Banking connections. Forge a financial alliance by establishing a corporate bank account in Cyprus. With diverse requirements across banks, it is recommended to engage with multiple institutions.
Ongoing compliance. Ensure compliance with Cyprus regulations. It is highly recommended to engage a local accountant or financial advisor.
Setting up a company in Cyprus does not require physical presence.
While physical presence isn’t obligatory, having a local registered office address in Cyprus is essential. This address is used for official communications and legal matters. The registered office is also important for tax residency status in Cyprus.
Professional service providers or esteemed law firms in Cyprus will assist you with the registered office provision and also step into the role of your company secretary. This position is mandatory for the Cyprus company formation and further legal existence.
Also, having a local director will help you to substantiate tax residence requirements in Cyprus.
The accumulated experience and tracking of future changes in this area allow us to be proactive
for our clients and develop the most adapted business structures to modern conditions.
By submitting this form, you hereby authorize Inteliumlaw to process your information for the purpose of addressing your inquiry. You retain the right to revoke this consent at any point. For further details, please review our Privacy Policy.
The accumulated experience and tracking of future changes in this area allow us to be proactive
for our clients and develop the most adapted business structures to modern conditions.
By submitting this form, you hereby authorize Inteliumlaw to process your information for the purpose of addressing your inquiry. You retain the right to revoke this consent at any point. For further details, please review our Privacy Policy.
