Company registration in Cyprus

Cyprus ranks among the top nations regarding investment or opening a new venture. The government here is remarkably supportive and provides various business-friendly policies and incentives. The cost of legalizing an entity in Cyrus is relatively lower than in other nations. The country has a formidable legal and tax structure, which effectively undermines illicit actions. Let’s delve into the process concerning company registration in Cyprus.

What makes Cyprus an ideal business landscape?

• Foreign investors seeking company formation in this part of the world are not required to appoint a resident as a director or a shareholder.
• Cyprus has entered into Double Taxation Agreements with several nations, preventing entrepreneurs from paying taxes twice for company formation.
• Cyprus is an indispensable part of the European Union (EU), allowing it to enjoy four freedoms- transfer of goods, services, capital, and people. These are accessible to all investors regardless of nationality.
• Cyprus welcomes foreign direct investment with open arms, enabling corporate accessibility and economic freedom.
• The country supports Ease of Doing Business and thus provides an accessible doorway for entrepreneurs to start their venture, with a minimum capital as low as EUR 1.
• The tax in Cyprus for local businesses is 12.5% of the earned revenue. The income from different nations is not subjected to such a tax slab.
• The infrastructure here allows for easy and inexpensive space acquisition for performing business chores.
• Overseas entrepreneurs are allowed for 100% profit repatriation without conceding any tax deductions.

Business Structures for Company Registration in Cyprus

An applicant seeking company incorporation in Cyprus must choose an apt business structure from the following.

LLC

An LLC stands for Limited Liability Corporation. It is a business model that provides for a limited liability for the member. The minimum capital required to form such an entity is EUR 1.

Investment Holding LLC

As the name suggests, this business model is meant for overseas investors with ample capital. The corporate standing of this model is identical to LLC with the only exception being the requirement of EUR 2 Million investment.

Representative Office

A foreign company seeking promotion activities abroad can opt for this business model. Common legal constraints that this model faces include isolation from commercial activities, nil legal identity, and no sale agreement with any third parties.

Trust Entity

Usually, the trust oversees the investments and family assets. The corporate tax does not apply to this business model. The minimum capital requirement to constitute this structure is only EUR 1.

Free Zone LLC

Free Zone LLC fosters an open business environment accessible to all types of investors regardless of nationality. This business model attracts a corporate tax of 12.5%.

An Overview of Sri Lanka Corporate Tax Structure

The corporate tax rate has undergone some changes last year. The new effective rate is now poised at 30%, which is 6% higher than the erstwhile rate. The 40% rate is for the companies belonging to the tobacco, liquor, and gambling sectors.

Regarding statutory tax, a rate of 30% is imposed on gains obtained from selling assets like shares. However, this rule doesn’t apply to gains from selling land to a listed real estate investment trust (REIT). The current VAT rate is poised at 18%, which is 3 % higher than the older rate.

Paperwork Requirement: Company Registration in Cyprus

Being accurate and legit with your paperwork is vital for successful company formation. Here are some dossiers you must arrange for company registration in Cyprus:

• Institution of Declaration of Conformity (Form HE1) enclosing the lawyer’s signature.
• Charter documents such as AoA in Greek language (According to Table A of the First Annex of the Companies Law).
• Translated documents
• Name approval consent.
• EUR 165 or EUR 250 – companies having share capital and lacking share capital.
• Form HE5- For a public company, attracting an additional fee of EUR 20.

Company Registration in Cyprus: Step-by-Step Guide

The procedure concerning the company registration in Cyprus is given below:

Step 1: File online application

Head to the online portal of the companies registry of Cyprus. Common steps involved in application filing include selecting a business type, providing a company name, entering details concerning business chores, etc.

Step 2: Name Approval

Name selection is the next step in this process, requiring due diligence and a cautious approach. Perform the name search on the authority’s portal. Avoid names that you think are inappropriate from a religious or legal standpoint. Once you tick all the boxes, apply to reserve the proposed name. The fee for application filing is EUR 10.

Step 3: Documents uploading

In the next step, the applicant must indulge in the registration process by visiting the authority portal. This step requires the applicant to file an online application and upload documents as cited in the above section.

Step 4: Grant of Certificate of Recommendation

If the ROC finds no issues with the paperwork, he/she will publish the registration status in the official gazette, serving as legal proof for company formation. Following this, the incorporation certificate shall be granted to the applicant online or offline.

Step 5: Grant of an additional certificates

The issuance of the following certificates shall follow the grant of certification of recommendation.

• Certificate of Membership;
• Registered Office Management Certificate;
• Certificate of Directors and Secretary;
• Certified copy of the charter documents;
• Certified copy of the Certificate of Recommendation.

Post Compliances for Company Registration in Cyprus

A Company registration comes with an array of legal obligations that the application must fulfill to stay compliant. These obligations are as follows:

• The entity must register with the concerned tax authority within 60 days. The successful registration would lead to the grant of a tax identification number.
• If the sale of the products or services surpasses the valuation of EUR 15,600, the owner must fulfill the applicable tax without fail.
• A social insurance certificate is a must for an employer.
• Registering all Trade Marks is also vital to keep intellectual properties safe.
• Any changes to the company or its management should be intimated to the RoC via a prescribed application, attracting a fee of EUR 350. This should be done before June 30 of the subsequent year.

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