FAQ – Incorporating a Cyprus Company

  1. What are the Companies Tax rates and personal income tax rates in Cyprus?

 

Companies in Cyprus are taxed on their net profits i.e. sales less expenses at a rate of 12.5%

 

Individuals being tax residents in Cyprus are taxed as follows:

 

Income for the underlying tax yearTax Rate

Euro

%

From 0 to 19.500

0

From 19.501 to 28. 000

20

From 28.001 to 36.300

25

From 36.301 to 60.000

30

Over 60.000

35

 

  1. What is the time frame to open a Company in Cyprus?

It needs to be noted that 3-5 days are needed for the name application approval.

Upon that the Registrar of Companies will need another 5-6 working days to incorporate the Cyprus Company.

 

  1. Do the beneficial owners need to visit Cyprus for the incorporation of the Cyprus Company?

No it is not necessary for the beneficial shareholder to visit Cyprus at any stage of the Company incorporation unless they want to do so themselves.

 

  1. What is a “nominee Director”?

Nominee Directors can be either legal or natural persons who are used when clients want to keep their anonymity since all Company documents are open to the public via the Registrar of Companies.

 

  1. What is a “nominee Shareholder”?

Same with nominee Directors, nominee Shareholders can be either legal or natural persons who are used when clients want to keep their anonymity since all Company documents are open to the public via the Registrar of Companies.

 

  1. What is a registered office?

As per law requirement a Cyprus Company needs to have its Registered Address in Cyprus. Our firm shall provide you with the above.

 

  1. Do you need licenses in Cyprus for your Company’s activities?

Yes. There are certain activities like banking and financial institutions. Furthermore, hotels and restaurants who intent to operate in the Republic of Cyprus will also require special licenses to be obtained.

 

  1. What are the annual requirements of a Cyprus Company?

A Cyprus Company is subject to an Annual Levy of Euro 350 payable to the Registrar of Companies, and is obliged to submit on a yearly basis Audited Financial Statements to the Income Tax Office. Moreover, an Annual Return with the audited financial statements must be submitted with the Registrar of Companies.

 

  1. What is the procedure of opening a bank account in Cyprus?

There is no fixed procedure when opening a bank account. Each banking institution has its own procedures and requirements regarding the know-your-client and documentation requested.

 

  1. How many days are needed to open a bank account in Cyprus?

It will take between 2-3 weeks to open e a bank account in Cyprus as long as all documents requested are in place as per bank requirements.

 

  1. Upon completion of the Company incorporation what other factors should I consider?

The Company should upon incorporation:

  • Obtain a Tax Number by the Cyprus Tax Authorities
  • Assess whether is needed to register for a V.A.T. number
  • Assess if Company will be required to register with the Social Insurance authorities in Cyprus

 

  1. When incorporating a Cyprus Company should someone opt for the Cyprus Resident Company?

Yes. The Company will benefit from the low tax rate of 12.5% and at the same time via the numerous Double Tax Treaties and unilateral Tax credits allowing it for a successful tax plan implementation.

 

  1. If someone opts for a non-resident Cyprus Company what will be the impact on the Company?

The Company will not be subject to Tax in the Republic of Cyprus and as a natural course of effect it will not be able to benefit from the numerous tax treaties Cyprus has entered with various countries.

 

The content of the above article is to provide a general background on frequently asked questions on Incorporating a Cyprus Company. Specialized, tailor made advice should be requested based on each scenario and specific needs.