Cyprus: International Business Company (IBC)

Last Updated: 4 May 2000

An International Business Company is a legal entity incorporated in Cyprus, that:

  • is owned beneficially by non-residents, either directly or through nominee shareholders
  • performs its business activity exclusively outside Cyprus.

A Cyprus IBC enjoys certain tax and non-tax advantages that make it a very attractive entity for international tax-planning purposes.

The establishment of a Cyprus IBC requires that a specific 2 stage procedure is followed for:

  • obtaining a Central Bank of Cyprus permission
  • incorporating the IBC with the Registrar of Companies

The whole process for the establishment of an IBC, provided that all required documentation is in place takes around 10 working days.

The IBC has to comply with auditing and reporting requirements prescribed by the legislation and professional standards of the regulatory bodies in Cyprus.

The IBC can enjoy duty free status facilities if it operates out of a fully-fledged office in Cyprus and meets specific requirements. The duty free status facilities can be extended to the foreign employees of the IBC working in Cyprus provided that they obtain a work permit on the island.

The operations of an IBC can be performed without the need for a fully-fledged office in Cyprus.

The financial transactions of an IBC can be performed through a bank in Cyprus or a bank in any other country.

The costs of establishing and operating a Cyprus IBC can be classed as follows:

1. Incorporation Costs

One-off cost that depends on the capital of the IBC.

2. Representation Costs:
  • Nominee Shareholders
  • Nominee Directors
  • Company Secretary
  • Registered Office Facility

Annual fee payable on the 1st of January of each year. This fee is time apportioned to 31st December in the year of incorporation.

3. Administration and Accounting

Time based fee.

4. Auditing and Reporting

Time based fee.

5. Tax liability

4.25% on the reported taxable profits.

A detailed breakdown of these costs and of other services together with the application form for registering a Cyprus IBC can be obtained from the web-site on

Central Bank of Cyprus permit

Under the Exchange Control Law, the Central Bank of Cyprus is the competent authority for the issue of the permit, for the establishment of an international business company in Cyprus.

The Central Bank exercises a strict supervisory function to ensure that the permit to set up an International Business Company is given only to desirable and reputable persons or concerns. All information received by the Central Bank on the proposed beneficial shareholders and the IBC are treated with the utmost of confidentiality.

Bank Reference Letter

In order for the Central Bank to consider a permit application for the establishment of an IBC, each and every one of the proposed beneficial shareholders must submit a bank reference from a reputable bank. A specimen bank reference letter can be downloaded from our web site on

Conditions of the Central Bank permit

All permits issued by the Central bank contain certain conditions. The usual conditions are the following:

1. Statutory conditions:

  • The business of the IBC shall be confined to activities outside Cyprus.
  • The share capital of the International Business Company must at all times be held beneficially by non-residents whether directly or through nominees.

2. Financial conditions

  • The International Business Company is not entitled to obtain any finance from local sources other than from an International Banking Unit in Cyprus.
  • All local expenses of the International Business Company are to be covered by foreign funds imported from external sources.

3. Reporting conditions

  • Annual audited financial statements and other required information shall be submitted to the Central Bank periodically.
  • Foreign funds imported and converted to local currency shall be reported to the Central Bank periodically.

The permits for International Financial Services Companies incorporate a number of special conditions to the ones listed above.

Incorporating the Cyprus IBC

On obtaining the permission of the Central Bank, a company must be registered with the Registrar of Companies. The Registrar of Companies requires the following:

  • That the name of the company is approved.
  • The memorandum and articles of association are submitted for filling.
  • The particulars of the directors, the company secretary, the registered office address and the shareholders for the corporate documents.

The beneficial shareholders may choose to use nominee shareholders and directors for confidentiality reasons.

The application form for registering a Cyprus IBC, together with explanatory notes can be downloaded from our web site on

Information needed for Incorporation

1. Name of the proposed company

The Registrar is unlikely to accept a proposed name if it is similar to the name of an existing company or considered misleading or offensive. It is, therefore, advisable to submit two or three alternatives to the first choice of name, so as to save time and unnecessary exchange of correspondence.

A search can be performed to assess whether a name is used by another entity.

Furthermore, one can choose from the list of the already approved names held by Aspen Consultants(R) . To request a company name search or to receive our list of approved names, please contact us directly.

Where the proposed Cyprus company has a similar name to that of its parent company, the Registrar will require the consent of the parent company for the use of such name. A specimen of the consent letter for the use of the name of the parent company can be downloaded from our web site on

2. Objects of the company

The principal objects of the proposed company should be given, describing briefly the main proposed business activities of the company.

3. Share Capital

There is no legal requirement for a minimum share capital either authorised or issued and paid up. However the Central Bank requires a minimum authorised, issued and paid up share capital of C£1,000 (C£1=about US$2). If the company intends to operate a fully-fledged office in Cyprus the issued paid up share capital must be at least C£10,000.

4. Shareholders

There must be at least two shareholders that can be either individuals or companies. The particulars required for each shareholder are:

  • Full name
  • Address
  • Nationality
  • Occupation
  • Number of shares to be held
  • Passport number in the case of individual

Where the proposed company is to be a wholly owned subsidiary of another company, it is usual that all the shares, with the exception of one, are held by the parent company and the remaining one is held by either another company or individual. Should anonymity be required, it can be effected through nominees (local or foreign) holding the shares for the beneficiaries. In such a case permission is required from the Central Bank, which is readily granted.

5. Directors

A minimum of one director is required and there is no maximum. It is advisable though to appoint at least two directors. There is no necessity to have local directors although in most cases it is advisable. The particulars required for each director are:

  • Full name
  • Address
  • Nationality
  • Occupation

6. Company Secretary

The company secretary may be local or foreign but a local secretary is advisable. The particulars required are the same as for directors.

7. Registered Office

The registered office of the IBC must be in Cyprus. This is the place where notices, orders and other official documents can be served upon the company.

8. Bank References

The Central Bank of Cyprus requires a bank reference letter from a reputable bank as to the credit worthiness of the proposed beneficial shareholders. A specimen bank reference letter can be downloaded from this site.

Auditing and Reporting Requirements

Accounting Records

The company law requires that a company maintains proper accounting records with supporting documentation at its registered office in Cyprus.

The accounting profession in Cyprus defines proper accounting records as those maintained in compliance with the International Accounting Standards.

Audited Financial Statements

The company law requires that a company prepares and submits financial statements in accordance with the International Accounting Standards, audited in accordance with the International Standards on Auditing by a Cyprus registered auditor.

The audited financial statements in the reporting language are submitted to the Central Bank of Cyprus and to the tax authorities annually by the 31st December of the year following the company’s year end. If one of the shareholders or directors of the entity is a company then the audited financial statements in Greek are submitted to the Registrar of Companies.

The first reporting period can be up to 18 months from the date of incorporation. Financial statements for a 12-month accounting period have to be prepared annually after that.

Tax Compliance

1 Companies

A company has to submit a preliminary tax assessment for the estimated taxable income for the calendar year by 31st July of that year. The tax liability at 4.25% on the estimated income has to be paid in 3 equal instalments by:

  • 31st July
  • 30th September
  • 31st December

A revision of the estimated taxable income and the resulting tax liability can be submitted by 31st December.

The revised taxable income may only be reduced to an amount for which provisional income tax was already paid, that is the revision cannot result in a refund.

A company has to file an annual tax return together with its audited financial statements with the commissioner of income tax in Cyprus within 12 months from the end of its financial year.

2. Individuals

The company deducts the tax on earnings of individuals employed in Cyprus on a monthly basis. This PAYE tax is payable one month after deduction.

The company submits by the 30th April each year the employer’s return and analysis (IR7) for the employees working in Cyprus.

Each employee working in Cyprus has to submit an income tax return by 30th April following the year of employment.

Returns to the Registrar of Companies

A company has to submit its audited financial statements together with the annual return to the Registrar of Companies.

Privately owned companies are not required to submit audited financial statements to the Registrar of Companies.

The company’s annual return must be dated 14 days after the company’s Annual General Meeting (AGM) and must be filed with the Registrar within 28 days of that date.

The AGM of the company’s shareholders is held 23 days after the date of approval of the financial statements of the company by the directors.

Notice for the following, must be given to the Registrar of Companies within one month after the passing of the relevant resolution:

  • redemption of preference shares,
  • increase in authorised share capital and;
  • issuance of new shares.

Notice for the following changes, must be given to the Registrar of Companies within 14 days of the relevant change:

  • the board of directors,
  • secretary and,
  • registered address,
  • shareholders.

Returns to the Central Bank of Cyprus

Within six months from the end of the financial year, the audited financial statements must be filed with the Central Bank of Cyprus together with a confirmation from the auditors stating that the company has not carried out any transactions with residents other than local payments for administrative purposes.

To receive more information on offshore services or to discuss the particulars of your international tax planning needs please contact the authors.

Duty Free Status facilities

International business companies and their foreign employees are entitled to a number of benefits with regard to the duty free importation of certain goods

To receive more information on the conditions governing the duty free status facilities please contact us directly.

Employment and Residence permits

All foreign individuals wishing to work and reside in Cyprus need a temporary employment and residence permit.

To receive more information on the conditions governing the temporary employment and residence permits please contact us directly.

Operating a Cyprus IBC

The operations of an IBC can be performed without the need for a fully-fledged office in Cyprus.

In the case where nominee directors are used for the establishment of the IBC the beneficial shareholders or the decision makers can be issued with specific Powers of Attorney to enable them to engage the IBC into business activities as prescribed by the Memorandum and Articles of Association.

Aspen Consultantsâ undertake to perform the day-to-day activities of an IBC, including cash disbursements, re-invoicing, payroll preparation, handling of documentary letters of credit, administration and mail forwarding. A list of the day-to-day management services offered is included in the list of our services.

The bank account accounts of a company can be operated by signatories known to the beneficial shareholders.

Banking in Cyprus

The banking system in Cyprus is highly developed and efficient, capable of coping with the ever increasing needs of the business community in a fast growing economy.

Banking arrangements and practices, the range of services available and the methods of management and control, closely follow the British pattern.

The banks operating in Cyprus include:



Bank of Cyprus

Barclays Bank PLC

Cyprus Popular Bank

Bank Nationale de Paris

Hellenic Bank

Credit Suisse First Boston

Arab Bank

HSBC investment Bank

Alpha Bank

Societe Generale

National Bank of Greece


The commercial banks of Cyprus have strong international connections, which enhance their ability to provide banking services on an international level.

There are over 30 international banking units offering services to IBC’s in Cyprus.

The content of this article is intended only to provide general guidelines related to this particular matter. For your specific circumstances, full specialist advice is recommended.

To receive more information on a specific bank and its service or to receive account opening forms please contact us directly.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.