How Long Does It Take to Incorporate a Company in Cyprus?
On average, the incorporation of a CY company takes approximately 15 to 20 business days to complete the registration via the expedite route option, provided that all necessary documents are correctly submitted.
It takes relatively longer comparing with incorporating a company in other jurisdictions, however, there is always the option of buying a ready-made shelf company! We have pre-registered general nature CY companies, free from any obligations and without previous activities that can be used straight away.
Steps to Incorporate a Company in Cyprus
1. Company Name Approval
The first step is for the client to submit one name (or a short list of names). The provided names will be checked at the Cyprus Company Registry to ensure their availability and then the application is prepared and filed for approval.
The name approval stage typically takes 5 to 7 business days.
2. Preparation of Company Documents
Once the name is approved, the necessary incorporation documents must be gathered and prepared, including the Memorandum and Articles of Association which must be signed by the shareholders of the Company.
3. Filing with the Registrar of Companies
The prepared documents are submitted to the Registrar of Companies for approval either digitally or in hard copies. Upon successful submission, the company is officially registered, and the Certificate of Incorporation is issued.
4. UBO Declaration Registry
Once the company is set up, the Ultimate Beneficial Owner, meaning the owner, must be declared on the Registrar's of Companies directory. This is now a requirement, any change of the UBO must be reflected accordingly within 30 days of any changes, and the information must be renewed every year. Non compliance can lead to fine imposition, company restrictions and potential criminal liability according to Cyprus Anti Money Laundering Laws.
Required Information and Documentation
To incorporate a company in Cyprus, the following information and documents are required:
- Company Name: A unique name/s that must be approved by the Registrar.
- Business Activities: A brief description of the company's intended business operations in order to draft the Memorandum and Articles of Association (M&A). A general nature M&A can also be adopted.
- Shareholders: At least one shareholder (individual or corporate entity) is required. If trustee shareholder then a Declaration of Trust must be completed and signed.
- Directors: At least one director must be appointed (can be a foreign national or can use a nominee director).
- Secretary: A company secretary must be appointed (can be a foreign national or can use a nominee secretary).
- Registered Office Address: A local address in Cyprus must be provided as the official business address (can be a nominee registered address).
- Memorandum and Articles of Association: These legal documents outline the company's purpose and internal regulations, including the shareholders details and the percentage of shares each shareholder holds.
- Identification Documents:
- Copy of passport or national ID for all directors, secretary and shareholders;
- Proof of address (e.g., utility bill or bank statement, usually not older than three months);
- Reference letters or due diligence documents;
- Know-Your-Client questionnaire;
- Etc.
Role of Nominee Directorship (director/s, secretary, shareholder, registered office) in Cyprus
Nominee services in Cyprus are regulated under Article 4 of the ASP Law (Administrative Services Provider Law) and can only be provided by certain local professionals.
Nominee Directors
There is a distinction between a regular company director and a nominee director.
For the company to be taxed in Cyprus and take advantage of the benefits that a CY company offers (listed below) it has to be considered as Tax Resident in Cyprus.
For a CY company to be considered as a Tax Resident in Cyprus, it has to maintain its 'management and control' in Cyprus, and thus the majority of company's directors need to be Cyprus residents for this purpose.
By "management and control," we refer to the requirement that Directors must demonstrate that all Board of Directors' meetings are held and decisions are made within Cyprus. To ensure compliance, a locally based Nominee Director who resides in Cyprus can be appointed.
Additionally, appointing a local Nominee Director provides an extra level of confidentiality, as only the nominee director's name appears in public records.
Nominee Secretary
It is strongly advised to appoint a nominee secretary for this crucial role in the company's operations. The reason is that the secretary must be readily available to manage various corporate responsibilities, including maintaining statutory registers, issuing share certificates, organizing Board meetings and recording minutes, ensuring timely submission of annual returns to the Registrar of Companies, and overall ensuring compliance with corporate legal obligations.
Nominee Shareholder
By appointing a nominee shareholder to hold the shares acting as a trustee of the shares of the Ultimate Beneficial Owner, the anonymity of the true owners of the shares is preserved, as their name will not appear as 'the registered shareholder' in the records of the Registrar of Companies which anyone can order a company search and be provided with this info.
However, it is important to clarify, that the Ultimate Beneficial Owner of the company is reported and maintained in the UBO Registry of the government as part of anti-money laundering policies as mentioned above.
Registered Office
The CY company must have a registered office address in Cyprus as per the Law requirements, otherwise the incorporation of the company is not possible.
Having a registered office address for your company in Cyprus does not imply that you will have to purchase or rent an office in Cyprus. Owning or renting a place for the operations of the business is only a requirement for certain cases, such as when establishing a company of foreign interests.
It's worth emphasizing, that the nominees always act only upon and according to the instructions of the Ultimate Beneficial Owner (UBO).
Benefits of Incorporating a Company in Cyprus
Cyprus offers several advantages for business owners and investors, making it a preferred jurisdiction for company formation. Some of them are listed below:
1. Low Taxes
- Zero Tax on Trading of Securities
- 2.5% Tax for technology companies via the IP box Regime
- 12.5 % Corporate Tax: Companies in Cyprus pay only 12.5% tax, one of the lowest in Europe.
- Zero Dividend Tax to shareholders
- No Tax on Foreign Dividends: If a Cyprus company receives money (dividends) from another company abroad, they are generally exempt from taxation.
- No Withholding Tax: If your company pays dividends, interest, or royalties to people outside Cyprus, there's no extra tax deducted.
- Double Tax Treaties: Cyprus has agreements with over 65 countries to avoid double taxation, meaning you won't pay tax twice on the same income.
2. Easy and Business-Friendly Environment
- EU Member State: As part of the EU, a Cyprus company benefits from access to the European market.
- English-Speaking Legal System: Cyprus follows a common law legal system, making it familiar to international investors.
- Confidentiality: The names of the Ultimate Beneficial Owners are not made public, except when required by law.
- Simple Business Process: Setting up and managing a company in Cyprus is quick and easy, with less paperwork compared to other countries.
3. Flexible and Affordable Company setup
- No Minimum Capital Requirement: There is no statutory minimum share capital for private limited companies.
- Foreign Ownership: You can own 100% of your company, even if you're not a Cyprus resident.
- Lower Running Costs: Expenses for accounting, audits, and legal services are more affordable compared to many other European countries.
Conclusion
The process of incorporating a company in Cyprus is straightforward, and with the right guidance, it can be completed within four to six weeks. If you are considering setting up a company in Cyprus and need assistance with incorporation, nominee directorship, legal compliance, accounting, audit or tax matters, feel free to reach out to CYAUSE for professional guidance.
About Us
CYAUSE Audit Services has extensive experience in the insurance industry has helped tens of insurance brokers and agents register and get licensed by the local Cyprus regulator granting them passporting access to the rest of the European Union.
CYAUSE Audit Services is an Audit & Assurance firm with offices in Cyprus and the UAE. During 2015 we have been awarded by I.C.P.A.C and the A.C.C.A (local and international association of Chartered Certified Accountants) for the Quality of our Audit Services and our Office's Procedures.
Being a Truly International Audit & Assurance firm, we have associates from all over the world and we are constantly looking for new associates to expand our network further. At present, CYAUSE Audit Services operates internationally through its membership with BKR International amongst the largest American associations in the world, Accace Circle, a co-created business community of like-minded BPO providers and advisors who deliver outstanding services with elevated customer experience. Our network covers almost 40 jurisdictions with over 2,000 professionals, it supports more than 10,000 customers, mostly mid-size and international Fortune 500 companies from various sectors, and processes at least 170,000 payslips globally.
CYAUSE Audit Services Ltd is also a member of BKR International one of the biggest US Accounting Associations of the word and the 3E Accounting Network, an international accounting network which originates from Hong Kong and has more than 80 members from all over the world.
Learn More about Cyprus Corporate Environment
Information about CYAUSE Audit Services and the Cyprus Corporate & Tax System can be obtained from our Website or our YouTube channel which provides valuable information about the Corporate & Tax Environment of Cyprus.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
