In this article, we will take you through the main steps of registering a company in Cyprus (this remarkable Island). You will be surprised at how easy it is.
Why should you register a company in Cyprus?
When we talk about registering a company, many people think it is just a natural step of opening up a shop and start selling. It may be true in someplace because laws of lands differ.
Things are different in Cyprus. Even though opportunities are immense, one must understand the best way to tap in. Cyprus as a full member of the European Union remain a safe and popular destination for investment due to significant tax benefits that Cyprus is offering.
Registering a company in Cyprus comes with several benefits, including:
- Being an EU company. If you are looking for the best way to enjoy the privileges and international images of having an EU company, Cyprus offers the perfect gateway. You will be exposed to global appreciation, making it easy for you to grow your business.
- Lower tax rates. Running a business in any EU state can be overwhelmingly costly in terms of taxes. Cyprus is one of the lowest, at a rate of 12.5% of corporate tax net on profits.
- Sale of shares. Tax free sale of shares, ideal for holding companies.
- Access to international financial institutions. You can get such privileges quickly by registering a company in Cyprus. You can easily grow your business through these services.
- Tax-free dividends. And when you have made your profit, send them anywhere you want. You don’t have to pay hefty taxes for these services as tax on dividends for foreign nationals either dividends receivable or dividends paid is 0%.
- International wings. From Cyprus, you can do business without any restrictions. You will be free to operate within the EU region and the world at large.
- Freedom to run your business any way you want. Many countries put restrictions on foreign transactions. In Cyprus, you enjoy the freedom of doing things as you wish.
- Adoption of B2B transactions in EU and outside EU with VAT 0% based on EU directives.
- Double taxation relief irrespective of double taxation treaty or not.
- Signed double taxation treaties http://mof.gov.cy/en/taxation-investment-policy/double-taxation-agreements/double-taxation-treeties
- Remote business setup. Cyprus has some of the most flexible businesses in the world. You don’t have to travel to Cyprus for registration of your company. Technology makes it easy to find help.
Step By Step Guide: Register a company in Cyprus
Setting up a company in Cyprus is straightforward. It can take about two weeks, and you are good to go. Besides, you don’t even need to travel here physically. Here are steps for the incorporation procedure.
Step 1: Consultation
If you are not ready to come in person, you need a good company for consultation. You must understand how things work around here and how to get the best out of it.
You must find a service provider who is familiar with how things run in Cyprus. You may be asked to sign an engagement letter before anything else.
Also, prepare to pay an installment of the total engagement fee. You will also be required to present scans of your personal and corporate due to diligent documents.
Step 2: Planning
Before opening your company, it is vital to put in place a proper plan. This step may include:
- Choosing an appropriate name for your business. You need a name that captures the attention of your customers.
- Create a corporate structure. It is vital to outline the structure of your company clearly. This is like a skeleton of your company. The step includes finding directors and shareholders; a process can take a while.
Step 3: Reserving a business name
Once you have settled on the preferred name, it must be reserved as fast as possible for registration approval. It is reserved with the Department of Registrar of Companies and official Receiver (DR-COR). Once approved, the name will be under reservation for up to six months.
Here, you are now ready to register a company in Cyprus. This will happen in three phases:
Step 4: Phase one of incorporation
This step involved company document preparation. The first thing for an establishment is signing the Memorandum and Articles of Association of the company. This document carries the name and object of the business. In must have:
- The address of the subscribers
- Amount of the share capital
- Name of subscribers and the number of shares
Articles of association must come with:
- Voting rights of members
- The internal regulations based on which a company will be conducted in its daily operations
- Provisions about the rights, duties and responsibilities of the company’s shareholders and directors.
- The date of the shareholders’ general meeting
- And the first appointment directors
Other documents to register a company in Cyprus include personal and business legal documents and bank details.
Step 5: Phase Two or incorporation
This step involves document submission. Here you will be required to submit signed forms, certified due diligence documents, and an affidavit signed by a Cypriot lawyer.
Step 6: Phase Three or incorporation
This step involves registration approval. The DR-COR will approve your company registration and the certificates once the company is incorporated.
Documents you will receive upon completion:
Memorandum and Articles of Association Signed by the DR-COR
Certificate of directors and secretary
Certificate of Shareholders
Certificate of Registered office
Certificate of Incorporation
Stage Three: Post Incorporation
Once you have registered the company, you will need to finalize your plans. This includes:
Step 7: Opening a bank account
With a Cyprus company you can apply for a bank account opening in any country of your interest and/or doing business with.
Step 8: Registering Tax and VAT
It is vital to obtain your company tax identification number (TIN) which is compulsory to have as well as VAT registration if your expected turnover for the year will be equal or more than 15.600 Euro.
Step 9: Registering as an employer
You will not hire staff in your Cypriot company before registering with the Ministry of Labor, Welfare, and Social Insurance as an employer and receive unique id number as employer.
And now you can start operations.
This process can be tedious, especially if you are not in the country. But you can make it easy by employing the services of our firm.