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Cyprus company formation

Professional Services:


Looking to open a company or branch outside your country? Consider one of the many credible Cyprus company formations.

This section provides an overview on Cyprus company formations, including definitions, structure and benefits. The following is only a guide and should in no way be used to substitute full professional advice from a local practitioner. Indeed, Investment Gateway associates are in the best position to further explain everything you need to know about a Cyprus company, including formation process, the different types of companies available for your purpose and what professional service relate to your particular situation.

It is important to highlight from the very beginning that Cyprus is not a tax haven nor is it considered to be an offshore jurisdiction, but rather a gateway to credible investments, particularly to the EU and EMEA region, as well as for global tax planning strategies, wealth management and international banking. Cyprus company formations are considered as onshore, enjoying the same benefits (such as in legal structure and taxation) as normal resident companies in Cyprus. They also enjoy interrelated benefits with other European Union companies and markets, i.e. a Cyprus company is also an EU company enjoying advantages in trade, legalities, marketing/PR and VAT. Read more about the Cyprus VAT registration procedure for companies and individuals

Obtain a quick quote to form a Cyprus Company from a variety of leading agents in the market. Complete the quick-and-easy Investment Gateway company formation quotation form.

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Cyprus Non-Resident and Resident Companies

There are two key types of company formations possible in Cyprus:

Cyprus non-resident company (foreign company branch)

A company incorporated in Cyprus is not considered to be a tax resident of Cyprus if it is not managed and controlled in Cyprus. A Cyprus company not managed and controlled in Cyprus is expected to have the majority of the directors to reside outside Cyprus and to hold Board Meetings outside Cyprus.

Non-resident Cyprus companies are not subject to taxation in Cyprus unless they have a permanent establishment in Cyprus, receive rental income from property in Cyprus or they make profits from the sale of Cyprus based real estate.

A Cyprus non-resident company cannot take advantage of the extensive double tax treaty network concluded by Cyprus.

Cyprus resident company

A company incorporated in Cyprus is considered to be a tax resident of Cyprus if it is managed and controlled in Cyprus. A company to be managed and controlled in Cyprus is expected to have the majority of directors to reside in Cyprus and to hold Board Meetings in Cyprus. Resident companies are subject to corporation tax at the universal rate of 12.5%, making Cyprus the lowest corporate tax rate in the European Union and lowest non-offshore jurisdiction in the world.

By virtue of the relatively new Cyprus-EU taxation legislation, the following are what tax exceptions are applicable with a Cyprus resident company:
  • Overseas profits. Profits of a resident company derived directly or indirectly from a permanent establishment outside Cyprus are not subject to tax. The exemption is not granted if more than 50% of the activity of the paying establishment generates investment income and if the foreign tax rate is significantly lower than the one applicable in Cyprus.
  • Dividends exemption. Dividends received by a Cyprus resident company are not subject to tax and are excluded from net profits, although are subject to a 15% special defence contribution tax – this can also be avoided if the direct holding is at least 1% of the share capital of the overseas company.
  • Capital gains and gains on shares exemption. Profits from the sale of securities (shares, bonds, debentures, etc) are not subject to tax in Cyprus. No capital gains tax is levied, unless from immovable property in Cyprus (at 20%) or if shares represent immovable property located in Cyprus (except for shares of companies listed on a recognised stock exchange).
  • No withholding tax. Dividends and interest paid by a Cyprus company are exempt from withholding tax. Royalties paid to non-residents derived from sources outside Cyprus are also not subject to withholding tax. Dividends paid by a Cyprus company to non-residents are also not subject to withholding tax.
  • Exemption in interests. 50% of the interest received by a Cyprus resident company is exempt from income tax, either from Cyprus or international sources. The other 50% is subject to a special defence contribution tax of 10%. If interest arises from day-to-day business activities, it will not be subject to the special defence contribution tax, since interest is already subject to income tax.

Obtain a quick quote to form a Cyprus Company from a variety of leading agents in the market. Complete the quick-and-easy Investment Gateway company formation quotation form.

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Cyprus Company Compliance

A Cyprus resident company must meet certain compliance requirements, providing the Cypriot registered company with substance. As per Cyprus Income Tax Law, a company is tax resident in Cyprus if management and control is exercised in the Republic of Cyprus. Although there is no exact definition as to what constitutes management and control of the company, remaining somewhat vague, or rather flexible in meaning, companies must meet certain compliance requirements. In other words, verify that a certain level of management and control is exercised in Cyprus.

The closest interpretation of what 'management and control' means and that has been adopted by the Cyprus tax authorities derives from the OECD model convention in relation to the place of 'effective management', stating:

"The place of effective management is the place where key management and commercial decisions that are necessary for the conduct of the entity's business are in substance made. The place of effective management will ordinarily be the place where the most senior person or group of persons (for example a board of directors) makes its decisions, the place where the actions to be taken by the entity as a whole are determined, however, no definitive rule can be given and all relevant facts and circumstances must be examined to determine the place of effective management at any time."

In general, the company should exercise most control of the company and make decisions relating to the company's operations and general policies via its board of directors based in Cyprus, such as investment, financing and dividend payments. Thus, some of the primary criteria for determining if such management and control is being exercised in Cyprus include:
  • Most of the board of director meetings should take place in Cyprus. During such meetings, board of directors should make key company decisions and agreements, or at least have them signed by the registered company in Cyprus.
  • Minutes (and/or documentation) of such meetings should be maintained at the company's registered address in Cyprus.
  • Ideally, board of directors should be registered as Cypriot tax residents, or reside in Cyrus.
  • Non-resident directors should not be in a position to form a quorum, i.e. the minimum number of members needed to form a deliberative decision-making assembly for the company, or vested with power to override the board's decisions and general power of attorney.
Note: Nominee services (director, secretary, shareholder) provided by Investment Gateway's associates help immediately meet some of these compliance requirements.


Compliance via Professional Services

Other important criteria that substantially support and justify the company's management and control in Cyprus include:
  • Mail correspondence should be received by the company's mailing address in Cyprus and not be directed to its non-Cyprus shareholders. From here they can forwarded as needed.
  • Fax and telephone correspondence can also be received by the company's registered fax and telephone number in Cyprus.
  • Website and e-mails: although not absolutely essential, it is advisable that the company has a registered Cyprus or EU domain name (.cy or .eu), and/or is hosted by a Cypriot based company – this includes bulk hosting to a third party server outside Cyprus but charged by a local Cypriot hosting provider, such as the service Investment Gateway and associates provide.
  • Corporate filings and reporting functions should be performed by representatives located in Cyprus.
  • Company seal and financial records should be maintained in Cyprus
  • The company should open a bank account in Cyprus. This bank account should finance the operations of the company registered in Cyprus.
  • Other company substance and compliance to further support some sort of management and control in Cyprus, such as donations to the carbon offset initiative by Investment Gateway and Climate Friendly, accredited to the company.
Note: Professional company services provided by Investment Gateway and associates help meet these compliance requirements.

Obtain a quick quote to form a Cyprus Company from a variety of leading agents in the market. Complete the quick-and-easy Investment Gateway company formation quotation form.

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Cyprus Company Formation – Snapshot

Company Characteristics Explanation for a Cyprus Company
Types of companies in Cyprus Cyprus Public Limited Company
Cyprus Exempt Private Company
Cyprus Public Company Limited by Shares
Cyprus Company Limited by Guarantee
Cyprus Branch of Overseas Company
Cyprus General Partnership
Cyprus Limited Partnership
Cyprus Sole Proprietorship
Cyprus Trust Funds
Cyprus Holding and Investment Companies
Cyprus Asset Holding Company
Cyprus Operational Trading Holding
Cyprus Management Holding Companies
Legal System Common Law (modelled on UK structure)
Confidentiality/Anonymity Cyprus offers a certain level of anonymity and privacy for Cyprus companies. Nominee director/shareholder service can, to an extent, be used to maintain the anonymity of the beneficial owner. Note, Cyprus has agreed to share information about savings held in Cyprus banks by EU nationals with the account-holders' countries. A Cyprus company must also produce annual financial statements of consolidated accounts.
Ownership Company formation in Cyprus allows for 100% foreign ownership, and non-EU investors can invest in Cyprus without capital restriction.
Company directors A Cypriot registered company must have at least one director.
Company secretary Yes, required by Cyprus company law.
Company shareholders Minimum of one shareholder is required for company registration in Cyprus. Shareholders can be an individual or corporation of any nationality.
Cypriot Taxation structure Cyprus is the lowest tax jurisdiction in the European Union and lowest non-offshore tax jurisdiction in the world. Universal corporate tax rate now at 12.5% for tax-resident companies (0% for shipping companies, 4.25% for maritime management companies). Other tax benefits are available, including overseas profits, dividends exemption, capital gains and gains on shares exemption, no withholding tax, and exemption in interests.
Global taxation agreements in Cyprus Extensive double tax treaties, with over 50 and a further 40 being negotiated. The Cyprus Securities and Exchange Commission has also signed a multilateral Memorandum of Understanding with the regulatory authorities of the European Community Member States through the Committee of the European Securities Regulators, and almost 20 Bilateral MoUs with other countries.
Accounting Requirements Certified audits are required each year.
Time to form a Cyprus company Normally 5-8 days
Ready-made shelf company availability Yes. Vintage shelf companies are also available.
Paid Up Capital Requirement €1,700, however only €1 to be paid on incorporation.
Source: Investment-Gateway.eu

Obtain a quick quote to form a Cyprus Company from a variety of leading agents in the market. Complete the quick-and-easy Investment Gateway company formation quotation form.

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Types of Cyprus Company Formations

All company formations in Cyprus are all now technically considered onshore, labelled as an International Business Company (IBC) or simply as a Cyprus Company. This makes Cyprus an ideal jurisdiction to set up a company investment form you 'home country' of operations, as it still offers taxation efficiency, but also greater credibility, double tax treaties and in turn a gateway for investment strategies to the EMEA region.

A 100% foreign owned and operated company in Cyprus used to be referred to as an 'offshore company'. However in 2003, just prior to Cyprus' EU accession, an investment (non-resident) company no longer had separate taxation status, but taxed according to the same principles as a regular resident company in Cyprus, whilst also being allowed to trade inside the Cyprus market. Hence, it became a full fledge onshore company. The term International Business Company (IBC) came into favour; otherwise known as a Cyprus International Company, or simply a Cyprus Company.

In many ways, an IBC is still the label given to a company held by non Cyprus residents (100% foreign owned) with business activities predominantly outside Cyprus – hence internationally. These are most commonly private limited company, limited by shares. They can take the form of Holding Companies, Finance Companies, Royalty, Investment Funds and Trading Companies, among other.

Although there is no exact legal definition of an International Business or Holding Company in Cyprus, therefore are no restrictions activities, it is regulated by Cypriot Company Law.
The relevant legislation relating to the possible types of companies in Cyprus is Cyprus Companies Law, Cap. 113. This legal structure is more or less based on the 1948 Companies Act, UK, hence why Cyprus is ideal for both British and other commonwealth companies.

Some key amendments in Cyprus company law include:
  • Companies (Amendment) Law 2000 (Law 2(I)/2000) introduced single-member companies in Cyprus.
  • Companies (Amendment) (No. 3) Law 2000 (151(I)/2000) introduced new provisions as to the validity of transactions of Cypriot companies and as to the information which must be included in the official documents of companies.
  • Companies (Amendment) Law of 2001, Law 76(I) 2001 created a new system for the certification of Cypriot companies' accountants/auditors and for the recognition of bodies of auditors and the grant of approval to auditors with international qualifications and the recognition of accountants' companies by the Council of Ministers.
For more information about legalities and how they relate to your specific situation, contact Investment Gateway and be put into contact with a associate.
Trading income is taxed locally in Cyprus, whilst investment income is completely tax free. Forming a Cyprus company requires €1,000 in share capital, but only €1 has to be paid on incorporation. Such incorporation offers limited financial liability, tax efficiency & advantages, ownership and control, as well as business security. Being based in Cyprus also offers excellent potential for investments and growth to the EMEA region.

A limited company is a company in which liability is limited to what has been invested or guaranteed to the company. Limited companies may be limited by shares or by guarantee. A limited company (by shares), may be further divided into public companies and private companies.

Types of legal entities possible in Cyprus:
  • Private Limited Company: requires one or more founding members, limited to 50 shareholders, cannot offer company shares to the general public, and is restricted from transferring company shares. Liability in this type of company is limited by shares.
  • Private Limited Company by guarantee: In this case, members' liability is limited, on winding up, to the extent agreed upon. This type of Company is usually adopted when its purpose is non-profit making.
  • Public Limited Company: the general public is able to subscribe to company shares, whilst there must be a minimum of seven members. Company members' (shareholders') liability is limited to the nominal value of the shares subscribed by them.
The various types of international companies that can be formed in Cyprus include:
  • Cyprus Public Limited Company
  • Cyprus Exempt Private Company
  • Cyprus Public Company Limited by Shares
  • Cyprus Company Limited by Guarantee
  • Cyprus Branch of Overseas Company
  • Cyprus General Partnership
  • Cyprus Limited Partnership
  • Cyprus Sole Proprietorship
  • Cyprus Trust Funds
  • Ship Owning – Ship Management Companies
  • UK Agency Company in Cyprus
  • Cyprus Holding and Investment Companies
  • Cyprus Asset Holding Company
  • Cyprus Operational Trading Holding
  • Cyprus Management Holding Companies
  • Cyrus Banking and Finance Companies
  • Cyprus Insurance Companies
  • Cyprus Consulting Companies
  • Cyprus Property-Owning Companies
  • Cyprus Intellectual Property Companies
  • Cyprus Trading and Re-Invoicing Companies
  • Cyprus Employment Companies

As you can see, there are numerous international company formations available in Cyprus, each made to cater for its particular sector.

Find out which company structure in Cyprus best suits your particular situation and which will offer you an optimal solution for taxation efficiency and global investment strategies. Complete the quick-and-easy Investment Gateway company formation quotation form and let an expert agent formulate the best solution.

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Key Benefits to Registering a Cyprus Company

A Cyprus company is a credible and globally recognised EU company

Incorporating a company formation in Cyprus is fast becoming one of the world's most popular options for creating an international company in a credible financial centre abroad or in other words offshore/abroad from your home country. Such company formations offer great potential for investment, expansion and growth, particularly to the EU and EMEA region, as well as benefits for tax planning efficiency, wealth management and international banking. Remember, Cyprus is not a tax haven and is not considered to be an investment jurisdiction, but rather a gateway to credible investments and tax planning strategies. Cyprus company formations are considered as onshore, enjoying the same benefits (such as in legal structure and taxation) as normal resident companies in Cyprus. They also enjoy interrelated benefits with other European Union companies and markets, i.e. a Cyprus company is also an EU company.

As an EU and Eurozone jurisdiction that is also on the OECD's white list of territories which have substantially implemented the internationally agreed standard in tax transparency, a Cyprus based company enjoys excellent global credibility and recognition. Indeed, Cyprus is a well established international financial centre that has been critically assessed as constituting an attractive location for forming companies, both from a tax and investment perspective, among others. Following the enactment of the new Cyprus tax legislation, Cyprus tax became fully compatible with the acquis communautaire. Cyprus laws and practices are now harmonised with the EU Laws and Directives, the Code of Conduct and the Organisation for Economic Cooperation and Development's recommendation on Harmful Tax Corporation.

This new standard has helped Cyprus conclude tax treaties with over 50 countries worldwide, and is now currently negotiating a further 40. Meanwhile, the accession of Cyprus in the EU, double taxation relief became available to all Cyprus branches, of companies resident in other member states in the European Union, since there is no discrimination between the companies' resident in a Member state and the branches of such companies' residence in another member state.

Cyprus has the lowest corporate taxation rate in the European Union and is the lowest non-offshore tax jurisdiction in the world. It has excellent infrastructure to maintain such professional services, and proposes an ideal location for investment strategies and growth, particularly to the EMEA region – EU, Europe, Russia and CIS, Middle East and Africa. Unlike other countries in Europe, a Cyprus company must only hold a minimum 1% of the share capital of a foreign subsidiary in order to receive the tax benefits awarded by the new tax reform.

Clear-cut benefits to forming a Cyprus company include:
  • Credibility: A Cyprus company is an onshore European Union company and regarded by the OECD.
  • Lowest tax rate: Corporate tax rate of 12.5%, making it still the lowest corporate tax rate in the EU and Eurozone, and the lowest non-offshore tax jurisdiction in the world.
  • Double tax treaties: Favourable double-taxation agreements with over 50 key countries and a further 40 currently being negotiated, among other international treaties and bilateral agreements with other countries.
  • Personal privacy: A certain level of company anonymity is possible in Cyprus via nominee services – directors, shareholders and secretary; confidential shareholding possible.
  • Simple procedure: Relatively quick and easy company registration process, taking 5-8 days.
  • Faster company registration: Availability of Cyprus shelf companies, as well as Cyprus vintage shelf companies.
  • Distributions by Cyprus companies: Dividends paid to non-resident shareholders are exempt from withholding tax. In fact, Cyprus does not impose withholding taxes on payments of dividend, interest and royalties (provided the intellectual property rights are not used in Cyprus) to non-resident recipients.
  • Carry forward company losses: Tax losses for the year 2000 onwards may be carried forward indefinitely. Losses incurred abroad by a permanent establishment of a Cyprus company can be offset against profits of the Cyprus Company.
  • Group tax relief benefits: Group relief rules are now enacted in Cyprus, providing for group relief of tax losses between a Holding Company and its subsidiaries in the event where the Holding Company owns at least 75% of the Subsidiary directly or indirectly and/or otherwise among companies of the same group for the whole year. However, losses brought forward will not be available for Group Relief. By virtue of the said rules a company is considered as a member of a group if it is at least a 75% subsidiary of the other, or both companies are at least the 75% subsidiaries of a third company.

Learn more about what makes Cyprus such an ideal jurisdiction for creating a number of different types of companies offshore/abroad, including the country's general business environment, macro economy, key economic sectors and growth potential, location, geopolitical situation, taxation system, banking sector, infrastructure in professional services, as well as a benchmark to compare with other well known jurisdiction around the world.

Cyprus Globality

Obtain a quick quote to form a Cyprus Company from a variety of leading agents in the market. Complete the quick-and-easy Investment Gateway company formation quotation form.

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SWOT Analysis: Cyprus Company Formations and Business Activities

Strengths Weaknesses
  • Cyprus has the lowest corporate tax rate in the European Union and is the lowest non-offshore jurisdiction in the world. It has a host of other tax benefits, as well as extensive double tax treaties.
  • Cyprus is a credible global financial centre, meeting all EU directives and listed on the OECD's white list of jurisdictions for international best practices.
  • Excellent infrastructure in professional services: well educated, multilingual and extensive experience – long history within the financial sector.
  • A Cyprus based company can be incorporated fast and very easily; even from abroad.
  • The professional services and company formation sector is vital to the Cypriot economy, making up the bulk of GDP. As such, the government is always pro foreign business and business friendly, constructing the entire industry to suit; and be globally competitive. Flexible regulations and a general government policy of non-intervention in business operations; business friendly government.
  • Always dealing with only one contact, taking care of all other areas involved in professional services, including legal, accounting-auditing-tax and administration duties.
  • Competitive in company formation price and on-going maintenance fees; also substantially lower operational costs than other comparable EU financial centres.
  • Certain level of anonymity via nominee services.
  • Ready-made shelf companies and vintage companies are available in Cyprus.
  • Stigma with the term 'offshore' and tax haven that might sometimes also linger around Cyprus. Cyprus formally had lower corporate tax and much more corporate tax benefits, including greater anonymity. This meant Cyprus had less credibility as a global jurisdiction.
  • Cyprus is still not so well known around the world as a location for financial services and investments. Greater awareness and country publicity is required, especially to the US, China and other Asian markets.
  • The on-going Cyprus problem (since 1974) has politically and geographically divided the nation, limiting trade relations with Turkey and the country's capacity for economic growth.
  • Generally, cost-of-living has increased much faster in Cyrus than other EU member countries.
  • Strong competition from other financial jurisdictions.
Opportunities Threats
  • Vast tax savings for companies and individuals alike. Cyprus is the lowest tax jurisdiction in the EU and lowest non-offshore jurisdiction in the world.
  • Due to its credible nature, geographical location, macro economic stability and pro-business government, Cyprus is an ideal platform for expansion and growth to EMEA region.
  • A Cyprus company is also an EU- and Eurozone-based entity, again acting as a solid based for business activities, trade, future asset management and investments, to the EU and the rest of Europe. Being an EU-based entity, a Cyprus company is also entitled to the benefits of the EU Parent-Subsidiary directive and EU Interest and Royalty directive, under circumstances providing for withholding tax exemption for interest, dividends and royalty payments made by companies in other EU-member states to a Cyprus company.
  • Vast natural gas reserves and possibly petroleum will significantly boost Cyprus' economy and position in global affairs. All companies based in Cyprus will also benefit from these developments, mainly from the country maintaining its advantageous company formation and tax structure (more than likely even bettering it), but also from additional opportunities for companies to generate revenue in Cyprus.
  • Limited personal liability with a Cyprus company.
  • Since EU accession more Europeans have been coming to Cyprus seeking professional work. Labour force has increased substantially, especially from Eastern European countries, Russia and CIS – multilingual possibilities.
  • Like many countries in the EU, national debt is at a worrying level. Drastic and conservative measures must be maintained.
  • A number of Cypriot banks will be somewhat affected by the Greek debt restructuring, owning Greek bonds.
  • Geopolitical tensions with close neighbour Turkey. Turkey actually proposes a very lucrative market for Cyprus, in terms of company formations, professional services and potential trade relations. Meanwhile, Cyprus is the key for Turkey's entry into the EU, or at least Turkey's bridge to better EU trade. Better relations between these two formally aligned countries should certainly benefit the Cyprus economy significantly.
  • Somewhat uncertainty with natural gas rights in the Eastern Mediterranean and how it will be divided among neighbouring countries. This could limit long term economic boom potential in Cyprus.
  • Since EU accession a growing number of Cypriots have moved abroad seeking professional work.
Source: Investment-Gateway.eu

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