Business in Cyprus
Cyprus is attracting international attention and is becoming an increasingly promising country for business, investment and living. The success of the island is due to progressive legislation, a regulatory regime and a strong network of financial and professional service providers. The Cypriot government and institutions are actively committed to maintaining leadership in the development of the industry, providing access to high-growth markets and supporting businesses in Cyprus.
Among the main reasons for the attractiveness of Cyprus for the development of entrepreneurship are the following:
- The performance of Cyprus as a distribution center and “gateway” for investments in the European Union, Eastern Europe, Asia and Africa
- Membership in the European Union and the European Monetary Union
- Enviable quality of life
- Highly educated, qualified and multilingual staff
- A wide range of excellent legal and accounting servicesг
- Cost effective business establishment and ongoing maintenance
- Favorable tax regime approved by the EU and OECD
- Access to a wide network of double tax treaties to effectively structure tax investments
- Efficient and modern regulation, fully harmonized with the relevant EU directives
- The possibility of placing collective investments on the Cyprus and other recognized EU stock exchanges
- Low tax burden levied on Cypriot corporations
- Incentives and tax breaks for highly paid managers and high net worth individuals
- Modern and efficient legal, accounting and banking services based on English practice
- Integrated road, air and sea transport solutions and services
- Developed telecommunications network and easy access by air and sea
Our services:
Company registration
Opening a bank account
Obtaining a VAT number
Obtaining a financial license
Cyprus Law Advice
Legal support of the company's activities
Accounting support
Tax advice
Cyprus Law Advice
Legal system of Cyprus
The Republic of Cyprus is a member of the Eurozone and the European Union. Until 1960, Cyprus was part of the British Empire and even today its own legal and judicial system is still very closely linked to the United Kingdom. Since then, Cyprus has developed into an independent, sovereign presidential republic with a written constitution that guarantees the rule of law, political stability and respect for human rights and private property. Cyprus corporate law is based on English company law and the legal system is based on English common law. The legislation of Cyprus, including labor law, is absolutely harmonized and in line with the legislation of the European Union. The EU Directives are incorporated into local legislation and the rules and standards are directly applicable in Cyprus.
Companies in Cyprus
Public Company Limited by Shares
Private Company Limited by Shares
Exempt Private Company
Societas Europaea
In accordance with the provisions of local law, there are two categories of companies that can be established in Cyprus:
- A company limited by shares - the liability of its members depends on the nominal value of the shares they hold..
- A company limited by guarantee - the liability of its members is determined by the amount of their contribution. This company does not have an authorized capital, therefore, funds are not transferred to the current account. The liability of the participants is limited to the amount established in the statutory documents. This amount will be a guarantee that the participants must contribute in the event of the termination of the company's activities. As a rule, this legal form is used for charitable and non-profit organizations. In addition, a Cypriot company can be private or public.
- A private company cannot issue invitations to the public to subscribe for its shares or debentures. The name must contain the ending "limited", "ltd" or "Ltd".
- A public company may offer its shares or debentures to the general public. The name must contain one of the following endings: "Public Company Limited", "Public Company Ltd", "Public Co. Ltd", "Plc", "Public Limited" or "Public Ltd".
Public Company Limited by Shares
PAO analogue.
Registration procedurePrivate Company Limited by Shares
PAO analogue.
Registration procedureExempt Private Company
It is essentially a private company limited by shares that is exempt from filing financial statements with the Registrar of Companies and is not restricted from making loans to its directors.
In practice, companies in this form are rarely established, since the tax service still recommends that enterprises submit audited financial statements. In addition, there are a number of restrictions for such a company, for example:
- No corporation other than another exempt company may own its shares or debentures.
- The number of debt holders must not exceed 50.
- The founder cannot be a director of the company.
Societas Europaea
The name must contain the ending 'SE'. This legal form applies to companies that operate or intend to operate in more than one Member State of the European Union.
Read more in our article. All companies in CyprusTransfer pricing rules in Cyprus
The current practice of the minimum interest rate allowed by the Cyprus tax authorities on loans between related companies is an annual interest rate of at least 0.35%.
Some text
The interest rate on financial transactions such as loans or similar instruments must be justified by transfer pricing studies prepared by independent experts based on the OECD transfer pricing guidelines.
The new rule will also apply to current financial agreements (loan agreements, etc.) concluded before the date of the change. According to the Cyprus tax authorities, the need to revise the minimum interest rate for financial transactions between related parties (involving a Cypriot company) arose in connection with the BEPS initiative and the Corporate Tax Code, as well as in line with the prospect of EU state aid.
CFC (CONTROLLED FOREIGN COMPANIES) regulations in Cyprus
Currently not applicable.
Taxation in CyprusInternational agreements of Cyprus in the tax field
Double tax treaties are signed by Cyprus with the following states:
- Azerbaijan
- Armenia
- Austria
- Bahrain
- Belarus
- Belgium
- Bulgaria
- Great Britain
- Hungary
- Greece
- Georgia
- Denmark
- Egypt
- Iceland
- Canada
- China
- Estonia
- Ethiopia
- Germany
- Finland
- France
- Iran
- India
- Ireland
- Italy
- Qatar
- Kuwait
- Kyrgyzstan
- Latvia
- Lebanon
- Lithuania
- Malta
- Mauritius
- Moldova
- Norway
- UAE
- Poland
- Portugal
- Romania
- Russia
- San Marino
- Serbia and Montenegro
- Seychelles
- Singapore
- Syria
- Slovakia
- Slovenia
- United States
- Tajikistan
- Thailand
- Ukraine
- Uzbekistan
- Czech Republic
- Sweden
- Yugoslavia
- South Africa
Cyprus has signed agreements on the automatic exchange of financial information on tax matters with the following jurisdictions:
- Andorra
- Argentina
- Australia
- Austria
- Belgium
- Fr. Bonaire, Saint Eustathius and Saba
- Bulgaria
- Hungary
- Germany
- Bailiwick of Guernsey
- Gibraltar
- Greece
- Denmark
- Jersey
- India
- Iceland
- Spain
- Italy
- Ireland
- Colombia
- Korea
- Latvia
- Liechtenstein
- Lithuania
- Luxembourg
- Malta
- Mauritius
- Mexico
- O. Maine
- Monaco
- Netherlands
- Norway
- Poland
- Portugal
- Romania
- San Marino
- Seychelles
- The Slovak Republic
- Slovenia
- United Kingdom
- Faro Islands
- Finland
- France
- Croatia
- Czech Republic
- Switzerland
- Sweden
- Estonia
- South Africa
