Company Formation in Cyprus

1. EU Membership: As a member state of the European Union, Cyprus offers stability, access to a large market, and adherence to EU standards.

2. Modern Tax Regime: Cyprus boasts a modern tax regime, which is compliant with EU regulations, providing a secure and transparent business environment.

3. Low Corporate Tax Rate: Cyprus offers a highly competitive corporate tax rate of 12.5%, one of the lowest in Europe.

4. Dividend Income Exemption: Dividend income is exempt from corporation tax, making it attractive for holding companies.

5. Low Effective Tax on Royalty Income: Cyprus companies enjoy an effective tax rate of 2.5% on royalty income.

6. No Capital Gains Tax on Securities: Profits from the sale of securities are exempt from capital gains tax in Cyprus*.

7. No Withholding Tax: Cyprus does not impose withholding taxes on dividend, interest, and royalty payments made to non-residents.

8. Attractive IP Rights Taxation: Only 20% of profits generated from IP rights (royalties) are subject to tax in Cyprus.

9. Wide Treaty Network and EU Directives: Cyprus has an extensive network of double tax treaties and access to EU Directives, providing tax planning opportunities and reduced tax burdens.

10. Business-friendly Restructuring Legislation: Cyprus’ restructuring legislation aligns with the EU Merger Directive and extends to companies in non-EU countries.

11. VAT Registration Benefits: Registering for VAT in Cyprus can provide additional commercial value and monetary benefits.

12. International Business Centre: Cyprus offers efficient legal, accounting, and banking services, making it an attractive location for international businesses.

13. Advanced Telecommunications and Infrastructure: The country’s robust telecommunications network and infrastructure support seamless business operations.

Cyprus offers a diverse range of company structures to cater to different business needs, including:

1. Limited Liability Company (LLC): An LLC limits shareholders’ liability to the amount of capital they have invested. Private companies in Cyprus do not have minimum share capital requirements, and a limited company can operate as a single-member entity.

2. Public Limited Company (PLC): A PLC is typically established to facilitate listing on a regulated market. In Cyprus, a PLC must have a minimum share capital of EUR 25,629, which needs to be fully paid up before the company commences its business activities or exercises borrowing powers.

3. Branch Office: Foreign companies can set up branch offices in Cyprus to conduct business in the country. A branch office must be registered with the Registrar of Companies and is subject to the same legal and regulatory requirements as a local company.

4. Representative Office: Foreign companies can also open representative offices in Cyprus for promotional and marketing purposes. A representative office is not considered a separate legal entity and, therefore, is not subject to the same legal and regulatory requirements as a local company.

5. Subsidiary: Foreign companies can create subsidiaries in Cyprus, which are distinct legal entities from their parent companies. Subsidiaries in Cyprus must be incorporated as either an LLC or a PLC and are subject to the same legal and regulatory requirements as local companies.

These various types of business structures available in Cyprus allow for flexibility and adaptability, ensuring that companies can choose the most suitable option for their specific needs and objectives.

Choose Chambers & Co for a smooth and hassle-free Cyprus company formation experience, allowing you to focus on growing your business and taking advantage of the many benefits that Cyprus has to offer. Contact us today to start your Cyprus company formation journey.