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Company Formation in Cyprus

Company Formation in Cyprus

The most preferred form of business vehicle in Cyprus is the private limited company. Company registration in Cyprus is a straightforward process administered by the Registrar of Companies. In order to incorporate a company in Cyprus, connect with Enterslice to know the proper procedure:

Package inclusions:
  • Company Registration with the Registrar of Companies
  • Documentation Support
  • Business Plan
  • Appointment of company secretary and registered business address
  • Assistance in obtaining the certificate of Incorporation
  • Assistance in obtaining the certificate of commencement of business
  • Opening of a Corporate Bank Account
  • End to End support
  • Advisory Services
Company Formation in Cyprus

Company Registration in Cyprus - An Overview

Cyprus is an island nation which is located in the Mediterranean Sea. There are prominent investment opportunities in the country that attract different investors. There are different types of businesses that can be established in Cyprus. It is quite a straightforward process to incorporate a company in Cyprus, as the government offers different forms of incentives and support options.

For an investor, the process of company incorporation in Cyprus is less expensive. Out of all the countries in the Mediterranean region, incorporating a company in Cyprus is quite straightforward. Cyprus has been recognised by the OECD for effectively tackling tax evasion and money laundering activities.

The shareholders and directors of a company in Cyprus can be of any nationality. Hence, there is no requirement for the company to appoint shareholders and directors who are Cyprian nationals. Cyprus has different forms of Double Taxation Agreements (DTAAs) with countries such as the UK, the USA, India and China. Hence, an investor would not be taxed twice while carrying out the formalities related to company registration.

Cyprus is a part of the European Union (EU); hence it enjoys the four freedoms, which include the transfer of goods, services, capital and people. Hence an investor going through the process of company incorporation in Cyprus would get all these benefits. Cyprus is considered a free economy when it comes to foreign investment opportunities in the country. This boost’s the amount of economic activity throughout Cyprus.

Regulatory Authority for Company Registration in Cyprus

Registration of companies in Cyprus is regulated by the office of The Registrar of Companies according to the Companies Law (Cap. 113).

Benefits of Company Registration in Cyprus

Following are the benefits of registering a company in Cyprus:

  • Ease of Doing Business

Doing business in Cyprus is a straightforward and inexpensive process. Adequate government support is offered to companies incorporated in Cyprus. The minimum capital which is required for private limited company registration in Cyprus is EUR 1. This would be applicable to an LLC which is incorporated in Cyprus.

  • Transparency

For tax treatment purposes, Cyprus has been listed as a ‘White’ category country by the OECD in tackling money laundering and tax evasion. Hence, all businesses formed in Cyprus would comply with the requirements of tax law.

  • Double taxation avoidance agreements

Cyprus has signed multiple Double Taxation Avoidance Agreements (DTAAs) with countries such as the UK, the USA, India and China. Hence, an investor would not be taxed twice while carrying out the formalities related to the registration of the company.

  • Low Operating Costs

It is not costly to run a company in Cyprus. The corporate tax is levied at the rate of 12.5%. This would be the tax applicable on the income accrued and generated in case the company is operating from Cyprus. There are no taxes charged on the worldwide income for foreign registered entities. Investors can also benefit from this. In terms of leased-out spaces, offices are cheaper compared to other countries in the EU.

  • Tariff Free Economy

As Cyprus is a part of the EU, it gets access to the four freedoms in the EU i.e. movement of goods, movement of capital, movement of people and freedom to establish and provide services across Europe. Apart from this, it is also exempted from tariffs in the EU.

  • Proper Regulatory Structure

All forms of investment in this country are protected by regulatory measures. There are no restrictions with respect to the repatriation of investment back to the home country. Apart from this, foreign trade and investment activities are thriving in Cyprus.

Types of Companies for doing business in Cyprus  

There are 5 different types of companies which a foreign investor can choose from depending on the kind of business activities undertaken by the company. It must be remembered that each of these types of companies has special characteristics and serves specific economic objects:

  • Private limited liability company by shares-

A private limited liability company by shares has a share capital, and the liability of the members of the company is limited to any unpaid amount in relation to the shares held by them. The amount has been mentioned in the memorandum of association.

A private limited company must have at least one shareholder and not more than 50, exclusive of any persons who are or formerly have been in the employment of the company and/or still continue to be in the employment of the company.

These companies are not permitted to offer their shares for subscription to the general public. This is the most preferred form of business entity.   

  • Public limited liability company by shares -

A public limited liability company by shares has a share capital, and the liability of the members of the company is limited to any unpaid amount in relation to the shares held by them. The amount has been mentioned in the memorandum of association.

These companies are permitted to invite the public to subscribe to their shares and can get them listed on the stock exchange. The minimum number of members of these companies should be 7.

The minimum authorised and issued share capital for the registration of a public limited company, which is offered for subscription by the general public must not be less than twenty-five thousand, six hundred and twenty-nine euros.

  • Limited liability company by guarantee without share capital -

A Limited liability company by guarantee without share capital, as the name suggests, does not have a share capital, and its members are the guarantors instead of shareholders. Their liability is limited to the amount specified in the memorandum of association, up to the amount the members have undertaken to contribute to the assets of the company in case the company dissolves.

  • Limited liability company by guarantee with a share capital -

A Limited liability company by guarantee with a share capital, as the name suggests, does have a share capital, and the liability of its shareholders is limited to the amount specified in the memorandum of association, on the one hand, up to the amount unpaid by its members with respect to the shares held by them and on the other hand, up to the amount that its members have undertaken to contribute to the assets of the company. If this company is registered as a public company, then it can invite the general public to subscribe for its shares.

  • Variable Capital Investment Company (VCIC) -

These companies are essentially limited liability companies by shares. The major characteristic of these companies is that according to their Memorandum of Associations and their internal rules governing their operations, their shares do not have a nominal value. Instead, they have a variable value. These companies can only be registered if they receive a license from the Cyprus Securities and Exchange Commission to operate as Collective Investment Schemes.

A Variable Capital Investment Company can take the form of either a public or private company depending on the type of Collective Investment Fund that such VCIC will take, such as UCITS, AIF, RAIF or AIFLNP. The number of members a private company can have, ranges from 1- 50, while the minimum number of members of a public company must be at least 1. 

Following is the list of minimum share capital that every VCIC must have:

Type of VCIC

Minimum share capital

Undertaking for Collective Investment in Transferable Securities (UCITS)

Externally charged VCIC - €200.000 for each investment segment

Alternative Investment Fund (AIF)

Internally charged VCIC - €125.000 for each investment segment

Registered Alternative Investment Fund (RAIF)

No minimum capital required

Alternative Investment Fund with Limited Number of Persons (AIFLNP)

Internally charged VCIC - €50.000 for each investment segment

Steps to be taken before company formation in Cyprus

In order to incorporate a company with the Registrar of Companies in Cyprus, a number of requirements have to be met by the promoters of the company before and after the incorporation of the company, which are as follows:

  1. Decide the type of company

The promoters must decide among the five categories of companies that have been mentioned above and choose the appropriate company based on the kind of commercial activities they wish to undertake in Cyprus and also based on the economic features of the company.

  1. Decide the name of the company

One of the prerequisites for the registration of a company in Cyrus is deciding on an appropriate name for the company which meets the criteria laid down by the Registrar of Companies and, thereafter, obtaining the approval of the name from the Registrar’s Office.

There are certain restrictions on the types of names that must be taken into consideration while deciding the name for your company in Cyprus. The name of the company should:

  • Not be similar to the names of the registered organisations that have been registered with the Registrar of Companies;
  • Not be similar to the registered trademarks without obtaining the relevant consent;
  • Not be misleading and undesirable
  • Not include restrictive words and phrases without obtaining proper consent from the competent government authorities or authorised body;

The company is also required to publish the name of the company in the following manner:

  • The name should be written or affixed on the outside of every office or the place where the business is carried on, conspicuously in letters that are legible;
  • The name should be painted or engraved in legible characters on the business letters, company’s seal, official publications, receipts, invoices etc.;
  • The name of the company should also be visible on its website.
  1. Finalise the address of the registered office

To form a company in Cyprus, there is a mandatory requirement for a registered office in the Republic of Cyprus which should not be a mailbox. The registered office of a company is a place where all the notices and notifications from the government agencies, such as the Registrar of Companies, are sent to the company. A registered office is also a place where the company’s registers and other documents related to the company are maintained.

The promoters have to submit a notification of the company’s registered office address in Form HE2, together with the submission of the application for the incorporation of the company. The address of the registered office of every company is published in the electronic register of the Registrar of Companies. To change the registered office of the company, Form HE2 has to be submitted within a period of 14 days from the date of such change.

  1. Decide the Directors and the Secretary

In the case of a private company in Cyprus, there should be at least one director in the company, and in the case of a public company, the minimum number of directors should be two. The directors in both companies should be above 18 years of age.

Both types of companies should have at least one company secretary who must be above 18 years of age. In the case of a private company with one director and one member, the director can act as the secretary of the company.

The information about the first directors and secretaries of the company should be notified to the Registrar of Companies by submitting the form HE3, together with the application for the incorporation of the company. Following the incorporation of the company, if any changes need to be introduced in the directors and secretaries of a company, Form HE4 has to be submitted to notify the Registrar of Companies.

  1. Decide upon the members and the amount of share capital

The most preferred form of business entity is a limited liability company which can be both private and public. A private limited company should have at least one member and a maximum of 50 members. On the other hand, a public limited company should have a minimum of 7 members, and there is no upper limit on the number of members.

In the case of a Variable Capital Investment Company (VCIC), it is essentially a private company; there should be a minimum of one member and a maximum of 50 members. However, if a VCIC is a public company, then there must be at least one member.

Every company’s memorandum of association must state the amount of nominal capital that it intends to register. There is no requirement for maintianing a minimum share capital in the case of private limited companies. However, there is a minimum amount of nominal and issued share capital in the case of public limited companies to be offered for a subscription which is €25,629 (twenty-five thousand, six hundred and twenty-nine Euros).

Type of VCIC

Minimum initial capital

Undertaking for Collective Investment in Transferable Securities (UCITS)

a.     Internally managed VCIC- €300,000 for each investment segment.

b.     Externally managed VCIC- €200,000 for each investment segment

Alternative Investment Fund (AIF)

Internally managed VCIC - €200,000 for each investment segment

Alternative Investment Fund with Limited Number of Persons (AIFLNP)

Internally managed VCIC - €50,000 for each investment segment

Registered Alternative Investment Fund (RAIF)

No minimum initial capital is required

The information about the share capital of the company and its first shareholder has to be notified to the Registrar of Companies together with the Memorandum of Association of the company. After the registration of a company in Cyprus, with the exception of VCICs, any changes made regarding the shareholders of a private company are supposed to be notified by submission of the form HE57, and changes in the share capital of the company have to be notified by submission of forms HE12, HE14 or HE16.

  1. Decide the objects of the company

The objects of the company decide the nature of the business the company intends to carry out in Cyprus. Some of the objects that are prohibited in Cyprus include the following:

  • Objects that are contradictory to the law in force in the Republic of Cyprus; and
  • Objects that fall within the ambit of other legislation other than the Companies Law. For example, Union registrations.

However, there are certain kinds of objects for which permissions, consent or pre-approvals have to be sought from the respective regulating authorities of Cyprus. For example, for the operation of a casino in Cyprus, permission has to be sought from the Ministry of Energy, Commerce and Industry, and for the operation of Payment services, permission has to be sought from the Central Bank of Cyprus. 

  1. Finalise the Memorandum of Association and Articles of Association of the company

The memorandum of association is the document which contains the objects of the company and confirms the commitment of its members for its incorporation. If a company is not set up for specific objects, it can be registered as a commercial company of general objects where the company is engaged in general commercial activities that do not require special licenses and permissions from the government authorities.

A Memorandum of Association of a Company should consist of the following details about the company:

  • Name of the company;
  • Objectives of the company;
  • A statement that the liability of its members is limited;
  • The amount of share capital with which the company wants to register and the division of its shares; and
  • The names and signatures of the persons who set up the company and the number of shares received by each of them.

The memorandum has to be signed by a witness who confirms the signatures of the persons who set up the company and the lawyer who prepared the memorandum of association.

The articles of association of a company lay down the rules for internal governance of the company. In case the promoters want to secure a certified copy of the memorandum and articles of association in a foreign language, the promoters need to create a file of translations of the company with the Registrar, providing a certified translation of the aforementioned document in the foreign language.

Both the documents of the Memorandum and Articles of Association are required to be submitted to the Registrar of Companies at the same time when the submission of the application for the incorporation of the company takes place.   

Procedure for Company formation in Cyprus   

Once all the pre-incorporation procedures have been undertaken, the following steps need to be taken to form a company in Cyprus:

  • Choosing a name for the Company

Before proceeding with the formation of the company in Cyprus, the first step that must be undertaken by the promoters is to decide upon the proposed name of the company and get it approved by the Registrar of Companies.

Once you decide on the name of the company, you must conduct an online search on the business entities’ register available on the website of the Registrar of Companies in order to determine whether a registered company exists with a similar or same name or not. The company is also required to attach the words “ltd./Limited” or “public limited” or “private limited” as their last word indicating the type of company.

In order to obtain approval from the Registrar of Companies, the name should not be misleading or undesirable. In case the name is similar to an existing name, you must attach a letter of consent from the existing company allowing you to use the said name.

After the submission of the application for the approval of the proposed name, the Registrar will carry out the name search, which will not be limited to the Cypriot businesses alone. If the proposed name contains restrictive words or expressions, then consent from the relevant government authority has to be obtained.

The application for the name approval/ change of name can be made via e-filing services, by hand or by post, together with the necessary permissions sought from the relevant regulatory authority (if required). The applicant is required to pay a fee of €10 for every proposed name. If the applicant wants to accelerate the name approval process, the applicant can pay an additional fee of €20 for every proposed name.

The results of the name approval are made available via e-services. After obtaining the name approval, the application for the incorporation of the company must be submitted within 6 months, during which the approved name is reserved in favour of the applicant.

  • Filing the application for the registration of a company

After obtaining the approval of the name from the Registrar and provided the relevant decisions have been taken regarding the establishment of the company, the applicant can proceed towards filing the application for company’s formation in Cyprus either via e-filing or by post/by hand.

  • Online Company Registration

Irrespective of the fact which type of company you have chosen, the request for company formation can be made online through the Registrar of Companies e-filing system accompanied by the following:

  1. A statutory declaration in form HE1 signed and sworn by the entrusted lawyer before the court of law;
  2. Memorandum and Articles of Association of the company in accordance with the type of company, signed in Greek Language;
  3. A solemn declaration of the witness of signatures;
  4. A certified translation of memorandum and articles of association other than Greek either by an affidavit or by a sworn translator of the Republic of Cyprus, in case you wish to create file translations for obtaining certified copies of memorandum and articles of association in a foreign language;
  5. Prior permission, approval or consent from the appropriate government/ regulatory authorities where it is necessary for the use of words or phrases and/or due to the nature of business respectively; and
  6. An amount of one hundred and sixty-five Euros (€165) or the amount of two hundred and thirty-five Euros (€235) in the case of companies without a share capital, payable by credit card.

If the applicant wants to accelerate the company registration process, an additional fee of one hundred Euros (€100) has to be deposited. In case a translation file is created, an additional fee of one hundred and sixty Euros (€160) has to be paid. For the incorporation of a public company, Form HE5 has to be submitted, along with the payment of (€20).

  • Registration by post/hand

An alternative to e-registration of a company in Cyprus is filing the application for incorporation of a company by post/ hand by submitting the following documents:

  1. A statutory declaration in Form HE1 signed and sworn by an entrusted lawyer before the court;
  2. Notification of the company’s registered address;
  3. Notification in relation to the information of the company’s first directors and secretary in Form HE3;
  4. Memorandum and Articles of Association of the company in accordance with the type of company, signed in the Greek language;
  5. A certified translation of memorandum and articles of association other than Greek, either by an affidavit or by a sworn translator of the Republic of Cyprus, in case you wish to create file translations for obtaining certified copies of memorandum and articles of association in a foreign language;
  6. Prior permission, approval or consent from the appropriate government/ regulatory authorities where it is necessary for the use of words or phrases and/or due to the nature of business respectively; and
  7. An amount of one hundred and sixty-five Euros (€165) and an additional amount of one hundred Euros (€100) in case the company wants an accelerated procedure. The payment can be made via cash/ cheque, through an account maintained with the Registrar of Companies or through bank transfer.

For the incorporation of a public company, Form HE5 has to be submitted, along with the payment of (€20).

  • Issuing of Certificate of Incorporation

If the Registrar is satisfied with all the relevant legal requirements for the registration of the company, then it will proceed further with the publication of the company’s registration in the Official Gazette and issue the Certificate of Incorporation. This certificate is undisputable evidence that all the legal requirements of the company regarding its registration have been complied with.

On payment of an amount of (€120) together with a certified copy of the memorandum and articles of association or a sum of (€130), if no copy of these documents is attached, the following certificates/certified copies of the company are issued:

  1. Certificates of Directors and Secretary;
  2. Certificates of shareholders;
  3. Certificate of the Registered Office Address;
  4. Certified copy of the Company’s Memorandum and Articles of Association; and
  5. Certified copy of the Certificate of Incorporation.

The accelerated process can be adopted for the above-chosen certificates/ certified copies on payment of an additional fee of €100.

  • Obtaining the Certificate of Commencement of Business -  

Even after receiving the Certificate of Incorporation, a Public company cannot start its commercial transactions or take loans and other related obligations unless it has obtained a certificate of commencement of business. To obtain a certificate of commencement of business, a company has to submit a Form HE9 along with the fee of €2020 and an additional fee of €20 for accelerating the procedure.

After obtaining the Certificate of Commencement of Business, the company is obliged to prepare and submit a statutory report signed by at least two directors and certified by an auditor.

Corporate Tax rate in Thailand 

All the companies that are tax residents in Cyprus are subject to corporate income tax on worldwide income at the standard rate of 12.5% on their income derived or accrued from all sources in Cyprus and abroad. A non-resident company that has been incorporated outside Cyprus shall be taxed on the income accrued or derived from the business activity carried out by its permanent establishment in Cyprus and on any other income arising from sources in Cyprus.  

Frequently Asked Questions

The Registrar of Companies is the statutory authority that is entrusted with the responsibility of registration of a company in Cyprus.

A private limited company in Cyprus must have at least one member and cannot have more than 50 members in the company. A public limited company needs to have at least 7 members, and there is no limit on the maximum number of members. In the case of a variable capital investment company (VCIC), being a private company essentially, there should be at least one and a maximum of 50 members. However, in case a VCIC is a public company, it must have at least one member.

To change the name of the company in Cyprus, such changes must be submitted to the Registrar of the Companies to obtain its approval. Only after the approval has been granted by the Registrar, can the company in Cyprus change the name of the company.

Every private company registered in Cyprus must have at least one director, and every public company should have a minimum of two directors. All the directors should be above the age of 18 years. Additionally, every company is supposed to have at least one secretary who must be above the age of 18 years. A private company having one director and one member, the responsibilities of a secretary can be taken up by the single director of the company.

For private limited companies, there is no minimum amount required for a nominal share capital. However, every public company registered in Cyprus has to offer for subscription a minimal nominal and issued share capital to the tune of €25,629 (twenty-five thousand, six hundred and twenty-nine Euros).

The applicable fee for company’s name search is €10 per name, and for accelerated search results, the fee is €20 per name.

The name of the company is reserved for a period of 6 months from the date of the approval of the name application. During this period of reservation, the application for the registration of the company in Cyprus has to be submitted, failing which the reservation will lapse.

The applicable fee for the registration of a company in Cyprus is €165 or €235 in the case of companies without a share capital, payable by credit card. If the applicant wants to accelerate the company registration process, an additional fee of €100 has to be deposited. In case a translation file is created, an additional fee of €160 has to be paid. For the incorporation of a public company, Form HE5 has to be submitted, along with the payment of €20.

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