How to set up a company in Cyprus?

Registering a company is a fast and straightforward procedure | Key steps of Setting up a Company in Cyprus with A Georgiou Law

Setting up Company

How to set up a company in Cyprus?

Cyprus is a popular destination for entrepreneurs and investors who want to establish or expand their business in the European Union. The country offers many advantages, such as a strategic location, a favorable tax regime, a skilled workforce, and a high quality of life. But how do you set up a company in Cyprus? What are the requirements and steps to follow? In this blog post, we will answer these questions and provide you with some useful tips and resources.

Choose a suitable corporate entity

The first step to set up a company in Cyprus is to choose a suitable corporate entity for your business. There are different types of legal entities available, such as:

  • Limited liability company (LTD): This is the most common and preferred type of company in Cyprus. It is a separate legal entity that can have one or more shareholders and directors. The shareholders’ liability is limited to the amount of their share capital. The minimum share capital required is €1,000.
  • Partnership: This is a business arrangement between two or more persons who share the profits and losses of the business. There are two types of partnerships in Cyprus: general and limited. In a general partnership, all partners have unlimited liability for the debts and obligations of the partnership. In a limited partnership, there is at least one general partner with unlimited liability and one or more limited partners with limited liability.
  • Branch: This is an extension of a foreign company that operates in Cyprus. It is not a separate legal entity, but a part of the parent company. The branch must register with the Registrar of Companies and comply with the same reporting and taxation obligations as a local company.
  • Representative office: This is a liaison office of a foreign company that does not engage in any commercial activities in Cyprus. It can only perform auxiliary or preparatory functions, such as market research, advertising, or public relations. The representative office does not need to register with the Registrar of Companies, but it must notify the Central Bank of Cyprus.

Depending on your business needs and goals, you can choose the most suitable corporate entity for your company. You can also consult with a professional lawyer or accountant to help you make the best decision.

Reserve a company name

The next step to set up a company in Cyprus is to reserve a company name with the Registrar of Companies. The name must be unique and not similar or identical to any existing company name in Cyprus or abroad. You can check the availability of your desired name online or by visiting the Registrar of Companies in person. 

Prepare and file the necessary legal documents

Once you have reserved your company name, you need to prepare and file the necessary legal documents with the Registrar of Companies. These documents include:

  • The Memorandum and Articles of Association: These are the constitutional documents of the company that define its name, objectives, share capital, shareholders, directors, and other relevant information. You can use a standard template or draft your own, but you must have them signed by the shareholders and notarized by a lawyer.
  • The HE1 form: This is the application form for the registration of the company. It must be completed and signed by a lawyer who acts as the representative of the company.
  • The HE2 form: This is the form that specifies the registered office address of the company. It must be completed and signed by the owner or the landlord of the premises where the company will be located.
  • The HE3 form: This is the form that declares the directors and secretary of the company. It must be completed and signed by the directors and the secretary themselves.

Open a corporate bank account

After you have registered your company, you need to open a corporate bank account in Cyprus. You can choose from a variety of local and international banks that operate in the country, such as Bank of Cyprus, Hellenic Bank, Eurobank, RCB Bank, etc. To open a bank account, you will need to provide the following documents:

  • The certificate of incorporation of the company
  • The memorandum and articles of association of the company
  • The passport or ID card of the shareholders, directors, and authorized signatories of the company
  • The proof of address of the shareholders, directors, and authorized signatories of the company
  • The reference letter from a bank or a professional (lawyer, accountant, etc.) for the shareholders, directors, and authorized signatories of the company
  • The business plan or the description of the activities of the company

The bank may also request additional documents or information, depending on the specific case. The bank account opening process may take from a few days to a few weeks, depending on the bank and the complexity of the case.

Comply with the financial reporting and taxation obligations

The last step to set up a company in Cyprus is to comply with the financial reporting and taxation obligations of the country. These include:

  • Obtaining a tax identification number (TIN) from the Tax Department
  • Registering for value-added tax (VAT) if the annual turnover of the company exceeds €15,600
  • Registering for social insurance and employer’s liability insurance for the employees of the company
  • Keeping proper accounting records and preparing annual financial statements in accordance with the International Financial Reporting Standards (IFRS)
  • Filing annual tax returns and paying corporate tax at the rate of 12.5 percent on the net profits of the company
  • Filing annual VAT returns and paying VAT at the standard rate of 19 percent on the taxable supplies of the company
  • Filing annual social insurance contributions and paying social insurance at the rate of 7.8 percent for the employer and 7.8 percent for the employee on the gross salary of the employee
  • Filing annual general meetings and annual returns with the Registrar of Companies

These obligations may seem complex and time-consuming, but you can always hire a professional accountant or auditor to help you with them. Alternatively, you can outsource your accounting and taxation functions to a reputable service provider, such as A Georgiou Law.

Conclusion

Setting up a company in Cyprus is not a difficult task, but it requires some planning and preparation. By following the steps outlined in this blog post, you can successfully establish your business in Cyprus and enjoy the benefits of operating in a dynamic and attractive environment. However, if you need any assistance or guidance along the way, you can always contact A Georgiou Law, a leading law firm in Cyprus that specializes in company formation, corporate law, tax law, and other related services. We have the expertise and experience to help you set up your company in Cyprus in the most efficient and cost-effective way.

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