Offshore Company Formation Cyprus

Cyprus, located in the Eastern Mediterranean, is an island conveniently situated between 3 major continents; Europe, Asia, and Africa. The current population of Cyprus is around 850000 with most of them living in the 4 main towns; the capital of Nicosia, Limassol, Larnaca, and Paphos.

Being a former British Colony, it made sense that English is the official language and the language is widely spoken throughout the country. 80% of the Cyprus citizens are fluent in English and the legal system adopts the English Law. Furthermore, many Cyprus lawyers are professionally trained in the United Kingdom. The English law and the solid legal system allows Cyprus to have a free market economy and to provide limitless opportunities to international businesses and to plan taxes efficiently. Therefore, these factors made Cyprus an excellent country to form an offshore company in.

Cyprus is also one of the leaders in international tax planning jurisdictions which makes forming an offshore company in Cyprus an ideal way of protecting a business. In addition, Cyprus has rapidly gained a reputation among the European Union as a reliable, legitimate jurisdiction that offers one of the lowest taxes in Europe while having more than 40 double tax treaties to assist businesses in international tax planning.

 

Advantages of Forming an Offshore Company

The advantages of setting up an offshore company in Cyprus are as the following:

 

  • Cyprus is a full member of the European Union
  • Cyprus has one of the lowest corporate income tax within the entire European Union with rates starting from as low as 12.5%
  • Double taxation with more than 40 over countries
  • Incoming dividends are not taxable
  • Payments to non-reside shareholders, creditors, and licensors are not taxable
  • Capital gains through disposal of shares or property located outside of Cyprus are not taxable but properties within Cyprus will be taxable
  • It is possible to establish Trusts for purposes like inheritance, wealth protection, financial planning, unanimity, and other purposes
  • Offshore companies incorporated in Cyprus can register for the European Union Value Added Tax
  • Simple and fast incorporation process that usually only take between 7 to 14 business days
  • Unlike other countries, the opening of corporate bank account is simple, direct, and the company director need not be physically present during the opening of the account
  • Cyprus follows International Financial Reporting Standards (IFRS)
  • Cyprus has a low-risk market economy
  • Cyprus has robust legal and regulatory systems

 

 

Key Factors

The key factors to registering an offshore company in Cyprus are:

    • Timeframe: Incorporation of a company will take between 7 to 14 business days
    • Director: Minimum one and from any nationality
    • Director: The company can also have corporate directors
    • Shareholder: Minimum one and from any nationality
    • Shareholder: The company can also have corporate shareholders
    • Confidentiality and Privacy: Directors and Shareholders information are available to the public and partly available in the public record
    • Nominee services: Directors and shareholders can choose to remain private by appointing nominee directors and shareholders
    • Registered Agent and Office: The company have to appoint a registered local agent with locally registered address
    • Resident Cypriot Company: A resident Cypriot Company is a company that has the most Cyprus residents as its directors and the company gets to enjoy 12.5% corporate tax, avoid double taxation from more than 40 countries worldwide, and register for Value Added Tax benefits
    • Non-resident Cypriot Company: A non-resident Cypriot company is a company that none of its directors are Cyprus citizens and the company do not have to pay any taxes but it cannot benefit from double taxation from more than 40 countries worldwide and unable to register for Value Added Tax benefits
    • Taxation: The tax rate is between 0% to 12.5%
    • Shares and Capital: While there is no paid up capital required, the standard authorized share capital is 1000 Euros
    • Annual Financial Statement: The offshore company needs to file the audited accounts with the Commissioner of Income Tax and the Central Bank of Cyprus
    • Formation Fees: The registration for a non-resident Cypriot company with a registered office and secretary costs around 1750 Euros

 

  • Annual renewal of company: The annual renewal fees are due on the company’s anniversary and the company needs to pay an annual fee of 350 Euros on 31st of June each year starting from the second year of the company’s incorporation
  • Cyprus Shelf company: For business owners that want to start operating their business immediately and to avoid delays and uncertainty in the name approval and duration of registering a company, there is another alternative where they can immediately purchase a Cyprus shelf company

 

Recommended Business Industries

Cyprus is an ideal place for the following recommended business industries:

  • Internet commerce or e-commerce
  • Intellectual property management
  • Protection of movable and immovable properties
  • Inheritance provisions
  • Stockbroking
  • Forex
  • Holding structures

 

Companies incorporated in Cyprus can also be controlled and managed from foreign countries. While a local resident Cypriot company will only be taxed on the income derived within Cyprus, non-resident Cypriot companies benefit from all types of tax exemptions.

For other opportunities, please refer to Cyprus Investment Promotion Agency (CIPA), a registered non-profit company by guarantee and completely funded by the Government of Cyprus with the aim to encourage and bring in more foreign investments into Cyprus.