Foreign investors have several options when they want to start a business in Cyprus. Because of how the Cypriot government treats people who move there to do business, it is one of the most attractive places for businesses in the European Union. Under these programs, foreign entrepreneurs can set up businesses and live well in Cyprus in exchange for an investment that can lead to permanent residency or citizenship. You might want to use digital tools like Cypruslimited.com to start a business in Cyprus and run it.
The steps for company registration
The following are the steps required:
Choose the business entity you want
First, you need to figure out which type of business structure is best for your investment. When deciding what to do, you should definitely talk to experts in the field and people who have been through the same thing. It will give you a better idea of what to expect in any of the three ways your business can be set up:
- As a sole proprietorship.
- As a partnership.
- As a limited liability company.
You should remember that your decision will affect the paperwork you have to do, the rules of the business, and the taxes you have to pay.
Pick a name
The right name for your business depends on a lot of things, from the type of business you run to your personal tastes and business style. The company registrar and official receiver are the same people. In Cyprus, companies are made and registered by the Department of the Registrar of Companies and Official Receiver. This government agency is in charge of running and managing the most important parts of your registration, and it’s where you’ll need to send most of your paperwork. You must also have a registered office in Cyprus and give the registrar the address of this office, even though you do not have to be on the island. Companies don’t have to hold meetings in the country, but many do because the weather is nice, the labor force is highly skilled, and there are good transportation links. This is especially true in Limassol and Nicosia, which are the two largest cities.
Submit due diligence documents
Cyprus law says that you have to do due diligence, which is also called the “know your client” (KYC) approach. Usually, the company’s owners and officers need to give their names, addresses (both work and home), utility bills, passports, and references.
Check to see if you need any licenses
When a company specializes in a certain field, the government makes the rules tougher. So, if you aren’t sure if you need a special license, talk to one of the advisors to make sure you are on the right track and avoid fines or penalties.
Fee payment
All companies registered with the Cyprus Registrar must pay an annual fee of €350 by June 30 of each year, no matter when they were set up. If you don’t do this, your company will have to pay more fines. The goal of this contribution is to make sure that your company’s name stays on the body’s list and to show that your company is trustworthy.
Make an account at a bank
After that, you should get a separate bank account for your business. It is best to keep your personal finances separate from your business finances. In Cyprus, it takes 10 to 15 days to open a bank account.
How Cyprus taxes and keeps its books
Companies are considered to be tax residents of Cyprus if their management and control (their directors) are based there. In this case, 12.5 percent of your company’s profits will be taxed. On the other hand, non-resident corporations are not taxed in Cyprus as long as the company’s management and control are done outside of the country and you don’t make any money there, according to the island’s tax rules. In these situations, you won’t be able to use the country’s DTA network.
Directorship and secretariat
Your company must have at least one director, who can be a real person or a legal person. There are no restrictions on the nationality of directors. But because your role as a director can have a big effect on your company’s tax situation, it is common for most of the directors of a company to be Cypriot citizens. This lets the government know that the company is a tax resident of Cyprus.
Capitalization and shareholders
A Cypriot limited company should have between one and fifty shareholders. These stockholders can be real people or legal organizations (of any nationality). Under Cypriot company law, information about shareholders, such as their names, addresses, and nationalities, is considered public record. However, if a nominee shareholder is chosen, this can be changed. A private limited company doesn’t have to have a minimum or maximum amount of share capital. In practice, however, it is usually suggested that a business start-up with at least €1,000 in share capital. In terms of time and money, the process of starting a business in Cyprus may seem simple and straightforward. But keep in mind that the restrictions are taken seriously, and if you don’t follow the rules, you could face legal consequences.
