Company registration in Cyprus has become a very attractive site for foreign businesses and entrepreneurs because it provides an EU with low taxes, 0% for dividends, IP box mode, possibility of opening a bank account without physical personal presence. Cyprus is a respectable European company with a good corporate image and with double taxation treaties. 

This article is a complete guide that explains everything you need to know before registering a company in Cyprus. It makes it easier for you decide whether Cyprus is an ideal venue for business. It involves the benefits, company types, requirements, step-by-step registration process, taxes, and costs.

For business and tax optimization cyprus is an ideal jurisdiction in the EU, which is very beneficial and a top choice for business and startups.

They have one of the lowest corporate tax rates in the EU, which includes only 12.5% and allows foreign ownership of 100%. You do not have to pay tax twice with the same income because they have double taxation treaties,s and even if you are a non-resident shareholder, dividends received from a subsidiary are taxable.

They have a very strong legal system based on common English law, which is trusted and supported by many international investors, and they dont have any minimum requirement for share capital, which means you can register a company with any amount of sharecapital even if it's a small one.

 A Cyprus company allows you to work across all the EU member states and provides you with the benefit of EU trade agreements by allowing you to work with European clients. They provide you 100% foreign ownership, so you dont need a business partner and have full control over your company decisions and own the company yourself.

Choosing the right kind of company type is the first essential step in registering a company in Cyprus. The following are the five kinds of companies you can register in Cyprus:

Private limited liability company by shares:

It is the most common type of company in Cyprus, and ownership is divided into shares so each member's risk is limited to the money they invested. It is best for small and medium businesses, startups, online businesses, and entrepreneurs.

Public limited liability company by shares:

By this kind of company, you can sell shares to the public, and it is a very large company, bestsuited suited for big corporations and companies planning to raise money from the public. They have very strict legal and reporting rules. They can list shares to stock and require more capital.

Limited liability company by guarantee without share capital:

It is a company without shares orowners and members promise to contribute only a small amount of money if the company closes. It is best for charities, clubs, associations and non-profit organizations.

Limited liability company by guarantee with a share capital:

This kind of company has a mixed structure; it involves shares, but the members guarantee that the company will remain open. It is best for education or research institutions, or non profit organization with business activities.

Variable capital investment company:

It is the kind of company used for investment funds; due to investor activity, its capital goes up and down. It is used by investment funds and asset management companies.

That is why it is very important that before registering a company,you discuss your case and your specific needs with an expert to determine the structure most beneficial to you.

As compared to other EU companies, you need minimal documentation to register a company in Cyprus. The basic requirements are as follows:

• Company name approval

• Memorandum & Articles of Association

• Registered office address in Cyprus

• At least one shareholder

• At least one director

• Company secretary (mandatory)

• Initial share capital (no minimum requirement)

STEP 1: Choose a name for your company

Prior to incorporating a name in Cyprus, you have to select a name for your company. The selected name must be submitted for approval in the Cyprus company register.

Step 2: Prepare a legal document

A package of documents is drawn up before submitting your application for company registration in Cyprus. The documents to be prepared are different based on the type of entity you choose. The Cyprus company formation has a usual list of documents.

Memorandum of Association: This type of document explains what your company is allowed to do. In simple words, it explains the name of your company, the type of business it will do, the first shareholders and how much share capital it has.

Articles of Association: This document explains the company's internal work. How the directors are appointed or can be removed, how the shares are transferred, and how meetings are held.

Details about the shareholder and diectorand the details about the company's registered office address in Cyprus.

Step 3: official incorporation with cyprus government:

Apply for the registration of a Cyprus company with the approved company name and necessary documents. The registration can be done online via e-filing, or the documents can be submitted in person by post.

The certificate of incorporation shows that the company has been registered, and it contains a registration number that should be included in all official papers.

The cost of company registration in Cyprus is competitive compared to other EU countries. The cost of government fees is approximately €350 – €450,  Legal and registration services cost approximately €800 – €1,500, and the registered office secretary costs approximately €300 – €600/year. All of these estimated costs may differ based on the services.

Cyprus is highly attractive around the world for having a corporate system that helps companies by saving taxes. It has a low corporate tax rate of 12.5%, but it is very important to mention that Cyprus is thinking of a tax reform and increasing the tax upto 15% is in the talk.

The dividend tax is 0% for the non residents. The capital gain tax is 0% on the sale of shares, and VAT is 19% (registration required if applicable). There is no tax on foreign permanent establishment profits. Cyprus is a safe tax place because it does everything correctly. It follows all the rules of OECD and EU.

After registering a company in cyprus opening a corporate bank is the next critical step. The bank requires a lot of things. Identification is something required by the bank. The bank requires a security number or id bank also requires you to have a place to live, the bank requires people to have a job.

The banks require all this information to help them make a decision about who they lend money to. Yet not all businesses require a traditional commercial bank for their needs because now there are other options like online banks or electronic money institutions.

It is mandatory to maintain a Cyprus company. Once in every calendar year, the companies are required to file an Annual Return to the Registrar of Companies, within which a copy of the company’s financial statements has to be attached.

Furthermore, it is required to prepare audited financial statements at the end of each tax year. These are to be filed with the Tax Department together with the tax return.