How to register a company in Cyprus: A step-by-step guide

With its low tax rate and strategic location, Cyprus is well established as one of Europe’s top incorporation hubs. In this article, we lay out a step-by-step process for registering a company in Cyprus as well as the top benefits of doing so.

Cyprus

With its strategic location at the crossroads between the EU, the CIS, and Africa, favorable conditions and tax incentives for entrepreneurs, and high quality of life, Cyprus is well established as one of Europe’s top incorporation hubs.

As global giants like Microsoft, Amazon, and Google flock to the island, many other tech and financial services companies are following suit.

If you’re considering joining them, you’ll need to know the requirements and steps to follow to register your company.

The process of registering a company in Cyprus is fairly straightforward and takes just a few days to complete. This guide will walk you through everything you need to know to get started — from the benefits, costs, and drawbacks to the step-by-step registration process.

What are the benefits of registering a company in Cyprus?

If you’re thinking about opening an office in Cyprus, you’re in good company. Many established tech, fintech, and financial services players have already made the move, including eToro, Wargaming, Brainrocket, MUFG, and DataArt.

Let’s take a look at a few of the main benefits that are attracting businesses to Cyprus.

1. Strategic location

Cyprus is strategically located in the eastern Mediterranean, at the crossroads of Europe, Asia, and Africa, providing easy access to various markets and making it an ideal location for businesses looking to expand their operations internationally.

2. Favorable tax regime

At 12.5 percent, Cyprus offers the lowest corporate tax rate in the European Union. This rate can be reduced to as low as 2.5 percent thanks to the country’s intellectual property (IP) laws — which also cover tech and finance companies.

Additionally, Cyprus has double taxation treaties with more than 60 countries, which can prevent entrepreneurs from being taxed twice on the same income.

3. EU membership

As a member of the European Union, Cyprus provides businesses with access to the EU’s single market, allowing for the free movement of goods, services, and capital.

This can be particularly advantageous for businesses looking to operate across Europe and can make it easier to make and receive payments via SEPA transfers — one of the quickest, easiest, and safest ways to move money across the Eurozone.

4. Skilled workforce

Cyprus has a well-educated and multilingual workforce, with over 70 percent of the population proficient in English — which is an advantage for international businesses looking to target high paying EU and US clients.

The country is also undergoing a “brain gain” process as international tech, fintech, and finance professionals flock to the island. Some recruiters are even focusing on bringing skilled Cypriot nationals back from places like the US, Europe, the UK, and the Middle East.

While local talent is plentiful, companies also have the opportunity to hire up to 70 percent of their skilled workforce from other countries for up to five years, and 10,000 skilled workers from other countries have already relocated to Cyprus.

For example, US-based project management platform Wrike relocated over 150 employees to the island, contributing to “Cyprus’ position as Europe’s next big tech hub,” according to CEO and founder Andrew Filev.

5. Investor-friendly policies

The Cyprus government offers various incentives and support for foreign investors, including assistance with business setup and potential financial incentives.

These policies have propelled a surge in tech companies in the country — in the IT sector alone, Cyprus has seen a 600 percent increase in investment between 2019 and 2022.

6. Advanced infrastructure

Cyprus has good infrastructure, including advanced telecommunications systems and two international airports, facilitating business operations and connectivity.

It’s partly thanks to this infrastructure that the tech sector has grown exponentially, contributing an estimated $3 billion to the Cyprus economy.

It has also enticed financial services companies to the island, with 120 limited accounting businesses, 160 limited liability law firms, and offices of global accounting firms now active in Cyprus.

7. Growing sectors

As Cyprus works to establish itself as a European tech hub, some of the fastest-growing sectors in the country include:

  • Fintech — there are now 300 companies, collectively amassing over €9.9 billion in total assets.
  • ICT (including software, design, and digital marketing) — the growth in this sector caused the European Commission to increase Cyprus’s forecasted growth rate to 5.6 percent.
  • Start-ups — in 2022, there were over 450 start-ups with a total value of €3.7 billion.

8. High quality of life

The country offers a high quality of life with a pleasant climate, beautiful landscapes, and a safe environment, which can help companies attract and retain highly skilled employees.

The cost of opening a company in Cyprus

The actual costs of registering a company in Cyprus will depend on a variety of factors, including the type of company and the legal service provider you use to set up the company. However, here is a rough breakdown of costs you can expect:

  • Registration fee: this ranges from €1,200 to €4,000 and usually includes further services once your company is registered. Beware firms that claim to charge as little as €500 for registration, they always follow up with additional charges and hidden fees for the services you need to properly register.
  • Annual fees: these are paid on an annual basis and cover:
    • Nominee shareholders and directors: these are usually legal representatives and accountants who act on behalf of the company. The fee for shareholders is €250, while for nominee directors, it’s €400.
    • Registered office: This could be the representative office or your company’s registered office address, and the annual fee is €250.
    • Secretary: All Cypriot companies are required to have a secretary, and the annual fee is €250.
  • Accounting and auditing fees: these vary depending on how many transactions your company makes in a year and the size of your accounting firm — fees are higher for big firms like KPMG and PwC.
  • Annual return: Each year, you will have to file an annual return with the Registrar of Companies. The stamp cost for the return is around €100, and you’ll also have to pay your accountant or legal representative for the preparation and filing of the report.

Are there any downsides to setting up a company in Cyprus?

While there are many benefits to registering your company in Cyprus, you should also be aware of possible drawbacks, which include the following:

  • Tax regime: Companies are only eligible for the 12.5 percent corporate tax rate if they appoint at least one Cyprus resident as a director.
  • Citizenship: Cyprus abolished its golden visa for wealthy foreign investors in 2020, making it more difficult to acquire citizenship through investment.
  • Anonymity: As a member of the EU, Cyprus requires all directors’ and shareholders’ names to be registered on the Registrar of Companies website and available for public viewing.
  • Bank accounts: Local banks are reluctant to open accounts for non-residents — if you want to open a non-resident corporate account, you’ll need to obtain a local tax number, and the signatory of the account may have to attend an in-person interview at the bank branch. Additionally, banks may freeze accounts until documentary evidence for payments can be provided and are not always transparent about fees for international transactions. Many foreign companies have found that opening secure receiving accounts in different currencies through Payoneer has helped them reduce costs and access these markets with less friction than with traditional banks.

Can non-residents register a company in Cyprus?

Yes! There is no residency restriction for company shareholders in Cyprus, so your company can be registered with 100% non-resident shareholders, who can be either individuals or legal entities.

How to register a company in Cyprus

If you’re ready to go ahead with your Cyprus company registration, these are the five main steps you’ll need to follow:

Step 1: Hire a lawyer registered with the Cyprus Bar Association

According to Cypriot law, only lawyers registered with the Cyprus Bar Association can prepare the HE1 Form, Memorandum, and Articles of Association required for company registration.

Therefore, the first step in the registration process is to find and hire a qualified legal practitioner.

Step 2: Apply for a business name at the Registrar of Companies and Official Receiver

The next step is to submit a company name approval application to the Registrar of Companies and Official Receiver (RCOR). You can either do this yourself or through the lawyer you’ve chosen to act on your behalf.

Step 3: Submit your paperwork to the RCOR

Your legal representative will be responsible for collecting the necessary information, preparing the paperwork, opening your local bank account, and submitting everything to the RCOR.

Step 4: Receive your Certificate of Incorporation

After you submit the application form and supporting documents to the Registrar and pay the necessary fees, you will receive notice of the successful incorporation of your company, along with the Certificate of Incorporation and a certified copy of the Memorandum and Articles of Association.

Step 5: Register your company with the Tax Department and Social Insurance Services

Once formed, every company is required to register with the Tax Department to acquire a tax identification number and a VAT registration number. Additionally, you must register with the Social Insurance Services.

Set up your business for success in Cyprus

While registering a company in Cyprus is relatively straightforward and a smart move for businesses looking to crack international markets, you’ll need a robust financial system in place that can help you make quick, secure transactions across borders with the lowest possible costs.

This is where Payoneer comes in: whether you’re sending or receiving funds or holding substantial amounts in various currencies, it’s an efficient alternative to traditional banks, which often have high transfer fees and slow transfer times.

Payoneer’s comprehensive global network powers payments for hundreds of thousands of businesses in 190+ countries and 70+ currencies, making Payoneer an ideal banking solution for entrepreneurs who are establishing their presence in Cyprus and aiming to connect with suppliers and customers in the EU, CIS, South-East Europe, and beyond.

Register for your account to start making fast, secure cross-border payments today.

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