With some of the most favorable taxation laws in Europe and a growing market for investment, there is no better time to look into company registration in Cyprus.
Property Experts Cyprus gives you everything you need to know about company registration in Cyprus and the numerous tax incentives for any company structure. Also, learn more about special industries such as shipping in Cyprus and registering your boat.
Company Registration in Cyprus
In Cyprus, there are three main types of companies that you can register:
- Private limited liability (Private Ltd) by shares or guarantee
- Public limited liability (Public Ltd)
- Sole proprietorship
Now, let’s take a look at them in detail.
1. Private Ltd
A Private Ltd in Cyprus has no requirement for a minimum share capital. But, they need at least one shareholder and can have no more than 50 members.
2. Public Ltd
A Public Ltd has a minimum share of over 25,000 Euros. They must have at least seven shareholders.
Why Register a Private or Public Ltd
With a fast company registration in Cyprus and few requirements for establishing a company, an Ltd, either public or private, can be used in a number of beneficial ways. The company could be used as a subsidiary of foreign companies to enter into the European market, gain tax advantages, or integrate joint ventures in the market.
Another benefit is using the registration of an Ltd for holding companies, considered one of the best company registration options in Cyprus for tax reasons since there is no withholding tax and a low corporate tax. Foreign shareholders can establish an Ltd without any restrictions and under European Union mandates see low taxes on their company.
Non-domiciled residents can pay out tax-free dividends and have more flexibility with the normal private Ltd company.
Resident companies, including Ltds, are taxed through the standard corporate tax rate of 12.5%, some of the lowest rates in the European Union.
Company registration in Cyprus is often sought after as there are many tax exemptions. Dividends are tax exempt from the Special Defence Contribution tax if the receiver is a non-domiciled Cyprus resident.
3. Sole Proprietorship
Registering a company as a sole proprietorship in Cyprus is probably one of the easiest company structures to set up a business. Taxes are based on income with a free allowance of 19,500 Euros annually. After the allowance, income tax starts at a rate of 20% and progressively rises up to 35% depending on the amount of income earned, comparable to the rest of Europe.
In the past, non-domiciled programs for residency were most attractive to those interested in company formation. However today, with fewer days to become a tax resident, more entrepreneurs and digital nomads are finding Cyprus an island nation with many lifestyle and business advantages.
Many entrepreneurs and digital nomads choose to invoice up to the 19,500 Euro allowance and then invoice through other companies they have set up abroad. These can be run from their residence in Cyprus. There are certain CFC rules on a corporate level that must be met, but individuals are free to choose as long as they abide by the government and tax office guidelines.
Why Choose Cyprus for Company Formation?
Named as one of Forbes 2019 “Best Countries for Business,” Cyprus is not only a great place to live but also for doing business.
Choosing company registration in Cyprus means that your business is in the heart of Europe, Africa, and the Middle East. Not only are there many tax benefits for company formation, the World Bank determined Cyprus to be one of the places in which it is the easiest to do business.
Doing Business in Cyprus
With growing real estate and investment industries as well as a healthy tourism market, businesses across Cyprus are thriving. Many international investors have begun to move into Cyprus to take advantage of the healthy business environment and are encouraged by Cypriot policies such as double tax treaties with over 50 countries that make Cyprus a highly rewarding region.
With a mix of new investment opportunities and booming residency by investment programs, Cyprus offers new businesses or expanding companies the chance to emerge as financial leaders in their industries and establish EU-backed companies. It all starts with the easy process of company registration in Cyprus. Property Experts Cyprus can help you achieve your new Cyprus business with our range of high-quality, professional services.
European Residents
Europeans have many advantages, namely the freedom to move and travel freely within Europe. Already 70,000 British expats along with a growing number of other European residents have taken advantage of the high quality of life and low cost of living that Cyprus affords.
Company registration in Cyprus offers many Europeans and Britains, especially after Brexit, the opportunity to pursue new financial wealth endeavors and expand established businesses in new markets. Cypriot company formation is easy with the registrar of companies and opening a bank account, quick and painless.
Establishing joint ventures or holdings through Ltds in Cyprus expands the reach of businesses through Europe but also to the Middle East, Africa, and Asia.
Non-European Residents
Non-European business owners have even more incentives for registering a company in Cyprus. Upon registration, Cyprus companies are also EU companies, protected and regulated by EU mandates but also enjoying the privileges that come with it.
Cyprus also has some of the most competitive tax policies in Europe while maintaining all the advantages of EU company formation. Shareholders, business owners, and employees all see the majority of their income and profits with little tax deductions. Moreover, the nationality of those registering companies in Cyprus is irrelevant, ensuring equal opportunity in business endeavors.
Through flag theory, there is also the added security that comes with having multiple citizenships or residency options. With the residency by investment program, Cyprus has attracted international investors and businesses that continue to grow the annual GDP and business environment every year.
Given the Covid-19 global crisis, the Cypriot government continues to promote residency by investment program in Cyprus in order to ensure investments retain their stable rise.
Special Industries: Shipping in Cyprus
As only one of two EU member countries to have an approved tax framework for merchant shipping, Cyprus is a leading voice in maritime management and business ventures. This Mediterranean island helps maintain maritime infrastructures but also offers a favorable tax policy for merchant shipping, with Cyprus one of the biggest ship registries in the EU and the 10th largest globally.
Under Cypriot policies, ship owner companies are taxed according to the net tonnage of the vessel by a sliding scale and not under the corporate tax rate of 12.5%. There are many tax exemptions for ship owning and management companies just as there are for other Cyrus companies.
The Takeaway
Company registration in Cyprus comes with many financial incentives for both European and non-European residents. With a favorable business environment and attractive tax policies, the island of Cyprus is a business oasis.
Let the experts at Property Experts Cyprus assist you in the selection of the right company structure for you and the process of company formation so that your business can thrive in the Mediterranean.
