Cyprus Offshore Company

Cyprus offers numerous opportunities for international investors looking to form an offshore company in the European Union.  Whether for investment, as a holding company or for trading purposes, Cyprus has over fifteen different offshore company formation vehicles in a jurisdiction that has a long history of international finance. A Cypriot Company is governed by the Companies Law, Cap 113 that was inspired by the UK's Company Act.

Some of the most popular companies offered is the Cyprus IBC and the Cyprus LLC is appropriate for those residing outside of Cyprus and who would like a private company with a non-residential status.

Since Cyprus’ induction into the European Union, its financial vehicles have gone through many changes so as to make it conform to EU legislation. It has managed to remain sufficiently autonomous while reaping many of the benefits gained by becoming an EU member.

Cyprus continues to provide offshore company formation opportunities, but now the industry exists without the negative associations of being an offshore tax haven. Since its entry into the EU, all Cyprus companies now get the added benefit of having access to the European Union’s numerous economic, trade and legislative agreements, all in a legitimate and traditional financial centre.

For more information on the Advantages of Cyprus as an Offshore Financial Center, click here.

Table of Contents:

• Cyprus Offshore Company Registration
• Advantages Of Forming A Company In Cyprus
• Top Uses
• Key Corporate Features Of A Cyprus IBC
• Incorporation Package
• How To Set Up A Cyprus Company? 
• Company Registration Process
• Corporate Bank Account For A Cyprus Company
• Required Documents For Cyprus Company Registration
• Cyprus Company Taxes
• Cyprus Company Formation Corporate Details 
• FAQ: Cyprus Offshore Company

Advantages of Forming a Company in Cyprus

• Cyprus is a member of the EU
• Cyprus has access to a number of EU conventions and agreements
• Taxation is 0% for all non-resident companies
• Single member ownership is permissible
• Geographical proximity to Europe
• Nominee services are available
• Companies Act modeled after the UK
• Perfect international vehicle for trading or as a Cyprus holding company
• New migration of domicile laws
• Any nationality and resident of any country (except Cyprus) can form a non-resident LLC
• Uncomplicated formation requirements
• Located in the temperate Mediterranean
• English is widely spoken

Potential drawbacks include financial reporting obligations for statements, a partial lack of anonymity since some documents are publicly available, and a possible language barrier with certain documentation and processes in Greek.

Top Uses

• Trading Company
• Holding Company
• International Investment Company
• Tax planning vehicle
• Consultancy
• Professional Services
• Copyright and property holding

Cyprus offers different limited company structures, including Private Limited (Ltd) and Public Limited (PLC) companies. Private Ltd companies have up to 50 shareholders and minimum €1,000 capital, while PLCs are publicly traded with minimum €25,000 capital. Other options include Limited by Guarantee companies with/without share capital and Variable Capital Investment companies. The suitable structure depends on the specific business needs.

Key Corporate Features

Incorporation Package

Includes:

1. Government Registration Fee (First year)
2. Registered Office Address (First year)
3. Registered Agent Services (First year)
4. Company Secretarial Maintenance
5. Certificate of Organisation
6. Articles of Organisation
7. Minutes of First Organisers Meeting
8. Ownership Certificates
9. Register of Members
10. FREE Phone and/or email consultations

How to set up? 

The requirements to form a Cyprus IBC are as follows:

• Valid passport
• Personal contact details
• Bank reference letter
• Proof of residential address

You will also need

1. Register and secure name of the proposed company
2. Memorandum and Articles of Association
3. Certificate of Incorporation
4. Appointment of a company director(s)
5. Registry of members and directors
6. Share Certificate(s)

The incorporation process involves:

1. Preparing required documents like proof of identity
2. Reserving an approved company name
3. Designating a registered office address in Cyprus
4. Defining the shareholding structure and appointing director(s)
5. Drafting the memorandum and articles of association
6. Submitting incorporation documents and fees to the registrar
7. Obtaining the certificate of incorporation once approved

Adhering to all requirements precisely is crucial to avoid delays.

We can help to prepare and file all documents that you might need. 

Company Registration Process

In order to register a company, this is what the process will look like:

• Step 1 Offshore Protection works with you to secure a company name with the Company Registry
• Step 2 Offshore Protection works with you to get a Memorandum of Association (MOA)
• Step 3 Offshore Protection helps you to prepare and file incorporation documents
• Step 4 Offshore Protection helps to prepare KYC and AML documents needed to open a corporate bank account
• Step 5 Offshore Protection delivers the certificate of incorporation

Corporate Bank Account

You can open a corporate bank account in most countries around the world with a Cyprus company. We have banking connections in dozens of countries, though the ones we recommend will be dependent on your situation as some banks require in-person visits, higher capital, more due diligence, and references, while others have minimal requirements.

To open a corporate bank account, Cyprus companies typically need incorporation documents, owner IDs like passports, and proof of address. Banks may charge fees, require activity updates, and conduct due diligence on owners and clients.

We suggest getting in touch for a consultation as there are many variables that go into finding the best place to open a bank account for your company.

Required documents

The Documents are submitted to the Registrar of Companies in Cyprus that include:

• Articles of Association
• Memorandum
• A statutory declaration by a Lawyer (HE1)
• Forms HE2 and HE3

Company Taxes

Cyprus Companies are identified as being resident or non-resident for taxation purposes. Therefore, a company is taxed only if it is tax-resident of Cyprus, and if its management is performed locally in Cyprus.

Upon entering the EU, Cyprus had to conform to a number of financial regulations; however, the IBC most embodies the tax breaks and structure formerly had by other Cyprus companies.

All Cyprus companies that are owned by a resident are taxable at 12.5%.

Cyprus offers an attractive 2.5% tax rate for intellectual property companies that develop and exploit qualified intangible assets like patents and software.

If a company is owned by a non resident and does not engage in any business activities in Cyprus nor in the EU then the company is not taxable.

A Cyprus IBC enjoys a number of tax benefits including:

• No tax on profits
• No tax of dividends
• No royalty payments
• No capital gains
• No withholding tax
• No wealth or inheritance tax

Corporate Details 

Anonymity, Confidentiality and Disclosure

The details of the shareholders, directors as well as the company’s financial statements are publicly accessible, and though the details of the beneficial owner are disclosed they are not made publicly available. Nominee services are available for use, which ensure anonymity for the director or shareholders.

Company Shares

An IBC may use registered shares, preference shares, redeemable shares and shares with or without voting rights.

Required Capital

There is no minimum capital with a usual authorized capital of €1,000

Financial Statements required

Financial statements are required and are not made publicly available

Directors

One Director is required for a who may be from any nationality, except Cyprus, and may be either an individual or legal entity

Company Secretary

A Cyprus IBC must appoint a Secretary. The Secretary can be an individual or a company. If the company is a single under single ownership then the Director can also be the Secretary.

Company Meetings

Company meetings are required and may take place anywhere in the world. At least one Board of Directors meeting per year.

Principal Corporate Legislation

The Cyprus IBC is regulated through the Companies Law, Cap. 113. The law has been in force since 1952 and modeled off of the UK Companies Act 1948, though since then it has been amended when the country was incorporated into the European Union.

Type of Law

Mixed legal system (Civil and Common law)

Shareholders

A Cyprus IBC must have at least one shareholder and not more than 50. Shareholders may be of any nationality and a resident of any country, except Cyprus, and may be an individual or a corporate body.

Exchange Controls

There are no exchange controls in Cyprus

Language of legislation and Corporate Documents

Greek, with certified English translation

Registered Office required

A registered office is required for a Cyprus IBC

Local Presence

An IBC must have a local registered office. No local secretary, director or any other presence is required.

Audit Requirements

A Cyprus IBC must have their financial accounts audited every year and submitted to the Cyprus Inland Revenue department. Audited financials are not made publicly available.

Annual Reporting

Audited financial accounts need to be prepared and submitted annually, in accordance with the International Financial Reporting Standards (IFRS), to the Cyprus Tax Authorities

Shelf Companies available

Shelf Companies are readily available

Time required to form an offshore company

5 – 10 days

Name Restrictions

A Company must not use words such as “Assurance”, “Bank”, “Building Society”, “Royal”, “Trust Company”, “Europe”, “International”, and “Trustee Company” or any other words that are deemed offensive or undesirable by the Register.

Language of Name

Name may be in any language using the Latin alphabet

Names of Company requiring a special License or permission

A Company must receive permission for some types of services, including but not limited to banking, insurance and financial services.

Access to Double Tax Treaties

Cyprus has signed Double Taxation agreements with over 40 countries, however, DTT’s are not accessible for non-resident companies

Government Annual Tax

€400

FAQ: Cyprus Offshore Company

What are the annual company obligations?

Cyprus companies must meet annual requirements like holding Board meetings, preparing IFRS-compliant audited financials, submitting annual reports, and paying applicable corporate tax installments. Compliance is crucial for maintaining good standing.

How much does it cost to start a company in Cyprus?

The cost of a Cyprus company depends on a number of factors. Beware of any flat costs that are quoted by salespeople online. There are many extra fees associated with registration together with extra services that make an exact quote difficult though it can range from 1000-3000 EUR. 

Why do companies register There?

The main reason why Cyprus has become a great attraction as a location is the business-friendly tax system that offers many advantages to companies. The key benefit of a resident corporation is the uniform 12.5% corporate tax rate which is one of the lowest in Europe. And for non resident companies there are no taxes.

Is It tax-efficient?

If structured properly, a Cypriot company can be used to conduct international business efficiently. Which means that the company can be used as an international trading or holding entity that is nontaxable if all assets and trading are not done within Cyprus or the EU. If activities are conducted in the EU they are taxable at 12.5%.

Cyprus is the most popular destination for foreign investors in Europe because of its favorable tax regime and low cost of doing business. The country has been attracting huge sums of more than $1 billion in investment from multinationals due to having some of the lowest tax rates in the EU.

What are the benefits?

The use of a Cyprus company allows entrepreneurs to legitimately conduct business in Cyprus and internationally subject to a corporate tax rate of 12.5%, which is among the lowest rates in the European Union (EU). However, all business that is conducted outside of the EU is free from taxation

What are the legal requirements?

There are minimal requirements for a Cyprus private company which is why we recommend it. There is a minimum of one shareholder and one director which is required for company registration. A registered local address must also be used where all of its records are to be kept.

What is The tax policy regarding dividends?

Cyprus does not levy a tax on dividends, interests, and royalties paid to non-residents of Cyprus except when it is based within Cyprus.

What are the requirements for filing Income Tax Return?

All Limited companies that are incorporated in Cyprus are required to include financial statements audited by authorized auditors or accountants and a declaration on the Income Tax Return.

Cyprus Offshore Company Registration

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