What types of Cyprus Companies can be incoporated?

• General FAQ

  Since the opening of European borders in 1993, all EU citizens can set up a company in a Member State of their choice without being obliged to reside there, in accordance with the Cypriot Companies Law, under the 11th Directive of the Council of Europe (89/666/EEC). In order to the Decree of May 30, 1984 (regarding the registration in France of commercial companies with headquarters abroad) compliant with the Directives of the European Union, the 11th Directive was transposed into French law by the Decree n° 92.521 of June 16th, 1992 published in the Official Gazette of June 17, 1992. Similarly, other European countries have transposed this directive into their national law.
  All that is needed is to find the European country where setting up a company is the least expensive and easiest to manage...

  I live outside of the European Union. Can I legally create a company in Cyprus?
  Regardless of your country of residence and your nationality, you can be a shareholder and / or manager of a company. All you need to have are valid identity documents.

  What types of companies can be set up in Cyprus?
  There are 4 legal types of company in Cyprus:

  • A branch, established by a foreign society in Cyprus
  • A european society, established in at least two different countries of the EU, in order to make transborder operations easier
  • Partnership company
  • Limited liability companies, that can be public or private

  Please consult our dedicated page describing each type of company.
  Note: Amedia is concerned by limited companies and PLC public companies. Differences between the ltd and PLC: one can raise capital on markets not the other.

  How many shareholders do I need?
  In Cyprus, the minimum required number for a limited is one shareholder and the maximum is 50. For a Cyprus PLC company, you must have a minimum of 7 shareholders and there is no maximum.

  What is a "secretary"? Is this mandatory?
  The "secretary" is the administrative representative of the company. It is a mandatory function according to Cyprus law. The Directors of the company can appoint and dismiss this person.

  Will the "secretary" have signing authority?
  Not under any circumstances.

  How much capital do I need? Do I have to make a deposit in the bank before I can start? How many shares should I issue?
  As a "Private Limited Company," there is no minimum or maximum. On the other hand, in the case of a Public Limited Company, the minimum capital/shares must be 25.630€.

  What about opening bank accounts in Cyprus?
  Through our local partnerships, we can assist you to open a personal or business bank account, without having to travel!

  All our partners are major Cypriot banks offering account management through the Internet, or by fax or phone. The accounts are offered by default in Euros, but it is possible to open "multi-currency" accounts. When the account is open, the bank provides a debit payment card (from 500 € of initial deposit) or credit or "gold" card (from 10,000 € of initial deposit). The average time required to open an account is about ten days from the date all documents are received.

  You need to provide:

  • A copy of your ID
  • Two proofs of residence
  • A letter of recommendation from your bank

  Feel free to ask about the different options we can offer you!

• Setting up a company

  How long does it take to set up a Cyprus company?
  It takes approximately a week time to set up a company, but we keep shelf companies on hand which can speed things up a little.

  How many directors and shareholders are needed?
  To set up the company, you need at least one shareholder and one director and both functions can be performed by the same person.

  Do I need a secretary?
  Yes, indeed, it is mandatory by law.

  For each shareholder, director or beneficiary, we need the following documents:
  

  • A letter of reference from sources such as bankers, lawyers, accountants, etc, in English according to the following model: "TO WHOM IT MAY CONCERN. We hereby confirm that .......…………………………..... (your name) is well known to us and is our client/associate (choose the wright word). We consider him/her financially sound, creditworthy and reputable and has always responded promptly to all financial obligations."
  • Two proofs of residence: bills (excluding mobile phone), receipt for rent payment, tax notices, etc.
  • A copy of a valid passport

• Managing a company

  Can you take care of my accounting?
  Of course, we have several Cypriot accountants on our team and this is actually one of our strengths with regard to other relocation firms or law offices. Our services are adapted to our clients, with bilingual consultants able to provide a real technical and linguistic interface between you and our accountants. In addition, we offer detail-oriented service which strictly adheres to the Cypriot fiscal calendar and is adapted to your schedule and work habits. Thanks to our international clients, we are experts in intra-EU transactions. We will inform you of the best format for your monthly deliveries of accounting information (statements, invoices, etc.).

  How much does the accounting service cost? How is it calculated?
  Please contact us with an approximation of the following (number of written documents, currencies and bank accounts used...) and we will send you an estimate.

  What are my obligations regard to maintenance of the company? What are the annual fees?
  

  • Accounting and Audit: the annual accounts and balance sheets of the company are made every 12 months on the anniversary of the establishment of the company. If the volume of activity is high, we advise you to maintain quarterly accounting reports.
  • VAT returns (19%) and VIES: the VAT return has to be made every 3 months while the VIES every month.
  • The registered address and "secretary" services must be renewed every 12 months.
  • Payment of corporate tax (12,5%).
  • The registered address and "secretary" services: must be renewed every 12 months.

  What is the VAT rate in Cyprus?
  The current VAT rate in Cyprus is 19%

  What is the threshold for VAT registration?
  If your total turnover during the past 12 months or your anticipated turn-over for the next 30 days is over 15.600 Euros, you will have to register for VAT

  How long does it take to have a functional Cypriot intra-EU VAT number?
  Between one and two weeks.

  Will I have to pay any social charges such as Social security or retirement?
  If you do not employ any Cyprus residents you will not have to pay any social charges.
  In the event that you would like to employ people on the Island, the social contributions would add up to 6.3% for either the employer or the employee with withholdings only applying on salaries up to 43 000 Euros and after that, you would pay no social charges and neither would the employee.
  If you are self-employed, the total rate would be 11.6% with minimal and maximum contributions varying depending on your occupation and in some cases, years working in that field.

• Corporate Taxation

  What is the tax rate in Cyprus for Cyprus companies?
  The corporate income tax rate for Cyprus Companies is 12,5% flat and with no ceiling. It is actually one of the lowest tax rates in Europe.

  How do I pay tax on profits?
  In Cyprus, the payment is made by prepayment. That means that if a Cypriot company plans to end 2013 with profits, it has the obligation to:

  • estimate these benefits during the year.
  • make two prepayments during the year (at the end of July and at the end of December).

  Each payment represents 50% of the estimated tax, which is 12,5% of the profits, as mentioned previously.

  For example: if you think that your company will finish the year with profits of 30.000€, the corporate tax will be 3.750€ (12,5%) and you have an obligation to make two prepayments of 1.875€ during the exercise.

  How to adjust the payments in case of "under or overestimation"?
  

  • If advance payments have been underestimated, it is possible to adjust them until 1 August the following year. But if advance payments are made less than 75% of the amount of tax computed, the company must pay an additional fee (10% of the difference between advance payments and the actual tax).
  • If no advance payments were made during the year, a penalty will be applied: a fee of € 100 + 5% tax.
  • If prepayments have instead been overestimated, a refund will be made by the Cypriot tax authorities (plus a small interest rate).