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37 years at the top! The system in Cyprus provided in the past, still provides today and can be expected to continue to provide in the long term a uniquely stable opportunity for the registration of international holding and trading companies. The tax system is excellent, in both European and worldwide terms, for those wishing to place their wealth securely in the long run. The more than 60 agreements for the avoidance of double taxation signed by Cyprus facilitate the redistribution of income from dividends, interest and royalties to Cyprus and the further forwarding of such incomes to other jurisdictions.

Cyprus Brochure

Why Cyprus? 

Cyprus: „Resident, but not Domiciled” - Favourable changes in the taxlaws in Cyprus  

Method of incorporation / registration: The Memorandum and Articles of Association must be signed by the shareholders of the company. The minimum number of shareholders is 1.
Company legal form: Private Limited Company by shares
Company status: Non-resident Company
Source of corporate legislation: International Trust Law of Cyprus.
Possible suffixes to company name: Ltd., Limited.
Restrictions on company name: The terms Bank, Insurance, Global, National, Imperial, European, Cooperative, World-wide, Investment, Financial and Trust may not appear in the company name.
Time required for incorporation: 3-4 weeks
Number of directors: Minimum 1 of any nationality. The majority of directors have to be non-resident.
Number of shareholders: Minimum 1
Capitalisation: No minimum requirement, usually 1000 EUR the payment of which is not obligatory.
Accounting / reporting requirements: Yes. Audited accounts are required annually.
Type of shares: Registered
Annual tax and duties: 0% of net profit and 350 EUR.
Information publicly available: Registered office, directors, secretary, shareholders.
Disclosure of beneficiaries: Not required
Registered office: Registered office is required by law.
Registered secretary / agent: Company secretary is required by law.
Double tax treaty: Cyprus has an extensive network of DTTs. Non-resident companies are not subjects of DTTs.

Differences between Cypriot resident and non-resident companies

On the basis of the practice of the tax authorities in Cyprus, a company is considered tax-resident in Cyprus, if at least one of its directors is resident in Cyprus for tax purposes. This somewhat contradicts the principles of "place of effective management", according to which a company is considered tax resident in Cyprus, if the majority of the directors are resident in the island nation for tax purposes, and the company is effectively managed from Cyprus. The assessment of this status is based on an examination of a combination of factors (management of bank account, rights delegated by power of attorney, existence of a real office, employees, etc.).

In cases where the majority of a company’s directors are not resident in Cyprus for tax purposes, the company can apply to the tax authority to be granted non-resident status. This is a separate procedure, and an application can be made to the tax authority once the company has been incorporated. In this case, the majority (or preferably all) of the company directors must be non-resident in Cyprus for tax purposes.

Advantages of non-resident status

  • Companies with non-resident status do not pay corporation tax. They recceive exemption, and, therefore, are not subject to the 12.5% tax on profits.
  • The company has a tax number, and as such is able to open bank accounts both locally and abroad. This will be particularly important from 2019, when all companies (both offshore and non-offshore) will be required to provide the banks with official certificates confirming their tax numbers.

Disadvantages of non-resident status

  • Non-resident companies are not subject to Agreements for the Avoidance of Double Taxation, and as such can not take advantage of any of the benefits offered by such agreements, e.g. in the case of holding companies.
  • Non-resident companies are not subject to VAT, and can not, therefore, obtain EU tax numbers, as a result of which operations within the EU can be difficult.

For what business purposes can the non-resident Cypriot company be recommended?

  • Trading activities, provision of certain services between third party countries.
  • Investment in long-term funds, holding of investments, asset management.

 Cyprus - resident company