Unless otherwise stated, the following applies only to a Cyprus Private Limited Liability Company by Shares:
A. Corporate Information
Shares and Corporate Governance
- Board system : Single tier
- Minimum number of directors : One
- Nationality requirements for directors : No express requirement under Companies Law, CAP 113 of the law of Cyprus ("companies law").
- Corporate directors permitted : Yes
- Minimum number of shareholders : One
- Nationality restrictions on shareholders : None under the companies law
- Company secretary required : Yes. Corporate Company Secretary is permitted. In the case of a sole shareholder owning the Cyprus company, the director and company secretary can be the same person
- Nationality requirements for secretary : None
- Currency for accounts and share capital : Any currency for both accounts and share capital
- Minimum paid up share capital : Nil
- Capital Duty on increase of share capital : 0.6% on nominal value of increase (but not on share premium)
Registrations/Public Disclosure
- EU Directives : As Cyprus is a full member of the European Union, all EU Directives are applicable
- Audited Accounts : Required for all Cypurs companies
- Cyprus Registered office : Yes
- Directors’ Names : Yes
- Shareholders’ Names : Only the registered shareholder is disclosed, details of the beneficiary are not publicly available.
- Ultimate Beneficial Shareholders’ Names : No disclosure.
- Ultimate Corporate Parent Shareholder’s Name : Yes, in a note to the Financial Statements.
B. General Information
Cyprus – General Features
- Basic corporate tax rate : 12.5% (flat rate, among the lowest in Europe)
- Corporate forms : Main corporate forms: Public and Private Companies, limited by shares; companies limited by guarantee; limited and general partnerships
- Cost level : Low, particularly in comparison with Netherlands, Luxembourg, and even Malta.
- Currency : Euro
- Economic stability : Good; during the last five years, the economy of Cyprus has demonstrated solid growth, and government committed to macro-economic stability and its commitment to low inflation, low interest rates and high growth.
- Legal system : English Common Law (Cyprus Company Law, Chapter 113, based on the English Companies Act of 1948)
- Political stability : Very Stable
- Telecommunications infrastructure : Cyprus has good telecommunication links with the rest of the world. There are good postal and courier services.
- Memberships : EU, the Commonwealth of Nations (previously known as the British Commonwealth)
C. Government Charges and Fees
Annual Government charges
- Annual Levy : EUR 350
Transaction Based Government Costs
- Share transfer duty: Nil; stamp duty may apply on the agreement relating to transfer.
- Companies Registry Initial Registration Fee: Flat fee of EUR 102 plus 0.6% of the nominal value of the authorised share capital with no upper limit; usually minimised by using low issued capital and high share premium.
D. Formation Procedures for a Cypriot Private Limited Company
- Name: Name checking can be done online, but formal approval is required before a name can be used.
- Shelf Companies: Commonly used and immediately available, subject to KYC / DD checks.
- Formation of New Companies: Memorandum and Articles of Association in Greek are drafted by a Cypriot lawyer, signed by one or more subscribers in duplicate, submitted to the Registrar of Companies.
- Time span for forming New Companies: 7 to 10 working days
E. Taxation of Cypriot Private Limited Companies
- Residency: The management & control principle is the sole test of residency for tax purposes see separate memo
- Other: Special Defence Contribution (SDC) at 30% on interest income, 17% on dividend income (exemptions apply for most cases), 3% on 75% of rental income.
- Balance sheet based taxes: None
- Taxed on: Worldwide (global) basis, the net profits of the company are in principle taxed but capital gains are not taxed (see below)
- Exempt from tax on: Dividends received under certain conditions
- Capital gains: Not taxed, unless directly or indirectly earned on the sale of Cypriot real estate
- Interest withholding tax: Nil
- Dividend withholding tax: Nil
- Royalty withholding tax: Nil in most cases
- Double tax treaties network: Cyprus boasts an extensive network of double tax treaties, currently with almost 70 countries, including countries in North America, Western and Eastern Europe as well as emerging markets such as India and Russia
- Parent Subsidiary Directive + other EU Directives: Applicable for all EU and EEA countries
- Capital tax on Issue of Share Capital: 0.6% (not on share premium)
- Thin capitalisation rules: None
- Controlled Foreign Corporation rules: None
- Tax year: Calendar year
- Advance tax rulings: Readily available
