What Procedures are Followed to Set Up a Company in Cyprus?

What Procedures are Followed to Set Up a Company in Cyprus?

Setting up a company in Cyprus can offer many benefits to international business people, including an attractive tax regime, access to the European Single Market, and a stable legal and regulatory environment. This article outlines the essential procedures involved in setting up a company in Cyprus to help you navigate the process and establish a legally compliant and successful business in this jurisdiction.

Choosing the Type of Legal Entity

The first step in setting up a company in Cyprus is choosing the type of legal entity that best suits your business needs. The most common types of entities in Cyprus are:

  • Private Limited Liability Company: This is the most popular type of legal entity for small and medium-sized businesses. It offers limited liability protection to its shareholders and can have up to 50 shareholders.
  • Public Limited Liability Company: This type of entity is suitable for larger businesses that intend to issue shares to the public. It requires a minimum share capital of €25,629 and must have at least seven shareholders.
  • Partnership: Partnerships can be general or limited, with general partners having unlimited liability and limited partners having liability limited to their capital contributions.
  • Branch of a Foreign Company: A foreign company can establish a branch in Cyprus, which is subject to local tax and reporting requirements.

Selecting and Reserving a Company Name

Once you have chosen the type of legal entity, you need to select a unique company name. The name must not be similar to any existing registered company or trademark in Cyprus. You can check the availability of your desired name with the Registrar of Companies and submit a name reservation application. Name reservation typically takes 2-3 working days.

Preparing the Memorandum and Articles of Association

Next, you must draft the Memorandum and Articles of Association, which are the governing documents of your company. The Memorandum sets out the company’s objectives, while the Articles of Association outline the rules for the company’s internal management, such as shareholder meetings, director appointments, and share transfers. These documents must be submitted to the Registrar of Companies for approval.

Registering with the Registrar of Companies

After the Memorandum and Articles of Association have been approved, you can submit your company registration application to the Registrar of Companies. The application must include the following information:

  • Company name
  • Registered office address in Cyprus
  • Details of directors, shareholders, and the company secretary
  • The share capital and distribution among shareholders
  • The Registrar of Companies will then issue a certificate of incorporation, confirming that your company has been legally registered.

Obtaining Necessary Licenses and Permits

Depending on your business activities, you may need to obtain specific licenses or permits to operate legally in Cyprus. For example, financial service providers require a license from the Cyprus Securities and Exchange Commission, while businesses involved in the import and export of goods may need a customs registration number.

Registering for Taxation

Once your company is registered, you must apply for a Tax Identification Code (TIC) from the Cyprus Tax Department. You may also need to register for Value Added Tax (VAT) if your company’s annual taxable turnover exceeds €15,600.

Bank account Opening

Finally, you must open a corporate bank account in Cyprus to facilitate your company’s financial transactions. Banks in Cyprus typically require the following documentation to open a corporate account:

  • Certificate of incorporation
  • Memorandum and Articles of Association
  • Company directors’ and shareholders’ identification documents
  • Proof of the company’s registered office address
  • Reference letter from a bank or professional service provider (e.g., lawyer, accountant). More information on bank account opening is available here