Establishing a business in Cyprus means establishing a company in a prestigious jurisdiction, in an EU member state. Despite skepticism in relation to Cyprus companies, they are quite transparent and do not violate any norms of international law.

Cyprus annually attracts foreign investors thanks to multiple benefits offered by the government. Cyprus government has signed 45 DTTs with various countries.  It is a reputable jurisdiction with a transparent tax system. A Cyprus company may be used both for trading within the EU and as a holding company. In addition, Cyprus offers favorable conditions for the purchase and sale of securities, transactions therewith are not subject to taxes on profits and capital gains.

Any Cyprus company must have at least one shareholder and a director. The country’s legislation allows any individuals and legal entities to own a company share.

It is also important to note that for this to happen, the company must have more resident directors than directors of other nationalities. It follows that if you decide to become a director of a company, then the company must have two more Cypriot directors. Unlike many European countries, where the minimum authorized capital is about 1 euro, the minimum capital of a Cyprus company is 1000 euros. Since the capital of the company is divided into shares distributed among the owners, a minimum value of one share must be 1 euro.

Cyprus companies pay 12.5% income tax annually, submit financial statements and undergo an audit. In addition, companies registered in Cyprus are subject to an annual government fee of €350. This fee must be paid by June 30 annually. In case of two-month delay, the fee increases by 85 euros.
Please be aware of the following fines for the failure to pay the fee:

• a fine of 190 euros for a 2-5-months delay;
• forced liquidation in case of 5+ months delay.