Company in Cyprus

Company in Cyprus

Until recently, Cyprus was recognized as the largest tax haven in which every entrepreneur, focused on quick success and high income, wanted to set up his company. The coincidence of political and economic events caused, that since 2013 fewer and fewer people have decided to register a company in Cyprus. But it it's right attitude?

Taxes in Cyprus

Tax paradise is the name used to describe places that have gained popularity among entrepreneurs who want to set up a business abroad for tax optimization. Cyprus is in the list of places where Poles are eager to open a foreign company. The Republic of Cyprus has been a member of the European Union since May 1, 2004, is located in the Mediterranean on the island of Cyprus, off the coast of Turkey, Syria and Lebanon.

Business in Cyprus – Advantages

The popularity of company formation in Cyprus is not only due to the aesthetic value of this place but primarily due to business value. Over the past two decades, Cyprus has become a significant business and financial center for foreign entities. The topic of business in Cyprus arouses interest among investors who already have their companies, but also among those intending to just open their business. The possibility of open business in Cyprus results from the guarantees offered by the membership in the European Union i.e. from the principle of free movement of capital and the principle of freedom of doing business.

Cyprus, like any European Union country, has signed an agreement with Poland regarding the avoidance of double taxation. The fact that the island can boast of the lowest income tax rate in the European Union is an argument for opening a company in Cyprus. Additional advantages to open company in Cyprus may be a number of tax exemptions provided for in EU directives, low maintenance, establishment and functioning of the company, as well as a guarantee of economic confidentiality.

Company registration in Cyprus

Registration of a company in Cyprus is a two-step process. The opening of the company begins with the submission of an application for permission to establish a business. This application contains such information as e.g. name of the company, description of its activity or place of its performance. Obtaining acceptance of the name opens the second and final stage of establishing a company in Cyprus – submission of a registration application.

There is no minimum and maximum share capital in Cyprus. There is also no obligation to actually cover the share capital. The company must have at least one director and secretary.

The tax year in Cyprus coincides with the calendar year except for the first year, which may last up to 18 months. A tax residence, and thus the use of tax preferences, requires the location of an island management center and full control of the company. In practice, this means that the majority of directors must be resident of Cyprus. Registration of a company in Cyprus also means that there must be board meetings there.

Ready made company in Cyprus

The entrepreneur does not always want to wait for the company to be registered in Cyprus. The solution to this situation may be the purchase of a ready, already registered company. This is the fastest way to start a business. As a rule, such companies exist for a relatively short period of time, have not conducted operations before, and were created for subsequent sale. However, this solution is not used, because the process of opening new company is fast and it’s cheaper.

Company formation in Cyprus

A company in Cyprus will be a good investment only if the registration process is carried out in accordance with local law and guidelines. It is worth emphasizing that the changes that entered into force in 2013 contain a clause regarding a better exchange of information between the Polish and the Cypriot tax office, which forces entrepreneurs to properly tax administration in order to avoid additional controls. That is why company registration in Cyprus is worth entrusting to professionals. Our law office provides comprehensive legal services and consultancy in the field of commercial law, which allows us to avoid errors that prevent full tax optimization of the company.

Are you interested in establishing a company in Cyprus or do you want to talk about it? Entrust this task to professionals. Contact us.