Business entities in Cyprus
Healy Consultants will assist our Clients with Cyprus company setup. There are several ways of doing business in Cyprus, the most common being the setting up of a limited liability company. Foreign entrepreneurs may also opt to set up a public limited company, or a branch office. LLCs and PLCs in Cyprus are normally good business entities for entrepreneurs who would like to start tax-resident holding companies. If a company is tax resident in Cyprus, it is taxed on worldwide income whereas if the company is not tax resident in Cyprus, it is only subject to tax on income generated in Cyprus.
The Cyprus limited liability company (LLC)
- The Cyprus LLC requires only 1 director who may also be the sole shareholder and may be of any nationality for the incorporation process to be complete. A company secretary is also required for setting up an LLC in Cyprus. The minimum paid-up capital required is €1;
- It is not mandatory for a Cyprus LLC to appoint a resident director. However, in order for the LLC to benefit from the 10% corporate tax rate on its worldwide income, the company should have a director who is resident in Cyprus. If required, Healy Consultants will provide these services for our Client;
- LLCs in Cyprus are not required to submit annual audited financial statements.
The Cyprus public limited company (PLC)
- A Cyprus PLC is required to appoint a minimum of one director and seven shareholders of any nationality in order to complete the incorporation successfully. The minimum paid-up capital required is a €1 and a company secretary must also be appointed;
- This business entity must file audited financial statements with the Registrar of Companies within twelve months of the financial year end and therefore must appoint a local Cyprus-approved auditor.
The Cyprus branch of a foreign company (International business branch)
The Cyprus branch is required to appoint at least one corporate agent who should be resident in Cyprus authorized to accept service of any notice on behalf of the company. If the management and control of the business entity is not in Cyprus, which means the company is not tax-resident in Cyprus, the profits of the branch are exempted from all taxes.
Table of comparison between Cyprus entities
|Also known as||LLC||PLC||International business branch|
|How long to set the company up?||2 weeks||3 weeks||5 weeks|
|How long to open company bank account?||4 weeks||5 weeks||6 weeks|
|Wholly foreign owned?||Yes||Yes||Yes|
|Minimum paid - up share capital?||€1||€1||€1|
|File annual tax return?||Yes||Yes||No|
|Tax registration certificate required?||Yes||Yes||No|
|Recommended corporate bank account?||Standard Chartered||HSBC||Barclays Bank|
|Does our Client need to travel?||No||No||No|
|Resident director required?||No||No||No|
|Resident shareholder required?||No||No||No|
|Minimum directors allowed?||1||1||0|
|Tax identification code needed?||Yes||Yes||No|
|Company secretary required?||Yes||Yes||No|
|Corporate agent required?||No||No||Yes|
|Corporate shareholders allowed?||Yes||Yes||Yes|
|Corporate director(s) allowed?||Yes||Yes||No|
|Statutory audit required?||No||Yes||No|
|Cyprus corporate tax rate?||12.5%||12.5%||12.5%|
|Annual financial statements required?||Yes||Yes||No|
|Regulated by?||Ministry of Energy, Commerce, Industry and Tourism||Ministry of Energy, Commerce, Industry and Tourism||Ministry of Energy, Commerce, Industry and Tourism|
|Allowed to issue sales invoices?||Yes||Yes||No|
|Allowed to sign contracts?||Yes||Yes||No|
|Allowed to import and export goods?||Yes||Yes||No|
|Can rent an office space in Cyprus?||Yes||Yes||Yes|
|Can buy Cyprus property?||Yes||Yes||No|
|Total Cyprus business setup costs in yr. 1?||€7,535||€10,335||€9,705|
|Subsequent annual costs (incl. accounting and tax fee)?||€3,400||€3,400||€3,400|
|Sample engagement invoice?|
Frequently asked questions
What is the most common type of entity used for Cyprus business setup?Most of our Clients setup a limited liability company in Cyprus.
How long will it take to setup a company in Cyprus?It takes on average 10 weeks to setup a business in Cyprus including i) engagement planning ii) company incorporation iii) corporate bank account approval iv) corporate internet banking approval and v) engagement completion.
Will I need a resident director for Cyprus LLC setup?No. A resident director is not mandatory to start a company in Cyprus.