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Company Registration in Cyprus: Tax rates and Benefits

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Why open a business in Cyprus?

Cyprus offers a unique business environment where tax advantages, political stability, and access to the European Union converge to create an attractive destination for investors and entrepreneurs.
 

Below, we will list some of the benefits of setting up a business in Cyprus:

Tax Advantages of Cypriot Companies

  • Corporate tax rate of 12.5%, one of the lowest in the European Union.
  • 0% tax on capital gains from shares, ETFs, crypto…
  • 0% tax on the sale of real estate abroad.
  • 0% withholding tax on dividend distribution.
  • 0% tax on dividends received from other companies.
  • 0% tax on profits from permanent establishments abroad.
  • Special tax regimes like the IP BOX with a 2.5% corporate tax for patents and software.

Cypriot Non-Dom Program

  • Only 60 days of stay in the country are required to be considered a tax resident (as opposed to the 183 days that most countries usually require).
  • Any new resident can be considered Non-Dom by meeting a few simple requirements (which offers great tax advantages).
  • The Non-Dom program combines with the company in Cyprus allowing the distribution of company dividends with a tax of only 2.65% on the first 180,000 euros, then 0%.
  • Discover more about the characteristics of the Cypriot Non-Dom regime and the  advantages of tax residence in Cyprus.

European Union

  • Unlike many other low-tax offshore companies, Cypriot companies enjoy the reputation of belonging to the EU.
  • The facilities for trade, banking operations, and international relations are the same as any other full member state.

Double Taxation Treaties and Agreements

  • Double taxation agreements with a large number of countries, reducing the tax burden for international companies.
  • Benefits for holding companies, such as the exemption of withholding taxes for profit transfers to offshore jurisdictions.
  • More lenient CFC rules than in other EU member states (allowing greater flexibility in creating tax structures, holdings, etc.).

Incorporation and Maintenance Costs

  • A great advantage of opening a company in Cyprus is its cost, both for incorporation and maintenance, as it is much lower than other options for optimizing taxes.
  • For example, opening a company in UAE Dubai would cost three times more, on average, than doing it in Cyprus.
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Cyprus IP BOX: 2.5% taxes

The patent regime or IP BOX in Cyprus is becoming one of the island’s major tax attractions.

Designed to promote investment in Research and Development, Cyprus’ IP BOX ranks among the best tax regimes for patents worldwide.

You can obtain a 2.5% Corporate Tax rate by exempting 80% of profits derived from patents, software, intellectual property, utility models, etc.

If you want to delve deeper into which assets qualify under Cyprus’ IP BOX regime and how it could benefit you, we’ve written a full article available here.

How long does it take to register a company in Cyprus?

If you are planning to register a company in Cyprus, it is advisable to contact us in advance to get everything started as soon as possible.

It’s important to understand that registering a company in almost any country involves certain procedures that can extend the wait time to between 2 and 4 weeks.

Specifically, the registration process in Cyprus involves several stages, including:

  • Approval of the company name (5 days).
  • Drafting of statutory documents (2 days).
  • Submission and review of incorporation documents (5 days).
  • Tax registration (2 days).
  • Social security registration (1 week).

When adding up these times and considering possible holidays by the authorities or any unexpected delays, our average registration time is 4-5 weeks.

You can find more governmental information about Companies in Cyprus and their processes HERE.

How much does it cost to open a company in Cyprus?

The cost of establishing a company in Cyprus can vary depending on many factors such as:

  • Business structure: You can establish a Cypriot Limited Liability Company (LTD), a Limited Partnership (LP), a Holding company, partnership, sole proprietorship, etc.
  • Legal, accounting, or auditing services that may be required.
  • Other potential associated expenses such as immigration procedures or representation costs.

However, we can get an idea of the opening and management costs of these types of companies by looking at the most common entity: the Cypriot Limited (LTD).

The cost for opening an LTD in Cyprus typically ranges between €2500 and €4500 in the market.

Annual accounting and auditing services commonly range around €200-€250 per month.

But beware!

Cyprus is becoming a focal point for investment attraction and business creation.

It’s in this environment where scammers and companies with flashy websites offering low prices thrive, hiding MANY additional expenses that you will inevitably have to pay to proceed with the opening process or make any changes.

In this regard, at Tax Nomads, we are proud to offer these services with total transparency, honesty, and always ensuring the highest quality in every step.

We understand that embarking on the process of forming a company abroad can be intimidating and even stressful, especially for first-timers.

That’s why we commit to being your constant guide in every phase, making it so straightforward that you won’t have to worry about a thing.

If you want to obtain tax residency, set up a company in Cyprus or wish to receive a comprehensive analysis of your situation to discover your best options, simply fill out the form below and let us know your case and needs.

Contact us

The corporate tax rate in Cyprus is 12.5%, which is one of the lowest among European Union countries. This favorable rate contributes to Cyprus’ attractiveness as a business destination, particularly for companies looking to optimize their tax liabilities within the EU.

To open a company in Cyprus, follow these steps:

  1. Choose a business structure: Decide on the type of company, like a Limited Liability Company (LTD).

  2. Register your company name: Ensure it’s available and meets regulations.

  3. Prepare incorporation documents: Draft and submit required paperwork.

  4. Register with authorities: Complete tax and other registrations.

  5. Obtain necessary permits: Depending on activities, get specific licenses.

  6. Comply with ongoing requirements: File taxes and meet regulatory obligations.

The Cyprus Non-Dom regime offers several benefits:

  1. Flexible residency requirements: Only 60 days of residency per year are required to qualify as a tax resident.

  2. Tax exemptions on dividends: Non-Doms benefit from a low tax rate on dividends received from Cyprus companies.

  3. Attractive for high-net-worth individuals: Ideal for individuals seeking favorable tax treatment and EU residency benefits.

Where your tax freedom starts

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