Starting a business in Cyprus can be one of the best decisions you can make. The country boasts a high-income economy and a sky-high human development index (HDI). In the EU, Cyprus is considered as one of the fastest developing economies with a GDP growth rate of 1.6%.
What Types of Businesses Can You Start in Cyprus?
If you have decided to do business in Cyprus, you should be aware of the types of entities that exist in the country. The options available to you are:
· Sole Proprietorship
In Cyprus, a sole trader is given similar obligations and rights to a general partner in a limited partnership. This business structure is classified under the Business Names Law and Cypriot Partnership of Cyprus. If you are to be registered as a sole proprietor, you should live in Cyprus for taxation. You should also be in the country for a minimum of 183 days a year.
The registration of a general partnership is done within one month at the Registrar of Partnerships. You have to provide the business name, business address, purpose, and details of partners. Non-residents can also be registered as partners.
This business type is the same as the general partnership with the exception that it can involve general partners with unlimited liability. And also, it can have partners with liability that is limited to their share capital.
· Limited Liability Company (LLC)
LLC by Guarantee
In this business structure, every contributing member can set a limit on their liabilities. This is however subject to mutual agreement.
LLC by Shares
When you have a public LLC by shares, you have a business entity with a legal personality that’s separated from its shareholders. This business can be listed on the Cyprus Stock Exchange (CSE). On the other hand, A private LLC by shares has a limit of 50 members who are prohibited from public share subscriptions.
· Branch of an Overseas Company
A company based overseas can launch a branch office in Cyprus. The company will also have to file its accounts annually and provide certified Greek translations.
· Offshore Company
An offshore company can be described as a company that’s set up outside the country of the owner. It can be launched in more than one country. You can establish an offshore company in Cyprus to protect your assets and benefit from a tax reduction
· Shelf Company
A shelf company is one that is ready-made but has no assets or liabilities. Usually, it is brand new and has never been involved in business. It’s registered only to be sold.
The Fundamental Steps of Registering your Company in Cyprus
You should come up with a company name. Then, you have to file and submit an application for approval at the Cyprus Company Registrar. The approval process can take a week to be completed through the normal procedure. If you pay for a speedy process, it can be completed within 2-3 business days.
Submission of Documents
After your company name has been approved, you should submit all relevant documents required for the registration of your company. The type of documents will largely depend on the legal form of the business. However, some of the common documents that are needed for any business type are Articles of Association and Memorandum of incorporation documents. These are submitted to the Department of Registrar & Official Receiver. In addition to these documents, you may also provide a lawyer’s statement, business address, details of directors, details of secretary, and payments.
Certificate of Incorporation
When you have submitted all the required documents, they will be approved by Cyprus authorities. After their approval, you will get a certificate of registration. This document is very significant for further process.
Obtain the VAT Number
The VAT number is obtained when you register your company with the Cyprus Tax Department. According to the tax system of the country, VAT registration is not compulsory for all businesses except those that are involved in activities that are subject to VAT e.g. trading.
Social Contribution Registration
All companies that hire employees should be registered for social contributions in Cyprus. They get registered at the Ministry of Labor, Welfare, and Social Insurance.
NB: For a new company to get well-trained employees in Cyprus, it can work with recruitment agencies or use job websites.
List of Documents Needed for Company Incorporation in Cyprus
- A unique name of the company;
- Articles of association and memorandum of incorporation;
- A statement describing the company’s activities;
- Personal details of beneficial owners, shareholders, directors, and company secretary;
- A bank’s reference letter;
- A valid passport;
- Proof of residence (by revealing a bank statement or utility bill)
The information provided in this text is abstract. For detailed information, you may contact lawyers in Cyprus.