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Company Formation In Cyprus

Cyprus Corporate Environment – Advantages

Over the years, Cyprus has made significant developments regarding its economy, the business opportunities it offers and the quality of life. Many organizations and individual business people are increasingly urged to transfer their business activities on the island due to the numerous benefits emerging from the jurisdiction and the operation of the corporate industry.  

Political Respectability

Cyprus is an Eastern Mediterranean island located south of Turkey, north of Egypt, west of Syria and Lebanon, southeast of Greece, and northwest of Israel. This unique geographic location has always played a significant role in attracting other nations and individuals, as it creates a business link between the continents of Europe, Asia and Africa. The island is considered to be the best link of European companies and individuals to access the profitable market of the Middle East, as it retains good relations with all European countries and those of the Middle East as well. Therefore, many investors have wisely decided to base their businesses in this remarkable international business centre.

Check the article of Cyprus Company Formation for more information about the types of companies one can be set up in Cyprus. 

There are two types of companies falling into this category, namely the Private Limited Liability (Ltd) and the Public Limited Liability (PLC). The two are distinguished by the size and the number of shares they have. 

Types of companies in Cyprus


As a former British colony for over 80 years, Cyprus has adopted the English Common Law system, drafting straightforward and clear sets of rules. When the country entered the European Union in 2004, it gained credibility as a safe place to incorporate with other countries, while also creating trust and confidence in international business people to work within the Cypriot corporate environment. Furthermore, the absence of controlled foreign company regulations, within the European Union, allows corporations greater freedom in their formation and business actions.

Holding a Company

The main objective of all business owners is to hold shares of subsidiaries in Cyprus or international companies where they can perform various activities with no restrictions in sectors such as commercial, financial, manufacturing, construction, engineering and others. This is feasible when the business is based in the Cypriot jurisdiction.

Companies registered in Cyprus are taxed only 12.5% on their net profits; this is the lowest tax percentage in the European Union.

In Cyprus, you encounter quick and simple procedures when forming a company; the registration and initiation of a company can be completed within 2 weeks. Additionally, there are low costs of registering a company and low annual corporate and maintenance costs. When registering a new company, the holders have the freedom to submit the share capital at a later stage, rather than immediately at the time of incorporation. Another noteworthy advantage is the ability to have a virtual office as the headquarters of your business and operate it remotely from anywhere in the world.

Tax Regime

The most significant advantage of basing a company in Cyprus is its extremely beneficial tax regime. Cyprus has been voted by major business organizations as one of the most attractive European tax jurisdictions across Europe, mainly because of the stability of its tax law, the consistency in interpreting its tax legislation and its low tax rates.

Michael Chambers and Co. LLC Corporate and Commercial Law Team of lawyers can advice you on several corporate and commercial matters. 

Companies registered in Cyprus are taxed only 12.5% on their net profits; this is the lowest tax percentage in the European Union. Moreover, companies must pay only 2,5% tax on all profits from possession or trading in Intellectual Property rights, when involved with patents, trade names, trademarks, music or sports or scientific rights, etc. 

Company Incorporation

Cyprus is part of an extensive network of double tax treaties with 64 countries. This enables corporations in the country to receive dividends from any of their local or foreign subsidiaries without being subjected to any taxes. Likewise, they do not need to worry about inward or outward taxation dividends or a Capital Gain Tax (CGT) either, since there is no tax on the revenues from the sales of securities – in contrast to many other countries, where this revenue is heavily taxed.

Economy & Banking

The economy of Cyprus has been remarkably resilient after the economic crisis it went through almost a decade ago. The adaptable free-market economy of the island is primarily built upon tourism, financial services and real estate, which constitute around 80% of the total economic activity and income of the country.

Cyprus has a high standard of commercial banking since it follows the British and European Union models. There are currently 40 local and international banks active in Cyprus. Its banking system has adapted to EC Directives, and operates under the regulation of the constitutionally independent Central Bank of Cyprus, as integrated with the Eurosystem. In addition, it conforms with the provisions of the Treaty establishing the European Community and the Statue of the European System of Central Banks and the European Central Bank.

Quality of Life

Registering a company in Cyprus gives the owner and their family members the opportunity for a long-stay visa for 2 years – which is renewable – and a work permit. After a period of 7 years, they also have the ability to receive an EU passport.

Cyprus is amongst the top 5 safest countries in the world, which makes it the most suitable place to raise a family and live there in peace. The island offers an excellent educational system with well-trained staff and modern technology tools. The majority of the population speaks English at a good level, while Russian is also increasingly popular. Furthermore, the extensive warm climate, the hospitality of its population, and the diverse cultural background, along with the delicious cuisine, amplify the desire of many individuals to settle there.

The business world has become very competitive and demanding. Cyprus has proven to be a wise choice for business people to start a new company or expand their existing companies from other countries. The numerous benefits the country offers to the potential investors provide them with the opportunity to thrive both professionally and personally.

In case you are considering creating your a business in Europe, either from scratch or as an extension of an existing one, then you are recommended to host your corporate activities in Cyprus.

Contact us for free consultation at info@chambers.law