Setting up a company in Cyprus, step by step

Starting a company in Cyprus is refreshingly orderly once you know the sequence. The island runs a low corporate tax rate, an English-speaking professional class and a single online portal for most of the paperwork, but the steps still have to happen in the right order. Here is how it actually goes.

Decide the shape first

Before any form is filed, you settle the aim, the legal structure and a simple business model with a financial plan. Most trading businesses incorporate as a private limited company, which is the entity the rest of this guide assumes. You also choose premises and an entity name at this stage, because both feed into incorporation.

Incorporate through the Registrar

Companies are formed through the Department of Registrar of Companies and Intellectual Property. The memorandum and articles of association must be drafted by a lawyer practising in the Republic of Cyprus, and the company is registered using form HE1. You can check whether your chosen name is free at companies.gov.cy, look up trademarks at intellectualproperty.gov.cy, and reserve a .cy domain at registry.nic.cy.

Register with the tax and insurance authorities

Once the company exists, you register with the Tax Department, register for VAT, and register for VIES if you will trade goods or services with other EU countries. You then register as an employer, or as self-employed, with the Social Insurance Services. The standard VAT rate is 19%, with reduced rates of 9%, 5% and 0% on specific categories, and a self-employed person must register for VAT once turnover passes 15,600 euros in any twelve-month period. Self-employed contributors pay social insurance at 16.6% of estimated earnings, and start-ups keep their start-up benefits for the first five years.

The ongoing rhythm

A Cyprus company keeps its accounting records for seven years and appoints an approved auditor, a profession overseen by the Institute of Certified Public Accountants of Cyprus. Corporate income tax is 12.5% of net profit, there is an annual company levy of 350 euros due by 30 June, and audited financial statements are filed on form HE32. The company must have a Cyprus-resident director and hold an annual board meeting, and VAT is filed every three months. None of this is heavy once an accountant is in place, which is the single most useful early hire.

Who to call

Two professionals make the difference at the start: a corporate lawyer for the incorporation and a licensed accountant for tax, VAT and payroll. You will find both in our professional services directory, and you can describe your situation to the concierge to be pointed to the right specialist in your district. Thresholds and procedures change, so treat the government portal as authoritative for exact figures. Source: Point of Single Contact, businessincyprus.gov.cy.