Setting Up a Company in Cyprus: A Comprehensive Guide for 2025

Cyprus has steadily grown into one of the most business-friendly destinations in Europe. Thanks to its low corporate tax rate, strategic location bridging Europe, Asia, and Africa, and investor-centric policies, more and more entrepreneurs and corporations are considering setting up a company in Cyprus.

If you’re considering setting up a company in Cyprus, this comprehensive guide will walk you through everything you need to know from legal requirements to tax benefits and registration procedures.

Why Cyprus is Ideal for Business Formation?

Cyprus continues to rank among the top destinations for business formation in Europe due to several key advantages:

• Low Corporate Tax Rate: Cyprus boasts a 12.5% corporate tax, one of the lowest in the EU.
• EU Membership: Businesses incorporated in Cyprus can enjoy the full benefits of being part of the European Union.
• Double Tax Treaties: Over 65 tax treaties protect businesses from double taxation.
• No Withholding Taxes: Dividends, interest, and royalties paid to non-residents are exempt from withholding tax (with few exceptions).
• English Proficiency: English is widely spoken and used in business and legal documentation.

These benefits make setting up a limited company in Cyprus particularly appealing for international investors.

Cyprus is Ideal for Business Formation

Types of Business Entities in Cyprus

When it comes to setting up a company in Cyprus, the most common structures include:

1. Private Limited Company (Ltd)

This is the most popular choice, especially for small to medium enterprises.

• Requires at least one shareholder and one director (can be the same person)
• No minimum share capital (though a nominal €1,000 is commonly used)
• Must appoint a company secretary
• Liability of shareholders is limited to their contribution

This is ideal for those interested in setting up a limited company in Cyprus for e-commerce, consulting, tech, or holding purposes.

2. Public Limited Company (PLC)

Suitable for large-scale operations, with:

• Minimum share capital of €25,630
• At least seven shareholders
• Three directors required

3. Branch Office

Foreign companies can operate in Cyprus by opening a branch, which is subject to local laws and must appoint a local representative.

4. Partnerships and Sole Proprietorships

These are available but less common due to unlimited liability risks.

Types of Business Structure in Cyprus

Step-by-Step Guide to Setting Up a Company in Cyprus

Let’s explore the key steps for setting up your business.

Step 1: Choose a Company Name

The proposed name must be unique and approved by the Cyprus Registrar of Companies. It must also include “Ltd” for limited companies.

Pro Tip: Use English-language names for faster approval and easier branding globally.

Step 2: Draft the Company’s Memorandum & Articles of Association

These are the founding documents that detail:

• Business activities
• Rights and responsibilities of shareholders
• Rules for decision-making and director duties

Legal assistance is highly recommended to ensure compliance with the Cyprus Companies Law, Cap. 113.

Step 3: Appoint Directors and Secretary

• At least one director (individual or corporate)
• A company secretary (can also be the director)
• It's common to use nominee services for privacy and administrative ease

Step 4: Register the Company

Submit the following to the Department of Registrar of Companies:

• Company name approval
• Memorandum and Articles of Association
• Details of directors, secretary, and shareholders
• Registered office address in Cyprus

The registration typically takes 5–7 business days.

Guide to Setting Up a Company in Cyprus

Post-Incorporation Company in Cyprus Requirements

Once you've completed setting up a business in Cyprus, you must fulfill the following ongoing obligations:

1. Obtain a Tax Identification Number (TIN)

Register the company with the Tax Department to receive a TIN, essential for VAT and corporate tax compliance.

2. Register for VAT (if applicable)

Mandatory if turnover exceeds €15,600/year, but you may voluntarily register earlier—especially for international operations.

3. Open a Corporate Bank Account

Cyprus banks require:

• Certificate of Incorporation
• Company documents
• Passport and proof of address of directors/shareholders

Many foreign entrepreneurs prefer international banking solutions like EMI accounts or FinTech services if traditional bank processes are lengthy.

4. Annual Filings and Reporting

• Annual return (HE32) must be submitted with updated shareholder info
• Audited financial statements are mandatory, even for dormant companies
• Corporate tax returns must be filed annually

Costs of Starting a Business in Cyprus

Here’s a general breakdown of what you can expect to pay:

Item	Estimated Cost (EUR)
Name Approval & Registration Fees	€150–€250
Legal Drafting of Articles	€500–€1000
Nominee Services (if needed)	€800–€1500/year
Registered Office Address	€300–€500/year
Annual Maintenance (Accounting, etc.)	€1000–€2500/year

Note: 

• Using a professional services provider can simplify setting up a business in Cyprus and may offer package deals that include all compliance and banking services.
• Nominee services are legal in Cyprus and commonly used to ensure administrative efficiency and privacy. However, ultimate beneficial ownership (UBO) must be disclosed to the Registrar and relevant authorities.

Total cost of starting a business in Cyprus

Ongoing Compliance Requirements

Running a Cyprus company comes with annual obligations:

1. Annual Returns (Form HE32): Must be submitted to the Registrar along with financial statements.
2. Audited Financial Statements: Required for all companies, prepared by a Cyprus-licensed auditor.
3. Annual Levy: A €350 annual fee paid to the Registrar.
4. Tax Filings: Corporate tax returns must be submitted annually.
5. VAT Filings: Quarterly, if registered.

Failure to comply may result in penalties or deregistration, so hiring a local accountant is recommended.

What You Need to Know About Cyprus Taxation?

Taxation is often the most significant concern when setting up a limited company in Cyprus. Here are the highlights:

Corporate Income Tax

• 12.5% on net profits
• Dividend and capital gains exemptions apply under specific conditions, including non-passive nature and substance requirements, in accordance with Cyprus tax residency rules and EU anti-abuse directives.

VAT

• 19% standard rate
• Reduced rates of 5% or 9% on specific services (e.g., food, medicines, hotels)

Withholding Taxes

• None on dividends, interest, or royalties paid to non-residents

Personal Income Tax

• Progressive tax system ranging from 0% to 35%
• First €19,500 of income is tax-free

Can You Set Up a Company in Cyprus Remotely?

Yes. Thanks to digitization, foreign entrepreneurs can complete the entire process remotely through a registered agent or local law firm. You don’t need to travel to Cyprus to open a company or bank account (though some banks may require a physical meeting or video verification).

Many foreign businessmen are turning to alternatives such as EMIs (Electronic Money Institutions) or EU-licensed e-banks.

This remote flexibility makes Cyprus a prime choice for digital nomads, tech founders, and e-commerce entrepreneurs.

Set Up a Company in Cyprus Remote

Cyprus as a Gateway to European Markets

Beyond its tax and administrative advantages, Cyprus provides businesses with access to:

• The European Single Market
• A skilled, multilingual workforce
• Modern infrastructure and favorable IP laws
• Strategic trade routes to the Middle East, North Africa, and Asia

If your business targets clients or partners across Europe, starting a company in Cyprus positions you in the heart of international commerce.

Common Industries in Cyprus for Foreign-Owned Businesses

Some of the most popular sectors for incorporation include:

• Finance & Forex
• Information Technology
• Shipping & Maritime
• Holding Companies
• Real Estate Development
• eCommerce and Digital Services

Each industry has specific licensing and compliance needs, so professional guidance is advised when entering regulated sectors.

Ready to Set Up a Business in Cyprus?

Working with a professional services firm ensures a smooth and compliant setup process. Offshore Company Corp, for example, offers end-to-end Cyprus company formation packages, including legal drafting, bank account setup, and post-incorporation support, all tailored to international clients.

Get in touch with a consultant today to explore your options for starting a company in Cyprus and building your gateway to European success.