Opening a Company in Cyprus for Foreigners: Key Benefits and Steps

We will guide you through the key benefits, types of business structures, and essential steps for successfully Opening a company in Cyprus for foreigners.

Types of Business in Cyprus

Entrepreneurs are free to choose the legal form of their company in Cyprus. Private Limited Company (Ltd) and Public Limited Company (PLC) are the most popular.

 However, let’s describe all possible legal forms in Cyprus, their features, advantages, and disadvantages. Each of these legal forms can be used for opening a company in Cyprus for foreigners.

Business Type	Description	Legal Liability	Taxation	Regulatory Requirements	Suitable For	Advantages	Disadvantages
Private Limited Company (Ltd)	A private company with shares that are not publicly traded. Requires at least one shareholder.	Limited to the amount of capital invested.	No limited liability, the parent company is fully liable, potential tax implications in the home country.	Must file annual returns, audited financial statements, and meet other compliance requirements.	Small to medium-sized businesses.	Limited liability, separate legal entity, tax benefits.	Restricted transferability of shares, compliance costs.
Public Limited Company (PLC)	A company that can offer its shares to the public. Requires at least seven shareholders.	Limited to the amount of capital invested.	Stricter regulatory requirements, including publishing accounts, having a minimum share capital and holding AGMs.	Large businesses, and companies planning to list on the stock exchange.	Subject to corporate tax, which is 12.5% of worldwide income.	Ability to raise capital from the public, limited liability.	High compliance costs, strict regulatory requirements, public disclosure.
Partnerships (General and Limited)	Subject to corporate tax, and higher regulatory fees.	General Partners: Unlimited liability. Limited Partners: Limited to their contribution.	Taxed at the individual partner level, based on their share of profits.	General Partnerships have no specific regulatory requirements; Limited Partnerships must register with authorities.	Professional services, small businesses.	Simple to establish, flexibility in management, shared responsibility.	Unlimited liability for general partners, potential for disputes, limited access to capital.
Branch of a Foreign Company	A branch established in Cyprus by a foreign company. It is not a separate legal entity but an extension of the parent company.	The parent company is liable for the branch’s activities.	Taxed at the standard corporate rate of 12.5% on profits generated in Cyprus.	Must register with the Registrar of Companies and file annual financial statements.	Foreign companies wishing to do business in Cyprus.	Allows foreign companies to operate in Cyprus, simpler to set up than a subsidiary.	No limited liability, the parent company is fully liable, potential tax implications in the home country.
International Business Company (IBC)	A company that engages primarily in international business activities outside Cyprus.	Limited to the amount of capital invested.	Requires compliance with international regulations, and complex taxation rules.	Must meet the requirements of the Cyprus Registrar of Companies and other regulatory bodies.	International trade, holding companies.	Tax incentives, flexible corporate structure, international credibility.	Flexibility in capital, tax advantages, and regulated framework.
Variable Capital Investment Company (VCIC)	A type of collective investment scheme that allows the capital to vary based on the number of shares issued or redeemed.	Limited to the amount of capital invested.	Taxation depends on the type of investment and may be subject to withholding tax, VAT, and other taxes.	Must be authorized and regulated by the Cyprus Securities and Exchange Commission (CySEC).	Collective investment schemes, fund management.	Asset protection, flexibility in managing and distributing assets, and tax benefits.	Regulatory oversight, complex setup, ongoing compliance.
Non-Governmental Organization (NGO)/Non-Profit Organization	A legal entity set up for charitable, educational, religious, or other public benefit purposes, not for profit.	Generally, no liability for members.	Exempt from corporate tax, but must comply with strict regulations to maintain non-profit status.	Must register with the Registrar of Associations and file annual returns.	Charitable, educational, religious, or community-based organizations.	Tax-exempt status, eligibility for grants, and donations.	Restricted activities, must reinvest profits into the organization, regulatory oversight.
Trust	A fiduciary relationship where one party holds property or assets for the benefit of another.	Trustees must act in the best interests of beneficiaries.	Trusts are generally tax-neutral, but income generated within the trust may be subject to tax.	Must be registered and comply with relevant regulations under the Cyprus International Trust Law.	Estate planning, asset protection, charitable purposes.	Asset protection, flexibility in managing and distributing assets, tax benefits.	Complex to set up and manage, potential tax implications depending on the jurisdiction.
Sole Proprietorship	A business owned and operated by a single individual.	Unlimited personal liability.	Income is taxed at the individual level, based on the owner’s total income.	Simple registration with the Registrar of Companies, fewer regulatory requirements.	Small, low-risk businesses, freelancers, sole traders.	Simple and inexpensive to set up, full control, minimal regulatory burden.	Unlimited liability, limited access to capital, dependence on the owner’s abilities.

The main reason for a Private Limited Company’s popularity is the limited liability protection it offers. The company’s shareholders are liable only within the limits of the share capital, thus protecting their personal property. 

Typically, opening a company in Cyprus for foreigners takes about 8-10 days.

Steps of Company Registration in Cyprus

Opening a company in Cyprus for foreigners involves the following steps:

Cost of opening a company in Cyprus for foreigners

Opening a company in Cyprus for foreigners should be done with the help of lawyers. Lawyers will help to register a company in Cyprus. Depending on the law firm, the services of opening a company in Cyprus for foreigners vary from EUR 1,000 to EUR 4,000.

In addition, the official registration fee from 265 EUR to EUR 495 can be included in the legal services or must be paid separately. The amount of the official registration fee depends on the amount of share capital, the necessity of the documents’ translation, and other factors.

After finishing the procedure of the company registration, don’t forget to register with the tax authorities.

Usually, the registration of the company with the tax authorities is included in the legal registration services.

Requirements for opening a company in Cyprus for foreigners and running it

• Local Representatives. The shareholders and directors of the company can be foreign nationals who are not residents of Cyprus, but the secretary must be a natural or legal person resident in Cyprus. 
• Legal address and office in Cyprus. Another prerequisite is to have a registered legal address and office in Cyprus.
• Annual audit and financial statements. All companies in Cyprus are required to undergo an annual audit and submit financial statements, regardless of whether they have had any activity. The audit must be carried out under international standards by an audit firm or an independent external auditor. All company reports are publicly available.

Cost of accounting and legal support

Based on the requirements described above, the main annual expenses to support the company in Cyprus can be grouped according to the table:

Category	Details	Cost
Annual Audit Requirement	All companies must undergo an annual audit and submit financial statements.	From EUR 600 (based on audit firm size and number of company’s transactions per year)
Registered Office	The annual fee for maintaining a registered legal address.	Around EUR 300 – EUR 900 per year depending on the provider and additional services included
Secretariat	Annual fee for secretarial services.	Around EUR 500 per year
Accounting Fees	Varies depending on the number of transactions and the size of the audit firm.	From EUR 500 (based on accounting or law firm size and number of company transactions per year)
Annual return	This report must be sent every year showing changes in the company during the year, like shareholders, directors, etc.	EUR 100 is an official amount, additional amount can be charged by the accounting team.
Annual Company Fee	The government annual fee is required for all companies registered in Cyprus.	EUR 350 EUR 0* * This payment was canceled in March 2024

Comparison of different banks and financial institutions to open a bank account for your company in Cyprus

The most popular international and local banks in Cyprus include Bank of Cyprus, Hellenic Bank, Eurobank Cyprus, and Astro Bank. Let’s describe the advantages of each of them.

Bank	Description	Advantages	Disadvantages
Bank of Cyprus	The largest bank in Cyprus, offering a wide range of financial services and a strong reputation.	– Extensive network of branches and ATMs nationwide. – Comprehensive range of banking products and services, including loans, mortgages, investment options, and wealth management. – Strong international presence and partnerships.	Potentially higher fees due to its size and market dominance.
Hellenic Bank	Second-largest bank, comprehensive services, competitive pricing.	– Competitive pricing and interest rates on various products. – Focus on customer service and personalized attention. – Wide range of online and mobile banking services.	May have a slightly smaller international network compared to some larger banks.
Eurobank Cyprus	A subsidiary of Eurobank Ergasias, offering a variety of banking products and services.	– Part of a large European banking group with a strong international presence. – Access to cutting-edge technology and digital banking solutions. – Competitive rates and fees for certain products.	May have a steeper learning curve for new customers due to its larger scale.
Astro Bank	A smaller bank with a focus on providing personalized services to corporate clients.	– Tailored solutions for businesses of all sizes. – Competitive rates and flexible terms for loans and financing. – Dedicated account managers for personalized support.	May have a more limited range of services compared to larger banks.

Additionally, Unlimint, Alpha Bank Cyprus, and Piraeus Bank Cyprus can be chosen.

Bank	Description	Advantages	Disadvantages
Unlimint	A payment institution offering innovative financial solutions, including virtual IBAN accounts and payment processing.	– Ideal for businesses that require efficient international payments and currency exchange. – Virtual IBAN accounts for seamless cross-border transactions. – Competitive fees and fast processing times.	May not offer traditional banking services like loans or mortgages.
Alpha Bank Cyprus	A subsidiary of Alpha Bank Group, providing a full range of banking services.	– Part of a large European banking group with a strong international presence. – Access to a wide range of investment and wealth management services. – Competitive rates and fees for certain products.	May have higher fees for certain services compared to smaller local banks.
Piraeus Bank Cyprus	A subsidiary of Piraeus Bank Group, offering various banking products and services.	– Focus on providing comprehensive financial solutions to businesses of all sizes. – Competitive rates and fees for loans and financing. – Access to a wide range of investment and wealth management services.	May have a more complex structure due to its size and international operations.

Other fintech solutions

Sometimes it is complicated to open a bank account in a local bank. In this case, it will be useful to discover online financial platforms. The most popular of them are Stripe, Payoneer, and Revolut.

You can easily open an account here, receive income, and pay expenses using it. In particular, it will be comfortable for remote companies.

Platform	Description	Suitable for	Advantages	Disadvantages
Stripe	A global online payment platform that enables businesses to accept payments from customers worldwide.	Companies accepting online payments, e-commerce businesses, and subscription-based services.	– Global reach and acceptance. – Wide range of payment methods supported. – Easy integration with various e-commerce platforms.	– May have higher fees for certain transactions or currencies. – Requires technical expertise for integration.
Payoneer	A global payment platform that offers a variety of services, including mass payouts, global payments, and online marketplaces.	Businesses making international payments, freelancers, and online marketplaces.	– Competitive rates for international transfers. – Mass payout feature for easy payments to multiple recipients. – Wide range of currency options.	– May have limitations on certain types of payments or currencies. – Requires account verification and may have waiting periods.
Revolut	A fintech platform that offers a variety of financial services, including multi-currency accounts, international transfers, and cryptocurrency trading.	Businesses with international operations, freelancers, and individuals needing to manage multiple currencies.	– Competitive exchange rates and low transfer fees. – Multi-currency accounts for managing funds in various currencies. – Easy-to-use mobile app.	– May have limitations on certain business transactions or large sums. – Not suitable for all types of businesses, especially those requiring traditional banking services.

Advantages of opening a company in Cyprus for foreigners

Cyprus is a very popular country to open a business, and it is understandable why:

Taxation in Cyprus: basic business taxes

Let’s describe the main business taxes in Cyprus.

---

Tax Type	Rate	Details
Corporate Tax	12.5%	One of the lowest corporate tax rates in the European Union.
VAT (Value Added Tax)	19%	A 19% standard rate is applied to most goods and services. A 9% reduced rate is applied to restaurants, hotels, and carriers. A 5% reduced rate is applied to sales of food, pharmaceuticals, and books. A 0% zero rate is applied to export operations.
Capital Gains Tax	20%	Payable on gains from the sale of real estate located in Cyprus or from the sale of shares in companies owning real estate in Cyprus.
Dividend Tax	0%	No tax on dividends in Cyprus.

---

Tax minimisation: Cyprus IP Box Tax Regime

Cyprus cares about business development, so it has a program – Cyprus IP Box Tax Regime.

Qualifying assets to which the reduced rate can be applied under the Cyprus IP-box regime include

• patents,
• copyrighted software, and
• other non-obvious, useful, and novel intangible assets.

These assets must be fully developed in Cyprus by the company’s employees to conduct business or may be acquired/used from an unrelated third party.

The IP-Box does not include trade names, trademarks, image rights, and other intellectual property used for marketing purposes.

The IP-Box regime is available for use by:

• Companies that are tax residents of Cyprus.
• Permanent establishments of foreign companies that pay taxes in Cyprus.

Conclusion

About the Author