There are many benefits to incorporating a company in Cyprus. Some of the main advantages include:

• Cyprus is a member of the European Union (EU) – helping to better facilitate business activities throughout the EU and Europe in general. The regulatory regime of Cyprus is in full compliance with the requirements of the EU and OECD, and adheres to International Financial Reporting Standards (IFRS) for the preparation of financial statements. This ensures transparency and comparability with financial statements of companies globally, which is also a requirement for the financial reporting of international Groups of companies and for Consolidated Financial Statements purposes.
• Ideal geographical location at the crossroads of global regions – Europe, Africa and the Middle East-Asia.
• One of the lowest corporate tax rates in Europe, plus many other exemptions for both corporations and individuals, as well as a great deal of incentives for investments, such as for innovative companies and the exploitation of intellectual property, maritime/shipping, as well as across many other sectors.
• Extensive network of treaties with over 60 countries for the avoidance of double taxation and provide tax relief for cross-border activities.

Cyprus offers one of the most attractive tax regimes in the European Union (EU) and wider Europe, with one of the lowest corporate tax rates at 12.5%. With tax planning and the right structure, the effective tax rate can be further reduced significantly. Specific rates and regulations can vary, however, so it’s advisable to consult with a local accounting expert for the most accurate and up-to-date information.

Yes, Cyprus offers several tax incentives, including exemptions on certain types of income, deductions for expenses, and benefits for companies engaged in research and development, shipping, and intellectual property exploitation.

The standard VAT rate in Cyprus is 19%. There are also reduced rates of 5% and 9% for certain goods and services, and some items/services are zero-rated or exempt from VAT, such as when providing services to approved non-profits and of course, services to VAT registered entities in other EU countries – VIES.

Personal income tax rates in Cyprus are progressive, ranging from 0% to 35%. The tax brackets are as follows:

• Up to €19,500: 0%
• €19,501 - €28,000: 20%
• €28,001 - €36,300: 25%
• €36,301 - €60,000: 30%
• Over €60,000: 35%

Certain exemptions exist to the above, such as 50% tax exemption on salaried income of over EUR 55,000 for the first 10 years of residing in Cyprus, exemptions from dividend taxes for ‘non domiciled’ individuals, plus many others.

To open a company in Cyprus, the company needs to have a locally registered office, a secretary, and at least 50% of the board of directors to be Cyprus tax residents. There is no obligation that the ultimate beneficial owner/shareholder is residing in Cyprus.

Generally, the process involves a number of steps. This includes: selecting a company name and submitting for approval; preparing memorandum and articles of association; submitting the necessary documents to the Cyprus Registrar of Companies and obtaining a tax identification number. Additionally other registrations might be required, including VAT registration, Social Insurance/Employer registration, among others.

The process must be done with a representative here in Cyprus. Our firm can assist with each step of this process, including incorporation of the company through our legal associates, together with accounting and auditing services thereafter.

Yes absolutely, accounting/audit firms such as ours have expertise in international tax planning, with established systems and networks, and can help companies optimise their tax obligations and planning globally, while ensuring compliance with local and international laws.

Accounting services we provide here Optimus Actus include: Incorporating a company through our legal associates; bookkeeping; payroll and social insurance processing; VAT and VIES reporting; tax planning, financial statement preparation auditing and compliance, representation and consulting; advisory services for business structuring and financial management; bank introducing and support services; and due diligence, feasibility studies and other ad hoc professional services.