The Republic of Cyprus is located in the Mediterranean Sea south of the Anatolian Peninsula. One part of this Island country has Greek connections, while the other part is dominantly Turkish, thereby often confusing being part of Europe or Asia. Cyprus is part of the EU, and despite the strong Turkish connections, it is indeed part of Europe.
The major deriving factor of the economy in Cyprus remains high-end luxury tourism, while other contributing sectors are natural minerals like gypsum, wood and metal products, textile, light chemicals, ship repairs, and stone products.
Under the Companies Act of Cyprus, three types of companies are permissible, these are further subdivided into different formats. The below structure explains the formats and sub-formats of legitimate business types:
- Company limited by shares
- Public limited companies
- Private companies
- Exempt private company
- Limited private company
- Companies limited by guarantee
- Unlimited companies
The table below represents the basic details of the types of formats given above:
| S# | Type of business structure | Local name | Min. paid-up capital |
| 1. | Public Limited Company | Cyprus PLC | €26,000 |
| 2. | Private Limited Company | Cyprus PVT. Ltd. | No minimum paid-up capital required |
| 3. | Unlimited Company | Cyprus Unlimited Company | No minimum paid-up capital required |
Cyprus private limited
A private limited company is by far the most commonly registered business format in Cyprus, or elsewhere for that matter. Salient features such as no minimum capital requirement, protection from personally compensating the company’s loss and debts, simple management structure requirements, and ease of operations are some advantages that attract small and medium enterprises to register as private limited companies.
A PLC can be registered for goods, services, import/export, or any other business activity as long as it is not violating any commercial or social laws of the country.
Cyprus unlimited company
An unlimited company is where the owners assume full responsibility in the event of foreclosure, loss, solvency, or default. The owners are bound to compensate the shareholders for the losses through personal assets and company assets. There is no minimum required paid-up capital for such an entity, however, it is recommended that at least €1,000 must be deposited as paid-up capital before registration.
An Unlimited Company is registered at the Companies House of Cyprus and most of its features are similar to a private limited company apart from the part where responsibility is assumed in a personal capacity by the owners. The advantage of such a format is that the owners need not disclose the entirety of their capital to the registrar; hereby freeing the company to file annual accounts.
Cyprus plc
A public limited company essentially gathers its capital through public money. The process starts by pledging a certain sum to a commercial bank which in return authorizes the company to distribute the pledged amount into shares. The shares are then offered to the public at a premium value which is different from the face value. The difference in price is the capital gained by the company while the face value proceeds go to the bank in repayment.
Mostly favored by businesses that require large capital in a short time period, a PLC is bound to make its dealings, accounts, and management changes public through its website and the commercial gazette.
Costs involved in setting up business in Cyprus
While the actual costs and expenses incurred to establish any format of business in the country depend on the size of the company, the depth of management, and the country of origin, there are 4 basic costs that must be budgeted while planning.
- The registration or setup fee
- The ongoing company maintenance fee
- Accounting & auditing cost
- Entry in the registrar of companies
Company registration cost
The first step of the registration process is to submit an application to the Registrar of Companies, along with all the required documents (depending on the structure of the business). The application must also accompany the paid receipt of the registrar fee; depending on the selected business format the fee ranges from €500 to €1800.
It is a one-time setup cost and does not recur unless the company changes to a different business format. For a private limited company, the registration fee is €350 not including the stamp duty which is €90.
Annual maintenance fee
Companies require an official address for official correspondence and operations. This registered address must also be registered at the time of registering the company. The annual maintenance fee is a state fee that includes the services of nominees, directors, and the registered office.
The breakup of the fee is as under:
- Yearly fee for registered office – €250
- Nominees are individuals who hold shares on shareholders’ behalf, the fee for nominees is – €250
- Directors of the company must be natural persons, the fee for a director annually is – €400
- The company secretary may be a natural person or a corporate body, the fee annually is – €250
- State levy’s registered agent fee on all companies registered in Cyprus, which is – €250
Accounting & audit fee
Companies are required to present their annual accounting for state and private audits except those exempted due to the business format, as in the case of unlimited companies. Public limited companies are even required to publicize their accounts after verification for general public consumption.
The accounting and auditing fees largely vary on the size and model of the business, for instance, a small company with an annual turnover of €1million or less may end up paying €2000 annually for account and audit purposes.
Entry into the registrar of companies
The Registrar of Companies in Cyprus is a state department that is responsible to maintain the record of all the companies registered in the country. The department also issues a verification certificate to the public to lend authenticity to the company.
The registrar’s office charges fees to obtain certificates, depending on the type of certification requested, the fee may be between €125 to €150 per certificate.
Advantages of registering a company in Cyprus
Among the many advantages of having a company registered in Cyprus, we have selected the most attractive from an investor’s perspective.
- Lowest tax rates in Europe
- Double tax treaties with many countries
- Located strategically
- Robust and modern infrastructure
- The modernized banking system and amenities
- Low cost of setup and operations
- Access to European and Asian markets
- Business incentives for foreign investors
You may also find these articles helpful
Guide on company registration in Cyprus
VAT number registration in Cyprus – full guide
Guide on company liquidation in Cyprus
