Cyprus

The most popular company incorporation for tax planning in Cyprus is Private Limited Company (LTD).


The minimum number of directors and shareholders is one director and one shareholder who can be both individual person and legal entity, resident or non-resident of Cyprus. One person can be both director and shareholder of the company. To be advised if a Cypriot company has at least one resident director, it will allow to use the benefits of double taxation avoidance agreement between Cyprus and other countries.


The minimum amount of announced authorized capital of a Cypriot company is € 1 000. Proposed authorized capital is € 1 000 and is divided into 1 000 shares with par value of € 1.


Taxation:

  • Dividends in favor of individuals who are tax resident of Cyprus – 15 %;
  • Value added tax (VAT) – 0-15 %;
  • Profit tax of Cypriot resident companies – 12,5 %;
  • Passive interest income – 10 %;
  • Rental income – 3 %.


Accounting and audit.


Every registered company of Cyprus must submit annually financial statements to the Companies House and tax returns to the Tax office.


Financial statements includes:

  • Director's report;
  • Balance;
  • Profit and loss statement;
  • Explanatory note to the balance sheet and statement of profit and loss;
  • Auditor's report (in case if obligatory or voluntary audit was performed);
  • Consolidated statements (in case if Cypriot company has subsidiary companies and isn’t released from submitting of consolidated statements);
  • Statement of cash flows and other statements, explanatory information which is included at the discretion of auditors of the company and directors.


Tax returns of Cypriot company is divided into:

  • Main which should be submitted at the end of the year;
  • Intermediate which should be submitted before the 31st of July of the current year.


Financial statements and tax returns (for corporate tax) is submitted for one year after the end of the financial year of the company.

All Cypriot registered companies must pay an annual fee in an amount of € 350. The annual fee shall be paid beginning from year of state registration. The fee shall be paid to the Registrar of companies no later than the 30th of June of each year.


Information about the directors and shareholders is publicly available in the register of companies.


Advantages:

  • Cyprus is a member of the EU;
  • Good taxation conditions;
  • Private Limited Company can be a holding company and can be used for international trade, assets protection, as investment company etc.


Disadvantages:

  • It’s necessary to prepare and submit annually an auditor’s financial report of the company.