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Cyprus Company registration with Operational Office. Subsequent administration of the company

We offer Cyprus company registration. Type of company: Private company limited by shares. Structure: local director and shareholder (client’s director can be appointed additionally) + client’s shareholder. Subsequent administration of the company. Substance. Services and fees.

Major advantages of doing business in Cyprus

Not an offshore jurisdiction (not on the Ministry of Finance’s blacklist);

Principles common to English law;

Relatively low corporate tax rate (12.5%);

No withholding tax on outgoing dividends;

No tax on incoming dividends either;

No capital gains tax (for example, when members withdraw from, or sell their shares in, the company);

Enables to create a structure where the country of incorporation, residence of the director and country of the bank account[1] coincide (requirement of most banks and counterparties);

Wide network of double tax treaties;

Enables to create substance and acquire a tax resident status, which has become a vital element of international taxation.

Budget for setting up business in Cyprus with substance

Services
Fees (EUR, not including VAT)
Total cost of incorporation (including preparation and provision of original constitutive documents and apostilled copies of such documents)
2400
Assisting with bank account opening in Cyprus
from 1100
Office rent in Cyprus for 1 year
from 3960
Total:
from 7460

Time frame for setting up business in Cyprus

Company incorporation – 2 to 5 weeks;

Bank account opening – from 1 month (depending on the bank).

Company incorporation

Incorporation of a Cyprus Private Company Limited by Shares includes the following steps:

1. Selecting

· Company name to be checked for its availability (at least three names)**, such name:

  • can be in Greek or English;
  • must not be identical or similar to the name of an existing company;
  • must end with a suffix denoting the type of entity (“LIMITED” or “LTD”);

· Company structure (director, shareholder, beneficial owner, attorney);

· Share capital and distribution of shares between members (by default, the company will be incorporated with 1000 shares of EUR 1 each);

· Activity and geography of business.

2. Paying fees for services

3. Providing documents for directors / shareholders / beneficial owners / attorneys

The list of required documents is supplied separately.

4. Preparing a package of documents for company incorporation

having the documents signed by the directors and members. Sending the necessary set of documents to Cyprus.

5. Filing an application for company incorporation with the Registrar

The incorporation of a new company in Cyprus takes 4 to 5 weeks after filing with the Registrar, which time includes the making of an apostilled set of documents. If acceleration fee is paid, the incorporation time can be reduced to two weeks (depends on the current workload of the Cyprus authorities).

The documents delivered to the client upon Cyprus company incorporation include:

  1. Certificate of Incorporation – copy certified by the Registrar and apostilled;
  2. Certificate of Registered Office – original signed by the Registrar and apostilled;
  3. Certificate of Director and Secretary – original signed by the Registrar and apostilled;
  4. Certificate of Shareholders – original signed by the Registrar and apostilled;
  5. Memorandum and Articles of Association – English version (translated from Greek and certified by the company’s Secretary), and Greek and English versions under apostilled affidavit;
  6. Written resolution of the subscriber appointing the director – apostilled original;
  7. Minutes of the first meeting of the Board of Directors – original;
  8. Share Certificate – original;
  9. Company seal.

Subsequent administration of the company

Annual Levy

Cyprus companies must pay to the Registrar an Annual Government Levy of EUR 350. A company must pay this levy before 30 June each year starting from the year of incorporation. If a company is registered after 30 June, it must pay the levy before 30 June in the year following the year of incorporation.

Late payment attracts penalties:

  • 10% of the levy amount if the delay is not more than 2 months;
  • 40% of the levy amount if the delay is 2 to 5 months.

For a failure to pay the levy, a company can be struck off the register. Strike-off is not the same as dissolution and can be revoked by court order within 20 years. Upon restoration, a company is restored to the same status it had immediately before the strike-off and with the same officers appointed. If a company is struck off without filing audited accounts, the director carries a risk of facing claims from the Tax Department.

The annual payments also include fees for provision of secretary, registered office, and professional directors/shareholders (if any in the company).

Financial Statements and Audit

Under section 142(1) of Companies Law, Cyprus companies must prepare and submit audited financial statements in accordance with International Accounting Standards. This is a statutory requirement irrespective of whether the company conducted any business or not. If the company remained dormant, the auditors must prepare and submit dormant accounts.

A company must submit returns to the tax authorities within one year of the financial year-end.

Cyprus companies that have subsidiaries (more than 50%-owned) must prepare consolidated financial statements for the group. Exemption is granted to the so-called small and medium-sized groups where:

  • total balance sheet (total value of assets without deducting liabilities) does not exceed EUR 20 000 000;
  • net turnover does not exceed EUR 40 000 000;
  • average number of employees in the financial year does not exceed 250 people.

A group must meet at least two of these three criteria. In addition, there are two general conditions to be fulfilled for the above exemption to apply:

  • such companies are not public, meaning that their shares are not traded on any stock exchange;
  • preparation of consolidated financial statements is not mandated by any other legislation.

Tax Return

In addition to annual financial statements, all Cyprus companies must before 31 July of each financial year submit a provisional tax return showing the estimation of their profit in the current year. Based on this return, the company must pay provisional corporate tax (if there is any profit declared) in two equal instalments – by 31 July and 31 December in the same year. It is also possible to submit a tax return to the tax office only once, paying straight away the entire declared sum of provisional corporate tax. Adjustments to the provisional tax return can be made before 31 December.

The main tax return must be submitted to the tax office within 12 months of the financial year-end, i.e. before 31 December of the year following the financial year.

The corporate tax rate is 12.5%.

VAT

Account should be taken of VAT matters as well. In most EU countries, Cyprus included, VAT registration is not obligatory until the sales turnover within the country exceeds the registration threshold, which is EUR 15 600 in Cyprus. But a voluntary VAT registration is possible.

The general VAT rate in Cyprus is 19%.

VAT registration becomes mandatory in the following cases:

  • there are reasonable grounds to believe that the taxable turnover will exceed the registration threshold in the following 30 days (for example, a contract is made);
  • at the end of the month the total value of taxable transactions in the preceding 12 months has exceeded the registration threshold;
  • the company receives services which are subject to reporting under the reverse charge method the total value of which exceeds the registration threshold.

Upon VAT registration and allocation of the VAT number, a Cyprus company must prepare and submit a VAT return every quarter and pay resulting VAT within 40 days of the end of the VAT period.

To assess the company’s tax burden, we recommend seeking tax advice (which can be arranged upon request).

Register of Beneficial Owners

On 23 February 2020, amendments to the Prevention and Suppression of Money Laundering and Terrorism Financing Law (2007) came into force in Cyprus, introducing a public register of beneficial owners and a number of new requirements for companies to file beneficial ownership information.

Full and unrestricted access to the register is provided to certain government authorities of the Republic of Cyprus, whereas all other persons can only access the following information by making a request for a fee (EUR 3.50 per company):

  • name;
  • month and year of birth;
  • citizenship;
  • country of residence;
  • nature and scope of control.

Any changes must be filed with the Registrar within 14 days. In addition, the company must annually confirm the accuracy of the information contained in the register.

Physical presence in the country of incorporation (SUBSTANCE)

Postal Service

The postal service includes:

  • provision of postal address (the address can be publicly stated as postal address);
  • receiving mail, sending notifications of receipt (within the first three business days of each month);
  • scanning up to 5 pages per month;
  • one monthly shipment of mail to the Moscow office of GSL Law & Consulting.

The postal service fee is EUR 635 per year + VAT, including one monthly shipment to the Moscow office of GSL Law & Consulting. Additional courier shipments of documents from the Cyprus office are payable in accordance with the invoices. Scanning and sending by email any more documents than 5 pages per month (if necessary) is subject to an additional charge of EUR 10 per page + VAT.

Phone Number

SIM card

A SIM card with a local Cyprus number allows receiving and making calls to/from other countries as part of international roaming.

A local SIM card costs EUR 235 + VAT, plus courier delivery costs. When sending a SIM card to Russia, there may be additional difficulties at the customs. Please ask your GSL Law & Consulting consultant for more information and term of delivery.

Individual telephone line

The telephone line service includes:

  • installation of a telephone line with an individual phone number;
  • forwarding of Cyprus calls to a local SIM card (that allows call forwarding outside Cyprus).

The fee for arranging an individual telephone line (IP telephony) is EUR 800 + VAT. The cost of procuring a local SIM card is EUR 235 + VAT, plus courier delivery costs.

All incoming and outgoing calls are paid for separately based on monthly bills. Where necessary, it is possible to provide a service of a receptionist taking calls and recording a summary of the call. The scope of services is to be discussed additionally depending on the needs of the client.

Renting an Office in Cyprus

The fastest and easiest was to create the company’s substance in Cyprus is renting an office at GSL Law & Consulting premises: small offices with an area from 8 to 16 sq. m are available at DigeniAkrita 58-60, GHINISBUILDING, 9thFloor, Office 901, 1061, Nicosia, Cyprus.

The fee for making an office rent agreement without physically placing there an employee is EUR 330 per month + VAT. The fee for renting an office with physically placing there an employee is from EUR 330 per month + VAT depending on the size of the premises.

The rent fee with physical placement of an employee includes:

  • Furniture: 1 desk, chairs (1 chair for the workstation, 1 chair for visitors), a filing cabinet;
  • Air conditioner;
  • Wireless Internet;
  • Stationery;
  • Room cleaning once a week;
  • All utility expenses (water, electricity, Internet and general building maintenance costs);
  • WC and the use of a kitchenette;
  • GSL’s meeting room is freely available;
  • Messenger (1 errand a day within Nicosia);
  • Printer available for use;
  • Receptionist (receiving and sending mail, assistance in organizing office work).

Payment is made for 6 or 12 months in advance.

When physically placing an employee in the office, an initial deposit equal to a monthly rent is charged. The deposit is required to cover possible damage and, if none, is returned to the tenant upon expiry of the rent. The details of equipment and office use should be agreed individually.

Finding and Renting a Separate Office

The cost of renting your own office with a separate address depends on the size and location of the premises. The minimum rent, on average, is from EUR 330 per month + VAT for a small office (10-15 sq. m)without a receptionist. Our fee for finding an office space and making a rent agreement is EUR 900 + VAT. The fee includes the search for premises according to the parameters designated by the client, description and provision of information and photos, signing of an office rent agreement, and delivery of keys.

Equipping the office and doing other work to prepare it for opening (installing a telephone, connecting the Internet, placing furniture, etc.) is to be agreed individually.

Recruiting

Upon request, our staff can assist with recruiting a director who has the necessary qualification in a specific field or area of business, and other employees to be hired by the company. The recruiting fee is 20% of the annual income of the hired employee + VAT. Before any work is undertaken, we require a retainer of EUR1000.

The minimum salary for a business manager starts at EUR 500 per month (part-time), for a director – at EUR 1000 per month (full-time). The tax and duties will depend on the total income of the employee.

Cyprus Work and Temporary Residence Permit for Foreign Employees

If foreign employees move to Cyprus to be hired by a Cyprus-registered company, a work and temporary residence permit will be required. A company that rents or owns an office in Cyprus becomes eligible to attract foreign employees. Our fee for accelerated registration of a company with the Migration Department (7 days) and obtaining of a work and temporary residence permit for one employee (up to 30 days) is EUR 2800 + VAT. More details about opening an office and hiring your staff in Cyprus can be provided upon request.

FEES***

Services
Fees (EUR, not including VAT)
Company Incorporation and Subsequent Administration
Total cost of incorporation (including compliance fee, preparation and provision of original constitutive documents of the company and apostilled copies of such documents, share issue documents, and common seal)
2400
Annual administration (starting from the second year), not including compliance fee
1200
Nominee director and shareholder (for 1 year, including one apostilled power of attorney)
1140
Annual Government Levy payable to the Registrar (not including late payment penalties)
350
Filing of the register of beneficial owners:
- initial filing
350
- annual filing
350
- filing of changes (change of beneficial owner, change of personal data, etc.)
220
Certificate of Good Standing
295 (original)
550 (apostilled original)
Certificate of Incumbency
255 (original)
755 (apostilled original)
Tax Residency Certificate
410 (original)
665 (apostilled original)
Copy of Certificate of Incorporation issued by the Registrar
295
Obtaining from the Registrar a Certificate of Directors/Shareholders/Registered Office
295 (original)
550 (apostilled original)****
Obtaining from the Registrar a certified copy of Memorandum & Articles of Association
750
Notarial certification and apostille of a document
500
Change of company name (including preparation of documents and obtaining the original Certificate of Name Change)
860
Amendment of the company’s Articles of Association
from 975
Preparing documents to change Director/Shareholder, not including compliance fee
1090
Courier delivery from Cyprus
105
Compliance fee
Payable in the cases of:
- renewal of a company,
- liquidation of a company,
- transfer out of a company,
- issue of a power of attorney to a new attorney,
- change of director/shareholder/beneficial owner, except the change to a nominee director/shareholder)
250 (standard rate, includes the check of 1 individual);
+ 50 for each additional individual (director, shareholder, or beneficial owner) or legal entity (director or shareholder) if such legal entity is administered by GSL;
+ 100 for each additional legal entity (director or shareholder) if such legal entity is not administered by GSL;
350 (rate for high-risk companies, includes the check of 1 individual)
Preparing and submitting dormant accounts
1140
Preparing and submitting non-dormant accounts
100 – 350 per hour (depending on time spent)
Creating Substance
Postal service for 1 year, includes 1 shipment per month to the Moscow office of GSL Law & Consulting
635
SIM card
235
Installation of an individual telephone line with call forwarding to a local SIM card
800
Calls
Per operator’s tariffs
Subsequent IT support of the telephone line (if necessary)
EUR 100 per hour
(depending on time spent)
Renting an Office in Cyprus
Office rent agreement without physical placement of an employee
from 330 per month
Office rent agreement with physical placement of an employee (terms to be agreed separately)
from 330 per month
Renting a Separate Office
Agency fee for finding an office space (one-off)
900
Rent
330 per month
Fee for applying for a work and temporary residence permit for a foreign employee
2800
Fee for recruiting staff
from 20% of the annual salary
Making an employment agreement
from 170
Minimum salary (not including taxes or duties)
from 500 per month
Payroll services provided by accountants/auditors:
- registration with the social insurance fund
- making paperwork for the employee

650
350

Local Director Company Management Fees
Option 1
· Signing documents (when necessary)
· Making payments through Internet banking (up to 10 payments per year)
3000 per year
Option 2
· Signing documents (when necessary)
· Making payments through Internet banking (up to 10 payments per month)
6000 per year
Option 3
· Appointment as director
· Availability on the phone 8 hours a day. Availability in the office upon request.
· Sending correspondence to related parties:
- forwarding emails (up to 10-20 emails per month);
- forwarding mail to the designated address (when necessary);
- forwarding fax messages (when necessary).
· Issuing invoices to counteragents (up to 5 invoices per month)
· Making payments through Internet banking (up to 15 payments per month):
- administrative expenses;
- household expenses;
- other payments.
· Keeping documents in the office (invoices, contracts, bank statements etc. both electronically and physically) and, possibly, cooperating with auditors during the preparation of annual accounts.
Ready to attend negotiations with counteragents (not included in the fee)
13 200 per year

*In most cases, substance in Cyprus is required.

**The Registrar can reject any name that it considers inappropriate or that coincides with or is similar to the names of existing Cyprus companies.

***The fees are valid as of the date of sending of this offer. The invoices will include 19% VAT on the services rendered, except Annual Levy and tax payments.

****Price per certificate.

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