Legislation of Cyprus

Legal system

Based on English common law, with civil law modifications

Types of entity

Private company limited by shares,
Exempt private company,
Public company limited by shares,
Company limited by guarantee,
Branch of overseas company,
General partnership,
Limited partnership,
Sole Proprietorship,
Trust

Shelf companies permitted

Yes

Incorporation timescale for a new company

15 to 25 working days (3 to 6 working days with payment of acceleration fee)

Company suffix

Limited; Ltd.

Sensitive words

Asset Management, Asset Manager, Assurance, Bank, Banking, Broker(s),Brokerage, Capital, Credit, Currency(ies), Custodian(s), Custody, Dealer(s), Dealing, Deposit(s), Derivative(s), Exchange, Fiduciary(ies), Finance, Financial, Fund(s), Future(s), Insurance, Lending, Loan(s), Lender(s), Option(s), Pension(s), Portfolio, Reserve, Savings, Security(ies), Stock, Trust, Trustees

Cyrillic alphabet permitted in company name

No

Local registered office

Yes

Local registered agent

No

Information to be kept at the registered office

Register of directors and secretaries; register of members; books containing the minutes of any general meeting; register of holders of debentures; copies of instruments creating charges and mortgages, register of charges, book of mortgages, other

Seal required, type of seal

Every Cyprus company must have a seal with its name engraven in legible characters on it. A company whose objects require or comprise the transaction of business in foreign countries may also have for use in any territory, district, or place an official seal, which shall be a facsimile of the common seal of the company, with the addition on its face of the name of every territory, district or place where it is to be used.

Redomiciliation (to, from) permitted

Permitted

Minimum number of directors

1

Residency requirements for directors

No

Corporate directors permitted

Yes

Directors’ meetings/frequency/location

No requirements

Disclosure to local agent

Yes

Disclosure to public

Yes

Company secretary required

Yes

Residency requirements for a secretary

No

Qualified secretary required

No

Corporate secretary permitted

Yes

Minimum number of shareholders

1

Residency requirements for shareholders

No

Corporate shareholder permitted

Yes

Meetings/frequency/location

Yes / annually / no requirements

Disclosure to local agent

Yes

Disclosure to public

Yes

Beneficiary info disclosure to

No

Minimum authorized share capital

No

Minimum issued share capital

1 share

Minimum paid share capital

No requirements

Authorized capital payment deadlines

No requirements

Issued capital payment deadlines

Immediately upon issue or according to the terms of issue specified in the relevant resolution

Standard currency

EUR

Standard authorized share capital

1 000

Standard par value of shares

1

Shares with no par value permitted

No

Bearer shares permitted

No

Personal tax

0-35%

Сorporate tax

12,5%

Corporate tax (in detail)

—

Capital gains tax

12,5%

Capital gains tax. Details

Cyprus companies are considered tax resident in Cyprus and are subject to Cyprus tax on their worldwide income if they are managed and controlled in Cyprus. It is also planned to introduce a rule according to which companies incorporated in Cyprus must be recognized as tax residents of the country. Cyprus companies are taxed at a rate of 12,5%

VAT

19%

VAT. Details

VAT is paid on the sale of goods and services, as well as the purchase of goods and services from the EU countries, and the import of goods into Cyprus from non-EU countries. The legislation provides for 3 rates of VAT: the basic rate is 19%, in some cases, reduced rates of 9% and 5% are provided

Withholding tax

0% (dividend), 0% (interest), 10% (royalty)

Other taxes

Special defense contribution tax, Social insurance contributions, Immovable property transfer fees

Exchange control

No

Government fee

Yes, but exemptions apply

Stamp duty

Yes

Requirement to prepare accounts

Yes

Requirement to file accounts

Yes

Publicly accessible accounts

Yes

Requirement to file Annual Return

Yes

Publicly accessible Annual Return

Yes

Audit required

Yes

Location

An island in the north eastern Mediterranean Sea

Total area

9 250 sq. km

Population

1 256 107 (2023)

Capital

Nicosia

National currency

Euro

Conditional reduction of currency

EUR

Against USD

1,08 (2024)

Climate, average max and min t°

Mediterranean with hot, dry summers and cool winters; avg. maximum temperature (August) +35°; avg. minimum temperature (January) 0°

Time difference from Moscow

No

Dialing code

357

State language

Greek and Turkish

Ethnic groups

Greek Cypriots 77%; Turkish Cypriots 18%; other minorities 5%

Literacy rate

97% (2021)

History

The first human settlement on Cyprus can be traced to around 10,000 BC and by 3,700 BC the island was well inhabited. It fell successively under Assyrian, Egyptian, Persian, Greek, and Roman domination. For 800 years, beginning in 364 AD, Cyprus was ruled by Byzantium. After brief possession by King Richard I (the Lion-Hearted) of England during the Crusades, the island came under Frankish control in the late 12th century. It was ceded to the Venetian Republic in 1489 and conquered by the Ottoman Turks in 1571. The Ottomans applied the millet system to Cyprus, which allowed religious authorities to govern their own non-Muslim minorities. This system reinforced the position of the Orthodox Church and the cohesion of the ethnic Greek population. Ottoman rule of the island lasted for three centuries until control was given to the United Kingdom in 1878. Many of the Turks who had settled on the island stayed there, though a lot subsequently left in the 1920s following the formal annexation of the island by the United Kingdom in 1914 and its becoming a crown colony status in 1925. Cyprus gained independence in 1960 following years of guerrilla struggle against the British rule. Tensions between the Greek Cypriot majority and Turkish Cypriot minority came to a head in December 1963, when violence broke out in the capital of Nicosia. Despite the deployment of UN peacekeepers in 1964, sporadic intercommunal violence continued forcing most Turkish Cypriots into enclaves throughout the island. In 1974, a Greek Junta-sponsored attempt to seize control of Cyprus was met by military invasion from Turkey, which soon controlled more than a third of the island. In 1983, the Turkish-occupied area declared itself the ‘Turkish Republic of Northern Cyprus’, but it is recognized only by Turkey. The election of a new Cypriot president in 2008 served as the impetus for the UN to encourage both the Turkish Cypriot and Greek Cypriot leaders to reopen unification negotiations. In September 2008, the president of the Republic of Cyprus, and the Turkish Cypriot leader started negotiations under UN auspices aimed at reuniting the divided island. The talks are ongoing and the leaders continue to meet regularly. The entire island entered the EU on 1 May 2004, although the EU acquis - the body of common rights and obligations - applies only to the areas under direct government control, and is suspended in the areas administered by Turkish Cypriots. However, individual Turkish Cypriots able to document their eligibility for Republic of Cyprus citizenship legally enjoy the same rights accorded to other citizens of European Union states.

Credit rating

BBB

Government type

Presidential republic

Executive branch

Council of Ministers appointed jointly by the President and Vice President

Legislative branch

Unicameral parliament: House of Representatives (80 seats; 56 assigned to the Greek Cypriots, 24 to Turkish Cypriots, but only those assigned to Greek Cypriots are filled; members are elected by popular vote to serve five-year terms)

Judicial branch

Supreme Court (judges are appointed jointly by the President and Vice President)

Unemployment

6,7% (2023)

GDP per capita rank

32 (2021) IMF List

Corruption perceptions index rank

Corruption Perception Index - 51 (2022)