Cyprus Company Registration: A Complete Guide

Cyprus has emerged as a top destination for entrepreneurs and expats looking to incorporate their businesses. With its business-friendly environment, attractive tax incentives, and straightforward incorporation process, Cyprus offers an ideal blend of ease and financial advantage for company formation.

This comprehensive guide will walk you through every detail of registering a company in Cyprus. By the end, you should feel confident to complete the process independently – or know exactly how Fidura can help you streamline your Cyprus company setup.

Why Choose Cyprus for Company Registration?

Choosing Cyprus as the base for your company brings numerous benefits that appeal especially to foreign entrepreneurs and freelancers:

• Attractive Tax Regime: Cyprus boasts one of the lowest corporate tax rates in the EU at 12.5%​. This low rate means you keep more of your profits, and certain regimes (like the IP box for intellectual property) can reduce effective tax even further. Moreover, dividends paid to non-resident or non-domiciled shareholders are typically exempt from Cypriot taxes, and there are no withholding taxes on most outbound dividends, interest, or royalty payments.
• Tax Treaties and Global Access: As an EU member, Cyprus provides access to the entire European single market for goods and services​. It has a wide network of double taxation treaties (over 65+ countries)​, including agreements with the UK, USA, Canada, India, and many others. These treaties prevent you from being taxed twice on the same income and make international business more tax-efficient.
• Business-Friendly Environment: The country offers a stable legal framework based on English common law, ensuring transparency and familiarity for investors​. Company incorporation is efficient and fast – typically completed within 7–10 working days​ (often faster with professional assistance). The process can be done remotely, meaning you don’t even have to be in Cyprus to set up your company.
• Financial and Banking Advantages: Cyprus has a modern banking sector with plenty of options for corporate accounts. You can open multi-currency business bank accounts, enabling smooth international transactions​. The banking institutions are used to working with foreign-owned companies, which is ideal for expat entrepreneurs.
• Strategic EU Location: Geographically, Cyprus sits at the crossroads of Europe, Asia, and Africa. Incorporating here places your business within the European Union, benefiting from its regulations and protections, while also serving as a gateway to nearby emerging markets. English is widely spoken in business, making communication easy for expats.
• Personal Tax Benefits for Expats: Beyond corporate benefits, Cyprus offers attractive personal tax incentives. Foreign individuals who become Cyprus tax residents can apply for non-domicile status, which grants 0% tax on worldwide dividends and interest income for up to 17 years. Additionally, the first €19,500 of personal income is tax-free, and there are special 50% income tax exemptions for high-earning expats for several years. This makes Cyprus not just a corporate haven but also a personal tax-friendly location for you as a business owner.

In short, incorporating in Cyprus means a low-tax, high-reward environment within the EU, a supportive legal system, and numerous incentives tailored for international business people.

Types of Companies in Cyprus

Before starting the registration process, it’s important to choose the right type of business entity. Cyprus provides several types of companies and legal structures, each with its own characteristics. Below are the main options, with a focus on those most suitable for freelancers and foreign entrepreneurs:

Private Limited Company (LTD)

The Private Limited Liability Company is the most common business entity in Cyprus and often the best choice for expat freelancers and small business owners. Key features include:

• Limited Liability: Shareholders’ liability is limited to their share capital contribution. Your personal assets are protected in case the company faces debts or legal issues.
• Shareholders: An LTD requires a minimum of 1 shareholder and allows up to 50 shareholders maximum​. A single individual can be the sole owner.
• Directors and Secretary: At least one director is required (no residency or nationality requirements). For a single-shareholder company, one person can act as both director and secretary. If there are multiple shareholders, you must appoint a separate secretary besides a director. Many entrepreneurs use a professional corporate secretary service in Cyprus for compliance.
• Share Capital: There is no large minimum capital requirement. In practice, a typical authorized share capital is around €1,000 (which can be divided into 1,000 shares of €1 each, for example)​. This makes it affordable to start. The capital can be in any currency, not just euros, if needed​.
• Ideal for Freelancers: A private LTD is usually the best option for freelancers and small businesses due to its simplicity, limited liability protection, and ease of management. It also lends credibility when dealing with international clients or partners.

Public Limited Company (PLC)

A Public Limited Company is designed for larger enterprises that may seek investment from the public or a stock exchange listing. Key points:

• Shareholders: Minimum of 7 shareholders is required for a PLC​, with no upper limit.
• Share Capital: A PLC must have a minimum share capital of €25,629 fully paid in before incorporation​. This higher capital requirement and regulatory oversight make PLCs more complex.
• Directors: At least 2 directors are required for a public company in Cyprus​.
• Use Case: PLCs are rarely chosen by freelancers. They are more suitable for substantial businesses planning to raise capital from investors or go public. If you are a solo entrepreneur or a small team, a PLC is likely unnecessary.

Partnerships

Cyprus recognizes both General Partnerships and Limited Partnerships under the Partnerships and Business Names Law​:

• General Partnership: This involves 2 to 20 partners who jointly own and manage the business. All partners have unlimited liability for debts (meaning personal assets are at risk)​. Foreigners can be partners, and the partnership must be registered with the Registrar of Partnerships within one month of formation.
• Limited Partnership: This structure has at least one general partner with unlimited liability, and one or more limited partners who have liability only up to their capital contribution​. Limited partnerships offer some liability protection to the limited partners and can be useful for specific investment projects.
• Suitability: Partnerships might be useful if two or more people want to co-found a business without forming a company. However, for most expat entrepreneurs, an LTD company is preferable to avoid personal liability. Partnerships in Cyprus are not taxed at the entity level (partners are taxed on their share of income), which can complicate personal taxes for foreigners.

Sole Proprietorship

A sole proprietorship (sole trader) is simply a self-employed person operating a business under their own name or a business name. The features are:

• It’s the simplest form of business – just one individual, with no separate legal entity.
• No limited liability: The owner is personally liable for all business debts and obligations​. This means higher risk, as personal assets are not protected.
• Registration: Sole proprietors must still register with the Cyprus Registrar of Companies (under Business Names) and the Tax Department, but the process is simpler than forming a company.
• Use Case: While locals often operate as sole traders for small shops or consultancies, foreign freelancers usually opt for a private company to gain limited liability and a more formal structure. However, if you plan to live in Cyprus and keep your business very small, you might consider this option for its lower maintenance.

Branch or Subsidiary of a Foreign Company

If you already have a company abroad and want a presence in Cyprus, you can set up a branch of the foreign company. A branch isn’t a separate legal entity – it’s an extension of the overseas company in Cyprus. It must be registered with the Registrar of Companies by filing the parent company’s documents (with Greek translations) within 30 days of establishment​.

Alternatively, a Cyprus subsidiary (which is just a local LTD owned by the foreign parent) might be preferable to create a distinct local entity. 

Step-by-Step Guide to Company Registration in Cyprus

Now, let’s dive into the detailed, step-by-step process of registering a company in Cyprus. This section will cover everything from initial preparations to obtaining your incorporation documents and setting up your bank account. Follow these steps closely, and you’ll be able to complete the registration process without needing additional information.

Step 1: Prepare the Prerequisites

Before formally starting the incorporation, make sure you have the prerequisites in place:

• Choose a Company Type: As discussed, decide on the entity type (likely a Private Limited Company for most freelancers).
• Shareholders and Directors: Decide who will be the shareholder(s) of the company. You need at least one. Also determine who will act as director(s). A single person can be the sole shareholder, director, and even secretary if you’re alone. If you have a co-founder, one of you can be director and the other secretary, or you can appoint a professional secretary service.
• Registered Office Address: You must have a physical address in Cyprus to serve as the company’s registered office​. This is where official notices and company records are kept. If you don’t reside in Cyprus, you can obtain a registered address through business service providers (Fidura offers this service to clients).
• Qualified Lawyer or Service Provider: Note that under Cyprus law, only a licensed lawyer can file the incorporation documents with the Registrar​. It’s highly recommended to engage a Cyprus-based corporate service provider or lawyer (which you can do through Fidura) at this stage. They will guide you, prepare documents, and ensure compliance with all legal requirements.
• Gather Required Information: Prepare all necessary personal documents for shareholders and directors: usually copies of passports, proof of address (like a recent utility bill), and any due diligence forms your service provider might need. Also, think about the company’s intended activities, as you’ll need to describe the business purpose for the incorporation documents.

Having these basics sorted out will make the registration process smoother and faster.

Step 2: Choose a Company Name and Get It Approved

Selecting a good name is an early crucial step:

1. Name Selection: Pick a unique name for your company. It must not be identical or too similar to an existing Cyprus company name​. You can search the Cyprus Registrar of Companies database online to check availability. Avoid names that might infringe on trademarks or sound misleadingly like governmental bodies.
2. Name Guidelines: The name must end with "Limited" or "Ltd." (for a private company) to indicate limited liability status. Certain words like “Bank”, “Insurance”, “Trust”, “University” etc., are restricted or require special consent. For example, using "Bank" or "Insurance" in the name would need Central Bank of Cyprus approval due to regulatory sensitivity​.
3. Application for Name Approval: Submit your chosen name (and usually a couple of alternatives in case the first is rejected) to the Cyprus Registrar of Companies for approval. This is often done online via the e-filing system or through your lawyer. A small fee is payable (around €30). Your service provider can handle this on your behalf.
4. Waiting Time: Name approval typically takes 3–5 working days​. The Registrar will review the request and either approve the name or ask for a new submission if it conflicts with an existing name or doesn’t meet the criteria. Using an experienced provider here helps, as they usually know which names will pass or have a list of pre-approved names ready to use to speed up the process.
5. Name Reservation: Once approved, the name is reserved for your use. You should proceed with the next steps fairly soon after, as the name reservation may have a validity period (usually a few weeks).

Tip: Think of a name that is professional and perhaps indicative of your business activity, but have a backup or two just in case. With an approved company name in hand, you’re ready to move forward.

Step 3: Prepare the Necessary Documents

With the company name approved, the next step is preparing all the documentation required for incorporation. Here’s what you’ll need to assemble:

1. Memorandum & Articles of Association (M&A): This is the constitution of the company. The Memorandum of Association states the company name, registered office, objectives (scope of activities), and share capital details. The Articles of Association outline the internal governance rules (shareholder meetings, director powers, etc.). For a standard trading or freelance consulting company, lawyers often use a general-purpose set of objects (since Cyprus no longer requires ultra-specific objects). Key points to decide for the M&A:
   • Objects: A broad description of the business activities. For example, “consulting services in XYZ industry” or simply “any lawful business.” Most choose broad wording to allow flexibility.
   • Share Capital: Define the authorized share capital and its division into shares (e.g., €1,000 divided into 1,000 ordinary shares of €1 each). You’ll also state the initial issued shares and which shareholder subscribes to them (for example, if you are the only owner, you might issue yourself 1,000 shares of €1 each).
   • These documents will be drafted in English (and Greek) by your lawyer/service provider. Ensure they align with any specific agreements between founders if you have partners.
2. Shareholders, Directors, and Secretary Details: Prepare a document or forms listing:
   • Shareholder(s): Name, address, nationality, number of shares each will take.
   • Director(s): Name, address, nationality, occupation of each director.
   • Secretary: Name and address of the company secretary. (This can be a person or a corporate entity. Many use their lawyer’s firm as the company’s secretary for convenience.)
   • There are specific forms (known historically as HE forms) that the Registrar requires: e.g., HE1 (declaration of compliance, usually signed by the lawyer), HE2 (registered office address), HE3 (details of directors and secretary), and HE4 or similar (details of shareholders and share capital). Your service provider will fill these out using the info you provide.
3. Registered Office Confirmation: Documentation or a form confirming the Cyprus address that will be the registered office. If you’re using your provider’s address, they will handle this.
4. Identification Documents: Copies of passports and proof of address for all individual shareholders, directors, and the secretary (if individual) will be needed for the company’s records and anti-money laundering (AML) checks. These typically need to be notarized and apostilled if the individuals are not physically present in Cyprus to show originals. Fidura (or your chosen firm) will guide you on certification requirements.
5. Professional Due Diligence Forms: Expect to fill out a KYC (Know Your Client) questionnaire about the nature of the business, source of funds/investment, and personal background. This is standard procedure as lawyers must gather this info under Cypriot law before they can proceed to file.
6. Power of Attorney (if needed): If you are not in Cyprus, you may need to sign a power of attorney authorizing your lawyer or service provider to submit documents and sign on your behalf for the incorporation process. This document would need to be notarized/apostilled in your home country.

Compiling all these documents might seem daunting, but with a good service provider, you will typically just provide the necessary information and copies of IDs, and they will prepare all the required forms and documents for you. Review everything carefully before submission to ensure names and details are correct.

Step 4: Register with the Cyprus Registrar of Companies

Now comes the actual filing of your company with the authorities:

• Submission of Application: Once all documents are ready, your lawyer will submit the incorporation application to the Department of the Registrar of Companies and Official Receiver (the official name of the registry). This can be done electronically via the e-filing system or in person. The submission includes:
  • The approved company name and reference number from step 2.
  • The Memorandum & Articles of Association (signed by the initial shareholder(s) and the lawyer).
  • Forms detailing directors, secretary, registered office, and share capital.
  • The lawyer’s declaration (confirmation that requirements of the Companies Law have been met).
  • Government filing fee and capital tax: The standard registration fee is roughly in the range of €350 – €550 depending on authorized capital (for €1,000 capital it’s around the lower end). There’s also a nominal stamp duty on share capital (approximately 0.6% of authorized capital, which on €1,000 is just €6). Your service provider usually handles these payments and will invoice you.
• Review by Registrar: The Registrar’s office will review the submission. Thanks to digital processes, this is quite efficient. If everything is in order and the name was pre-approved, incorporation is typically approved within about 5–10 working days. In many cases, your company can be registered in as fast as one week.
• Certificate of Incorporation: Once the Registrar approves, they will issue the Certificate of Incorporation, which is the official proof that your company now legally exists. Along with this, you can obtain additional official certificates such as:
  • Certificate of Shareholders – listing the registered owners.
  • Certificate of Directors and Secretary.
  • Certificate of Registered Office. These are often bundled in an incorporation package. They will be in Greek and English and bear the Registrar’s seal. Your provider will get these for you.
• Company Number and Registry Listing: Your company will be assigned a unique registration number (HE number) and will be listed in the Cyprus company registry. You can now call yourself the proud owner of a Cyprus company!

At this stage, your company is legally formed. However, there are a few more steps to make it fully operational.

Step 5: Register for Tax (Income Tax & VAT)

After incorporation, there are important tax registrations to complete:

• Tax Identification Code (TIC): Every Cyprus company needs to register with the Tax Department to obtain a Tax Identification Code (TIC) for corporate income tax purposes. Your accountant or service provider typically does this by submitting Form TD2001 (Registration of Company) to the local tax office. You should do this within 60 days of incorporation. This registration will also mark the company as a tax resident of Cyprus (assuming management and control are in Cyprus, which if you have local directors or conduct board meetings in Cyprus, it will be).
• Social Insurance Employer Registration: If you plan to hire employees in Cyprus or even pay yourself a salary as the director, the company must register as an employer with the Social Insurance Department. This involves getting a Social Insurance Number for the company and will obligate you to contribute to social insurance and related funds for any salaries paid (more on this in the compliance section).
• VAT Registration: Value Added Tax (VAT) is a tax on sales of goods and services. Cyprus’s standard VAT rate is 19%​. Not all companies need to register for VAT immediately:
  • If your business activities are likely to have an annual turnover exceeding €15,600 in taxable sales (within Cyprus or to the EU) in any 12-month period, you are required to register for VAT​. This threshold is fairly low, so many businesses will register from the start.
  • If you will be providing services to clients in other EU countries, you may need a VAT number to comply with EU reverse-charge rules (even if under the threshold, you might opt to register voluntarily).
  • VAT registration is done by filing form VAT 101 (or via the online TAXISnet system) and can usually be completed in a couple of weeks. Once registered, you’ll get a VAT number (starting with CY) and you’ll have to charge VAT on applicable sales and file quarterly VAT returns.
  • If your business is only providing services outside the EU or other VAT-exempt activities, and revenue is below the threshold, you might delay or avoid VAT registration, but consult your accountant on this.
• Other Tax Registrations: If your company will employ staff, you should register for PAYE (Pay As You Earn) to remit employees’ income tax and social contributions. Also, consider registering on TAXISnet (the online tax portal) for easy filing of future returns.

By completing tax and VAT registrations, you ensure your new company is compliant and ready to operate. Ignoring this step could lead to penalties, so it’s best done immediately after incorporation.

Step 6: Open a Corporate Bank Account

With your company formed and tax registrations underway, you’ll want a corporate bank account in Cyprus to conduct business, receive payments, and pay expenses:

• Choose a Bank: Cyprus has several reputable banks such as Eurobank Cyprus, Revolut Business, Bank of Cyprus, Hellenic Bank, as well as international banks and electronic money institutions. Research which bank suits your needs (consider things like online banking quality, fees, and whether they understand freelancers’ business models).
• Account Opening Process: Opening a bank account typically requires:
  • Completed bank application forms (your provider can often arrange this).
  • KYC documents: Similar to incorporation, banks will ask for passports, proof of address of directors/shareholders, and a description of the business.
  • Company documents: You must provide certified copies of your Certificate of Incorporation, Memorandum & Articles, and certificates of directors, shareholders, and registered office. Banks often require these to be recent certified copies (apostilled or certified by the Registrar or a notary). Your service provider can supply a bank-introductory pack with all necessary certified documents.
  • Board Resolution: A resolution from the company’s board of directors approving the opening of the account and specifying authorized signatories. If you’re the sole director, this is straightforward – you’ll sign a resolution yourself.
• In-Person or Remote: Some banks might require you (as the principal shareholder/director) to meet an officer in person for identification, either in Cyprus or at a foreign branch/representative office. However, many banks in Cyprus are accommodating international clients and may offer remote account opening, especially if a corporate service provider vouches for you. Be prepared for a possible video call for due diligence.
• Multi-Currency & Online Banking: Most Cyprus banks provide accounts in multiple currencies (EUR, USD, GBP, etc.) under one account or sub-accounts. You will get internet banking to manage the account online, which is crucial if you’re an expat handling finances from abroad.
• Timeline: Account approval can take anywhere from a few days to a few weeks, depending on the bank’s compliance procedures. Plan for about 1-2 months in general.
• Alternatives: If a traditional bank is slow, consider electronic payment institutions in Cyprus or the EU (like Revolut Business, Wise, etc.) as an interim solution. But ultimately, having a local Cyprus bank account is beneficial for local transactions and establishing substance or even a requirement for certain functions like payroll.

Once your corporate account is open, you can deposit your share capital (if you haven’t already) and start running your business financially. Congratulations – you’re almost there!

Step 7: Ensure Initial Legal Compliance

Before you shift into full business mode, double-check a few final items to stay in good legal standing:

• Display Company Name and Registration Number: As per law, your company name (and number) should be displayed at the registered office, and on company correspondence and invoices include the company’s name, number, registered address (and place of incorporation, which is Cyprus).
• Contracts and Invoices: Start using your company’s name for all business dealings. Any contracts or invoices should now be under the company’s name (with the company number on formal docs like invoices). This clearly separates your personal capacity from the company.
• Licenses or Permits: Depending on your business activity, check if you need any special licenses. Most freelance activities (IT consulting, marketing, design, etc.) don’t require specific licenses in Cyprus. But if you were, say, opening a restaurant or offering financial services, you’d need relevant permits. Always verify for your specific industry.
• Accountant and Record-Keeping: Arrange for bookkeeping from day one. Save all expense receipts and sales invoices. It’s wise to hire an accountant or use an accounting software to track income and expenses. Cyprus companies must maintain proper accounting records and start preparing for that first annual audit (as early as 12-18 months after incorporation). Setting up your accounting system early will save headaches later.
• Official Stationery: Obtain company stamps (chops) and official stationery as needed. While not legally required, many businesses use a stamp with the company name and number when signing documents.
• Immigration Status (if applicable): If you, as an expat, plan to relocate to Cyprus to run your company, ensure your visa or residency permit is in order. Cyprus offers a few options like the business visa or even a "Digital Nomad Visa". Additionally, with your new company, you might qualify to apply for a residency permit as a company owner. This isn’t part of company registration per se, but it’s something to plan for if relocation is in your plans.

At this point, your Cyprus company is not only registered but also fully set up to start doing business. You’ve got your paperwork, tax IDs, and bank account sorted. The next focus will be on running the business and staying compliant each year, which brings us to the next section.

Taxation for Cyprus Companies

Understanding the tax obligations and benefits for your Cyprus company is crucial for successful and compliant operations. Cyprus is well-known for its favorable tax regime, which is a major reason entrepreneurs choose this jurisdiction. Here’s what you need to know:

• Corporate Income Tax: The standard corporate tax rate in Cyprus is 12.5% on net profits​. This rate applies to worldwide income for companies that are tax resident in Cyprus (which your company will be, if managed and controlled from Cyprus). The 12.5% rate is one of the lowest in the EU, significantly lower than many Western European countries where rates range from 20–30% or more. For a freelancer’s company, this means you can optimize your earnings by paying a low corporate tax on profits and then consider how to extract income (salary vs dividends) efficiently.
• Tax Exemptions and Deductions: Cyprus tax law provides a number of exemptions and incentives:
  • Dividends Received: Most dividends received by a Cyprus company from foreign subsidiaries can be tax-exempt (subject to certain holding and active business conditions). This is useful if you use your Cyprus company as a holding company.
  • No Capital Gains Tax (CGT) on Securities: If your company sells shares, bonds, or other securities, any profit is not subject to capital gains tax, except for gains related to real estate in Cyprus. So if you one day sell shares of a subsidiary or your business, Cyprus won’t tax that gain (unless it involves Cyprus real estate)​.
  • IP Box Regime: Cyprus offers an Intellectual Property regime where qualifying IP income (patents, software, etc.) enjoys an effective tax rate as low as 2.5%​. This may not be directly relevant to most freelancers, but if you develop intellectual property, it’s a noteworthy benefit.
  • Loss Carryforward: If your company incurs losses in the first years, those losses can be carried forward and deducted from future profits for up to 5 years, reducing taxable income when you do become profitable.
• Withholding Taxes: Cyprus does not impose withholding tax on dividends paid to non-residents, and no withholding on interest payments abroad. Royalties paid to non-Cyprus residents for use of IP outside Cyprus are also tax-free from Cyprus side. This means you can repatriate profits or pay out to yourself (if you’re non-resident) without Cyprus cutting a tax from it. (Note: If you as an individual are Cyprus tax resident, dividends you receive from your company are exempt from income tax, but might be subject to a 17% defense tax—however, if you qualify as non-domiciled, even this is waived. Many expat business owners use the non-dom status to avoid tax on dividends entirely​.)
• Value Added Tax (VAT): As covered earlier, the standard VAT rate is 19% in Cyprus​. Once your company is VAT-registered, you’ll charge 19% VAT on your local Cyprus sales or EU sales of services/goods (unless zero-rated or exempt). You will periodically file VAT returns (usually quarterly) to either pay the net VAT due or claim a refund if your input VAT (on purchases) exceeds output VAT (on sales). Some notes:
  • VAT for Freelancers: If you’re selling services internationally (e.g., online consulting to clients abroad), many of those services might be zero-rated (outside scope) or subject to reverse charge, meaning you might often be in a refund position. Talk to an accountant to structure invoicing correctly.
  • VAT Threshold: Remember the €15,600 turnover threshold for mandatory registration​. If you expect to exceed this in a year (which is likely if it’s your full-time business), register for VAT promptly to avoid penalties.
  • Reduced Rates: Some activities have reduced VAT rates (5% or 9%) – for instance, certain food, medicines, or services like hotel accommodation are lower. Unlikely relevant for typical freelance services, but good to be aware if your company diversifies.
• Double Taxation Treaties: Cyprus’s extensive network of double tax treaties (68 treaties)​ ensures that if your company earns income from another treaty country, you won’t pay tax twice. For example, if you have clients in a treaty country that withhold some tax at source, you can often get a credit for that tax against your Cyprus tax. Treaties also often reduce foreign withholding taxes on payments to your Cyprus company. This network is very beneficial for international business optimization and is a cornerstone of Cyprus’s attractiveness.
• Personal Tax Considerations: While this guide is focused on company registration, as an owner you should note:
  • If you draw a salary from your company and you are Cyprus-tax-resident, that salary will be subject to personal income tax (progressive rates from 20% up to 35% for income over €60k). However, new residents often can claim a 20% or 50% tax exemption on their employment income for several years (e.g., 50% exemption for income over €100k for 10 years, and a new scheme allows 20% exemption or €8,550 (whichever lower) for lower incomes).
  • Non-Domiciled Status: If you qualify as non-dom, dividend income and passive interest you receive from your company are exempt from the special defense contribution tax (SDC) for 17 years, effectively making them tax-free to you personally​. This is a huge incentive to take profits as dividends rather than salary, for example, if you reside in Cyprus.
  • Social Insurance: Salary paid to you or employees triggers social insurance contributions (details in the next section), but dividends do not. Many expats balance a small salary (for living expenses and to contribute to social insurance) with dividends.
• Annual Corporate Tax Returns: Your company will need to file an annual corporate income tax return (form IR4) and pay any tax due by the following year (the tax year in Cyprus is the calendar year, and tax returns are typically due by July of the next year when filed electronically). Provisional tax payments are made in two installments during the tax year (31 July and 31 December) based on estimated profits, with a final balancing payment by August of the next year. Your accountant will handle this, but it’s good to be aware of the timeline.

Cyprus’s tax system is one of the most favorable in Europe, combining low rates with a broad range of exemptions. By adhering to the rules and leveraging the incentives, your company can significantly optimize its tax burden. Always consult with a Cyprus tax advisor or accountant to tailor the tax strategy to your situation and to stay updated on any changes in tax laws.

Ongoing Company Compliance and Maintenance

Registering your company is just the beginning. To keep your Cyprus company in good standing (and avoid fines or penalties), you must fulfill ongoing compliance obligations. Fortunately, Cyprus’s compliance requirements are straightforward and manageable, especially with the help of local professionals. Here’s a breakdown of what you need to maintain annually and periodically:

• Annual Returns (HE32) to Registrar: Every Cyprus company must file an Annual Return with the Registrar of Companies, typically accompanied by the latest financial statements. The Annual Return (known as form HE32) includes updated information on shareholders, directors, registered office, etc. The first annual return is due within 18 months of incorporation and then once every calendar year thereafter​. Essentially, you hold an Annual General Meeting (AGM) of shareholders and then file the return within 14 days of that meeting​. In practice, your secretary or service provider will prepare this. Missing annual returns can lead to fines or even strike-off, so mark this date.
• Annual Financial Statements and Audit: Cyprus companies are required to maintain proper accounting books and records and prepare annual financial statements in accordance with International Financial Reporting Standards (IFRS). Importantly, auditing is mandatory for all companies, regardless of size. You must appoint a licensed Cyprus auditor who will audit the financial statements each year​. The audited accounts need to be ready in time to accompany the annual return and to file with the Income Tax Department as well. While an audit might sound burdensome for a small freelancer company, Cyprus audit firms are accustomed to small companies and typically provide a relatively cost-effective service for straightforward accounts. Ensure that you keep all invoices, receipts, and bank statements to make the audit process smooth.
• Corporate Tax Filing: As mentioned in the Taxation section, an annual corporate tax return must be filed, and any tax due must be paid. This is usually handled by your accountant. Pay attention to provisional tax deadlines during the year to avoid any 10% surcharge for underestimation.
• VAT Returns: If your company is VAT-registered, you’ll need to file quarterly VAT returns (due by the 10th of the second month following each quarter, e.g., 10 May for Q1). Even if you had no sales or expenses in a quarter, you must file a nil return. Compliance with VAT is important to avoid fines, and it also keeps your refund claims flowing if you have any.
• Employer Obligations (If Hiring or Paying Salary): Should you hire employees or pay yourself a salary as director:
  • You need to run a monthly payroll. This involves calculating net pay after deductions, withholding the employee’s income tax and social contributions, and remitting those along with the employer’s contributions to the tax and social insurance authorities.
  • Social Insurance and related contributions: Both the company and the employee contribute to the Social Insurance Fund. As of 2024, the social insurance contribution rate is 8.8% for the employer and 8.8% for the employee on salaries​, up to a salary ceiling (around €5,551 per month in 2025)​. The employer also pays small percentages to other funds: 2% Social Cohesion Fund (no ceiling), 1.2% Redundancy Fund, 0.5% Training Fund, and around 2.9% to the National Health System (GESY)​. The employee also pays 2.65% to GESY​. In summary, if you have employees or pay yourself, roughly an additional ~15% on top of gross salaries will go to the state funds from the employer side (and a similar ~11% from the employee side via withholding). These contributions are typically due monthly.
  • PAYE (Pay-As-You-Earn) tax: Employee income tax must be withheld and paid to the Tax Department monthly. You’ll also submit an employer’s return (IR7) annually detailing salaries paid.
  • If you’re the only person working in the company and you prefer not to draw a salary (living perhaps off savings or dividends), you might avoid these payroll formalities, but do consider that being on payroll can contribute to future social insurance benefits (like pension, healthcare).
• Annual Company Fee: Good news – Cyprus recently abolished the annual company levy of €350 as of 2024​. Previously, every company had to pay this fee to the Registrar each year. This is no longer required, which simplifies compliance and saves cost. (If you had companies from past years, unpaid levies for 2011–2023 would still need to be settled, but for new companies moving forward, you won’t have this charge.)
• Maintaining a Registered Office and Officials: You must continuously maintain a registered office in Cyprus (if you change address, you must file with Registrar) and have at least one director and a secretary at all times. If any changes occur (director resignations, new shareholder, etc.), you are required to inform the Registrar of Companies by filing the appropriate forms (within 14 days of change for directors/secretary, and for share transfers via allotment or transfer forms). Always notify your service provider of such changes so they can handle the filings.
• Record Keeping: Keep minutes of important meetings (AGMs, any directors’ decisions), updated registers of shareholders, directors, and minutes at the registered office. Ensure that company letterhead, website, and emails display the company’s full name, number, and registered address as required by law.
• Renewal of Services: If you’re using third-party services for your company (like a registered address service, secretarial service, or nominee services), remember to renew these annually. Fidura, for instance, provides annual packages that include registered office and compliance monitoring – make sure to stay subscribed to avoid any lapse (e.g., if your registered office service isn’t renewed, you’d technically be in violation of the Companies Law).
• Auditor and Accounting Maintenance: You’ll reappoint an auditor each year (usually the same firm unless you change). It’s wise to have ongoing bookkeeping (monthly or quarterly) rather than leaving everything to year-end. This way, VAT and tax compliance is easier and you avoid a last-minute scramble.

Staying on top of these compliance tasks is not as overwhelming as it might seem – most are annual or periodic routine tasks. If you have engaged a corporate administrator or accounting firm, they will usually send reminders for upcoming deadlines. Many entrepreneurs simply opt for a managed service (for example, Fidura’s Company Management Service) where professionals handle all these filings and remind you of payments, so you can focus on your business. Remember, a compliant company is a trustworthy company – it preserves your good standing, which is crucial for banking and for any future sale or investment into your business.

Conclusion

By following this guide, you have all the information needed to register and operate a company in Cyprus, from the big-picture advantages to the minute details of compliance. Cyprus offers a warm welcome to international entrepreneurs, and with the right partner and knowledge, you’ll find the journey rewarding and the process surprisingly straightforward. Here’s to your business success in Cyprus! 🚀