Overview of Company Formation in Cyprus
The standard vehicle is the private company limited by shares (Ltd).
Share capital. No statutory minimum — €1 is legally sufficient. €1,000–€5,000 is the practical norm and presents better to banks. Capital duty of 0.6% was abolished in 2018.
Shareholders. Minimum one, individual or corporate, any nationality or residence.
Directors. No residency requirement in law — but a Cypriot-resident majority board is normally essential to establish Cyprus tax residency and obtain a tax residency certificate.
Company secretary. Mandatory.
Registered office. Mandatory, in Cyprus.
Public disclosure. Directors, secretary, registered office and registered shareholders are published by the Registrar of Companies.
UBO register. Registration within 90 days of incorporation; annual confirmation between 1 October and 31 December. Public access to the register has been suspended since 23 November 2022 following the CJEU ruling — the data is held by the Registrar and accessible to authorities and obliged entities.
Timeline. Name approval approximately 5 business days; incorporation and document preparation 2–3 weeks in total. Expedited name approval is available.
On structure: in the current transparency environment, the simpler the ownership chain, the easier the banking. Interposing a corporate shareholder without a clear commercial reason adds due-diligence friction and rarely earns its keep.
Ready-made companies. We maintain a stock of previously registered, never-traded companies. Transfer, including preparation and delivery of the standard document set, takes approximately 1–2 weeks. An up-to-date list is available on request.
Cyprus Is Not an Offshore Jurisdiction
Cyprus has income tax and was removed from the EU’s watchlist of non-cooperative tax jurisdictions on 20 February 2024. Its advantages are real, but they are conditional on the company being genuinely resident and genuinely managed on the island. Three points worth stating plainly before you plan a structure:
Ownership is on the public record. The Registrar publishes the company, its director, its secretary and its registered shareholders.
Beneficial owners must be declared to the Registrar’s UBO register. Public access is suspended, but authorities and obliged entities retain it.
Audited accounts and tax filings are mandatory. Structures that exist only on paper are the ones failing bank onboarding and losing treaty benefits.
One of the reasons Cyprus works is that substance is inexpensive here relative to other EU jurisdictions — office rent, staff and a management team physically on the island cost less than almost anywhere else in the Union. If a fully offshore structure is what you had in mind, it is worth reading why that model has changed across most of the world before choosing a jurisdiction.
Company Formation in Cyprus and Types of Activities
Company in Cyprus is a good option to perform the following activities:
International trading;
Import-export transactions with other EU and non-EU countries;
Holding activities – receiving and payment of dividends, income in the form of interest, with access to the EU Parent-Subsidiary Directive and an extensive treaty network;
E-commerce business, with OSS/IOSS registration handled through Cyprus for all 27 member states;
Forex brokerage and other CySEC-regulated activity, including investment firms and fund managers;
Shipping and logistics, under the EU-approved tonnage tax regime — see also yacht and vessel registration;
Ownership of intellectual property (special regime of taxation of intellectual property – IP Box), alongside trademark registration and patents;
Group financing, with the Notional Interest Deduction on new equity preserved under the 2026 reform.
Company Formation in Cyprus and Taxation After the 2026 Reform
Cyprus enacted its most significant tax reform in over two decades, effective 1 January 2026. Any guide still quoting 12.5% corporate tax or a €350 annual levy is out of date. The figures below are current as of August 2026.
Corporate Income Tax — 15%
Raised from 12.5% for tax periods beginning on or after 1 January 2026, aligning Cyprus with the OECD Pillar Two global minimum. Companies whose non-calendar tax year began in 2025 remain on 12.5% for that entire period.
Cyprus-resident companies are taxed on worldwide profits; non-resident companies on Cyprus-sourced income only. Income from trading in securities and dividends received remains outside corporate tax.
All companies incorporated in Cyprus are now deemed Cyprus tax resident unless a double tax treaty provides otherwise. Management and control still matters for treaty purposes and for foreign tax authorities, so a Cypriot board and real decision-making on the island remain the practical requirement.
Annual Levy — Abolished
The €350 annual levy payable by every Cyprus company was abolished with effect from 2024. Companies that had already paid for that year received refunds.
Arrears for the years 2011 to 2023 remain payable, with the penalties that applied at the time. If an older company has an unpaid levy history, it should be cleared before any restructuring, redomiciliation or bank application — it will surface in due diligence.
Dividends and the Special Defence Contribution. This is where the reform delivers the most value:
Deemed Dividend Distribution abolished for profits earned from 1 January 2026. Companies can now retain and reinvest profits without the old 70%-within-two-years deeming rule and the 17% charge that followed it. Transitional rules keep DDD alive for undistributed 2024 and 2025 profits through to 31 December 2027.
SDC on actual dividends cut from 17% to 5% for Cyprus tax resident and domiciled individuals, on distributions out of post-2026 profits. Dividends from pre-2026 profits stay at 17% if paid on or before 31 December 2031 — so the profit pool a distribution comes from now needs to be tracked by year.
Non-domiciled individuals continue to pay 0% SDC on dividends, interest and rents for their first 17 years of Cyprus tax residency. The reform preserved this regime unchanged and added an option to extend it for two further five-year periods against a lump-sum payment.
SDC on rental income abolished entirely.
New defensive withholding taxes: 17% on dividends and certain payments to associated entities in blacklisted jurisdictions, 5% for low-tax jurisdictions.
New disguised-dividend rules: where value passes to shareholders or connected persons below market value, a 10% charge may apply. Arm’s-length pricing and documentation in shareholder transactions now carry real consequences.
Worked example — Cyprus-domiciled owner, post-2026 profits: €100 of taxable profit becomes €15 of corporate tax, leaving €85 distributable, on which €4.25 of SDC is due. Total effective rate on distributed profit: 19.25%, down from 27.65% before the reform. For a non-domiciled owner, the only charge is the corporate 15%.
Withholding Tax
Charged at source in Cyprus when a resident company pays income to a non-resident:
– Dividends in favour of a non-resident – 0%;
– Interest in favour of a non-resident – 0%;
– Royalties in favour of a non-resident – 0% if the intellectual rights are used outside of Cyprus, and 10% if they are used in Cyprus.
The new defensive measures for blacklisted and low-tax jurisdictions apply on top of these rates.
Special Tax Regime IP BOX
Where several conditions are met, 80% of qualifying profits from the ownership of intellectual property is exempt from corporate tax, and the remaining 20% is taxed at the standard rate — an effective rate of approximately 3% (it was 2.5% while corporate tax stood at 12.5%).
The regime is nexus-based. Benefits may be used provided that the Cyprus company has been involved in the creation of these intellectual property rights and its main activity is related to that IP, with relief proportionate to its own qualifying research and development expenditure. Buying in finished IP and parking it in Cyprus does not qualify.
Capital Gains Tax — 20%
Applies only to gains from the disposal of immovable property situated in Cyprus, and to shares in companies that hold such property.
Gains from the disposal of securities, including shares in foreign companies and income from foreign securities, are exempt. Tax-free thresholds were raised under the reform.
Other Changes Under the Reform
– Crypto asset disposals are taxed at a flat 8% where the gains form part of the company’s taxable business profits. Mining income does not qualify, and losses are ring-fenced to the same year.
– Tax losses now carry forward for 7 years, extended from 5.
– The 120% super-deduction for research and development expenditure is extended to 2030.
– Stamp duty on documents was abolished from 1 January 2026.
– The Notional Interest Deduction on new equity is preserved.
And the point most providers skip: low Cyprus tax is not the same as low tax for you. Your own country of residence may tax the company through controlled foreign company rules, or treat it as resident where it is actually managed. We assess both sides before recommending a structure.
Company Formation in Cyprus and Value Added Tax (VAT)
The standard rate is 19%; reduced rates of 9%, 5% and 3% apply to specified categories. Exports and intra-EU B2B supplies are zero-rated. VAT depends on the field of activity of the company.
Registration for VAT can be either voluntary or mandatory. Mandatory VAT registration occurs when the company achieves one of the following factors:
The total amount of taxable supplies exceeds €15,600 in any rolling 12-month period — registration is due within 30 days;
The total volume of intra-EU acquisitions exceeds €10,251.61;
The company receives B2B services from abroad under the reverse charge — effectively a €0 threshold.
On distance sales to EU consumers. The former €35,000 threshold was replaced on 1 July 2021 by a single EU-wide threshold of €10,000. Above it, you charge the customer’s national rate and either register in each member state or file a single quarterly OSS return through Cyprus. IOSS covers imported consignments up to €150.
If the above thresholds are not reached, the company can apply for voluntary registration, justifying the need for a VAT number by the transactions in the future. This is usually worth doing if your customers are EU businesses or you carry significant input VAT.
After the registration of a company in Cyprus is completed, VAT returns are submitted quarterly. The return is due by the 10th day of the second month following the end of the quarter — a deadline that catches out companies used to a “month following” rule — and must be filed even if the company had no transactions in that period. Late registration attracts €85 per month plus interest and backdated VAT.
The companies that provide services or supply goods to EU companies that are also registered for VAT are obliged to register in the VAT Information Exchange System (VIES) and submit monthly VIES reports, regardless of turnover. The VIES report contains information on all sales of goods and services by the Cyprus company and must be submitted within 10 days of the end of the reporting month.
Late submission of the VIES report, or provision of an incorrect VAT number of the buyer or customer, entails penalties of €51 per month for each report. You can check the VAT number of the buyer or customer on the official website of the European Commission — do it before invoicing, not after.
Our colleagues, Cypriot auditors, will help you to fulfil the requirements for preparation and to submit reports on time. In order to do this, the company must provide copies of the invoices of sale, purchase and other documents confirming the expenses incurred in the reporting period with the EU countries.
Company Reporting in Cyprus
Companies registered in Cyprus are obliged on an annual basis to:
Prepare audited financial statements — or, for financial years beginning on or after 6 February 2026, an ISRE 2400 review engagement instead of a full audit, where turnover is at most €300,000 and total assets at most €500,000 for two consecutive years. The turnover threshold was raised from €200,000;
Submit a corporate income tax return (T.D.4) to the tax authorities of Cyprus on the basis of those accounts;
File an Annual Return (HE32) with the Registrar of Companies within 28 days of the annual general meeting;
Confirm UBO data with the Registrar between 1 October and 31 December;
File quarterly VAT returns and monthly VIES reports, where the company is registered for VAT.
The fiscal year is equal to the calendar year (from 01.01 to 31.12). The filing calendar changed under the reform: the tax return and the final self-assessment payment now both fall due on 31 January of the second year following the tax year — for the 2026 tax year, that means 31 January 2028, replacing the former 31 March filing and 1 August payment dates. Provisional tax instalments continue during the year.
The Companies Law of Cyprus provides that the directors of companies must ensure that proper books of accounting are kept which are necessary for the preparation of financial statements, give a true explanation of the transactions, enable the financial position of the company to be determined with a reasonable accuracy at any time, and include supporting documents including contracts and invoices. The auditor has the right to request additional information that will allow them to prepare statements most accurately.
Company Formation in Cyprus
and Bank Account Opening
Before you start with company formation in Cyprus it’s worth to consider bank account opening. Cyprus banks apply full risk-based due diligence, and the account is the bank’s decision alone. In order to open an account in Cyprus you will need:
Justification of the source of income and wealth of the ultimate beneficiary owner (UBO) — the two are assessed separately;
Provision of a complete and convincing set of KYC documents in relation to the UBO;
For companies older than a year – reports for at least the last year and the company’s balance sheet for the date of opening an account;
The bank must understand the field of the company’s activities and the commercial usefulness of transactions conducted by the company;
Banks will be more willing to open accounts for companies with physical offices and working staff in Cyprus;
Links to the public sources regarding the activities of the company and biographies of participants;
Professional letters of recommendation, including one from a bank;
Confirmation of payment of personal income tax by the UBO in the country of their tax residence;
Account statements in other banks and information about the assets owned by the UBO and the signatory, and the relevant documentary evidence.
Where a commercial bank is not the right fit, licensed EU payment and e-money institutions are a legitimate alternative, and a merchant account may be needed alongside. We will not promise a guaranteed account, and no honest provider will.
Company Formation in Cyprus or Company Redomiciliation to Cyprus?
In simple terms, it is the transfer of a company from the jurisdiction of primary registration to an alternative jurisdiction with the company retaining all assets, rights and obligations. All business relations of the company are preserved in full. The company does not cease to exist, but transfers its registered office to another country.
The change of domicile can be useful for companies whose functioning is difficult due to recent changes in the offshore industry, but the liquidation of the company is not possible — for example, the company owns assets, litigation is ongoing, licences or contracts would not survive a transfer, or the corporate history itself has value.
Cypriot legislation allows redomiciliation both to and from Cyprus, which relatively few EU states permit. For the transfer to happen, it is necessary that the legislation of the country of primary registration allows the change of domicile.
For groups still holding a BVI, Cayman, Seychelles or similar entity that no longer serves a clear commercial purpose — particularly where economic substance rules have eroded the original rationale — moving into Cyprus is usually faster and cheaper than incorporating fresh and transferring assets. Cyprus is not the only destination worth considering: Hong Kong opened its own inward redomiciliation regime in 2025, and the right answer depends on where the group’s operations sit. Restructuring and redomiciliation is a core Private Financial Services practice area, and we assess both sides of the move.
Company Formation in Cyprus and Services We Provide
Our services for Cyprus companies:
Company formation in Cyprus, including ready-made companies;
Legal address and Secretary service in Cyprus;
Nominee services where there is a genuine commercial reason for them;
Bank accounts opening in Cyprus;
Legal support in Cyprus;
Assistance in obtaining licenses in Cyprus, including CySEC-regulated activity;
Accounting and audit services in Cyprus;
VAT, OSS/IOSS and VIES registration and filing;
Mergers and acquisitions, restructuring;
Redomiciliation into and out of Cyprus;
Liquidations in Cyprus;
Assistance in obtaining residence permits in Cyprus and with the non-domicile regime.
Corporate service providers in Cyprus are licensed under Law 196(I)/2012 by CySEC, ICPAC or the Cyprus Bar Association. Verify any provider’s licence before engaging them — an unlicensed intermediary is one of the fastest routes to an AML refusal at the bank.
Cyprus, Estonia or Lithuania?
All three come up in the same conversation, and they solve different problems:
Cyprus suits holding structures, intellectual property, regulated finance, shipping, and owners who intend to relocate personally — the non-domicile regime gives 0% on dividends, interest and rents for 17 years, and substance is inexpensive to build;
Estonia suits businesses that reinvest rather than distribute: corporate tax is deferred until profits are paid out, and administration can be run remotely through e-Residency;
Lithuania suits early-stage companies wanting low cash tax — 0% for the first two tax periods, then 7% for small companies — and anyone pursuing an EMI, payment institution or MiCA crypto licence.
The decision usually turns on two questions: where will you personally be tax resident, and will you distribute or reinvest? We work through both before recommending anything.
If the European Union is not where your customers are, the calculation changes entirely — see company formation in Hong Kong for Asian operations, or our overview of crypto licensing jurisdictions for digital asset projects outside the EU.
Lots of well-known businessmen and entrepreneurs from all over the world have already opened their companies in Cyprus and benefited from all the advantages of having a company in Cyprus. Private Financial Services has been registering companies in Cyprus and providing full support to Cyprus companies for over 20 years, and our first company was registered in Cyprus back in 2002.
We, at Private Financial Services, take care of you and your business!