Cyprus is an advanced European business destination that has become an advantageous holding company jurisdiction due to its tax regime, business-friendly laws, and strategic location. Opening a holding company in Cyprus has several advantages, including access to a wide range of tax treaties with other nations, lower tax rates, and several other incentives that make it a hub for holding companies in Europe. This article outlines the steps required for opening a holding company in Cyprus.
Step 1: Choosing your company structure and name
In Cyprus, there are four main types of company structures that you can choose from when starting a holding company. These are limited liability companies (LLCs), public limited liability companies, partnerships, and sole proprietorships. However, the LLC structure is the most preferred and is widely used by entrepreneurs looking to open a holding company in Cyprus. The LLC structure provides legal protection to its members’ personal assets, and it also requires less capital compared to other structures.
Once you have chosen your company structure, the next step is to choose your company name. The company name must not be offensive, misleading, or already registered by another company in Cyprus. You can check if the name you have chosen is available by conducting a name search with the Cyprus Registrar of Companies.
Step 2: Register your holding company and obtain a tax identification number (TIN)
The registration process in Cyprus is straightforward and streamlined, and you can register your holding company with the Cyprus Registrar of Companies. To register your company, you will need to provide the following documents:
• Articles of Association and Memorandum of Association
• Certificate of Incorporation
• Name of Directors and Secretary
• Registered address
• Statement of participation in the company
• Certificate of good standing
Once you have submitted these documents and paid the relevant fees, the Registrar of Companies will issue the necessary documents, including the certificate of incorporation, and your company will be officially registered. At this point, you can apply for a tax identification number (TIN) from the Cyprus Tax Department.
Step 3: Open a bank account
The next step is to open a bank account for your holding company. There are several banks in Cyprus that offer traditional banking services to holding companies. Before you open a bank account, ensure that you have all the necessary documents, including the certificate of incorporation, company documents, directors and signatories’ identifications, and proof of residence.
Step 4: Obtain necessary licenses
Once you have opened a bank account, the next step is to obtain any necessary licenses for your holding company. Depending on your business activities, you may require additional licensing to operate in Cyprus. For instance, if you plan to conduct financial services or operate a regulated business, you will need to obtain the necessary licenses from the relevant regulatory authorities in Cyprus.
Step 5: Hire a professional services provider
To ensure that your holding company complies with all the local laws and regulations, it is advisable to hire a professional services provider such as Fast Offshore. The professional service provider can help you with financial accounting, tax compliance, and other corporate services, thus ensuring that your holding company operates smoothly.
Step 6: Comply with tax and legal requirements
Cyprus has a favorable tax regime for holding companies and offers several tax advantages for companies operating in the country. Holding companies in Cyprus are subject to a corporate tax rate of 12.5%, which is lower than many other European countries. Additionally, Cyprus has signed several double taxation treaties with other nations, thus providing further tax incentives for holding companies operating in the country.
To comply with legal and tax requirements, holding companies in Cyprus must submit annual tax returns and financial statements to the Cyprus Registrar of Companies. Additionally, holding companies must maintain accurate accounting records, including a balance sheet, income statement, and cash flow statement, and hold regular board meetings to document decisions taken.
Final Thoughts
Opening a holding company in Cyprus has several advantages, including access to tax incentives, access to a wide range of tax treaties with other nations, lower tax rates, and several other incentives that make it a hub for holding companies in Europe. However, to ensure that your holding company complies with local laws and regulations, it is essential to work with professional advisors experienced in company incorporation and compliance in Cyprus. Fast Offshore has been helping businesses get started in Cyprus, and other jurisdictions, for many years. We offer custom and off-the-shelf packages with something for every budget. To find out more, contact us today!