Incorporating a holding company in Cyprus can be a profitable and strategic move for businesses seeking to establish a presence in Europe. A holding company is an entity that primarily owns and manages the assets and investments of other companies, commonly known as subsidiaries. A holding company in Cyprus offers a favorable tax regime, an attractive EU regulatory environment, and gives access to the EU market.
This article provides a step-by-step guide to incorporating a holding company in Cyprus.
Step 1: Choose a company name and legal entity
The first step in incorporating a holding company in Cyprus is to choose a company name and legal entity. The company name must be unique and not similar to any existing company names registered with the Cyprus Registrar of Companies. The legal entity can be a private limited liability company, a public limited liability company, a partnership, or a sole proprietorship.
Step 2: Prepare the Memorandum and Articles of Association
The Memorandum and Articles of Association are the legal documents that define the purpose and structure of the holding company. The Memorandum of Association provides details about the company’s objectives, share capital, and shareholders’ liability. The Articles of Association cover the rules for the company’s operation, including the appointment of directors, the distribution of profits, and the holding of meetings.
Step 3: Appoint a Company Secretary
A company secretary is a key member of the management team of a holding company. The company secretary is responsible for ensuring that the company complies with legal and regulatory requirements, including the maintenance of records, the filing of documents with government agencies, and the provision of information to shareholders.
Step 4: Open an account
After registering the holding company with the Cyprus Registrar of Companies, the next step is to open an account for the company.
Step 5: Register for taxes
The holding company must register for taxes with the Cyprus Tax Authorities. The company must obtain a tax identification number (TIN) and register for value-added tax (VAT) if the company engages in taxable activities.
Step 6: Obtain a Tax Residency Certificate
Cyprus offers a favorable tax regime, including a corporate tax rate of 12.5%. However, the holding company must obtain a Tax Residency Certificate to benefit. The holding company must demonstrate that its management and control is in Cyprus.
Step 7: Register with the Cyprus Securities and Exchange Commission (CySEC)
If the holding company intends to engage in investment activities, it must register with the Cyprus Securities and Exchange Commission (CySEC). CySEC regulates investment activities in Cyprus and ensures that companies comply with applicable laws and regulations.
Step 8: Obtain necessary licenses and permits
Depending on the nature of the holding company’s business activities, it may require additional licenses and permits from government agencies, including the Ministry of Energy, Commerce, and Industry, the Ministry of Finance, and the Ministry of the Interior. These licenses and permits are required to operate legally in Cyprus but in the case of a holding company, they may not apply.
Step 9: Maintain compliance with legal and regulatory requirements
The holding company must maintain compliance with legal and regulatory requirements at all times. This includes filing annual returns with the Cyprus Registrar of Companies, keeping proper accounting records, and submitting tax returns on time.
In conclusion, incorporating a holding company in Cyprus offers many advantages and can be a profitable and strategic move for businesses. The process of getting started can be handled in its entirety by Fast Offshore which has 26 years of experience. Our team can take care of every step, ensuring you are in line with local regulations and that everything runs smoothly. To talk to a member of our team about getting started, contact us here.