Company Registration: Cyprus. Ready-Made Company Ltd

Cyprus is a member state of the European Union and applies EU corporate and tax rules together with national legislation.

• A Cyprus company whose tax residence is determined under the current management-and-control rules is subject to corporation tax at 15% from 2026. Income, dividends, interest, foreign permanent establishments and payments to non-residents are treated under the current Income Tax Law, SDC rules, transfer-pricing rules and applicable double taxation treaties. For a specific company, we calculate the tax result in advance using its actual contracts and countries of income.

A double taxation treaty is in force between Ukraine and Cyprus. For a specific payment, we check the current treaty wording, the type of income and whether the recipient qualifies for the treaty rate.

Cyprus companies may carry on any lawful activity. Banking, insurance, reinsurance, financial services and other regulated activities require the relevant licence.

A Cyprus Limited may have foreign shareholders. The need for a sector licence depends on the activity rather than the owner’s nationality. If the company needs an office, regulated activity or employment of third-country nationals, the relevant permits are arranged separately under current rules.

Cyprus company law incorporates relevant EU rules on reorganisations, acquisitions and mergers. Tax treatment depends on the current reorganisation and anti-abuse rules. Tax losses may be carried forward under the periods allowed by current legislation.

Cyprus has liberalised direct investment by non-residents. Foreign investors may establish companies, acquire shares and invest capital subject to the current company, investment-control and sector-specific rules rather than a general Central Bank approval for ordinary company formation.

In practice, Cyprus company formation is based on strict Know Your Customer requirements. Corporate and legal service providers must keep sufficient information on clients, including identification, address evidence and other compliance documents. Owners should be ready to provide additional information when requested and to keep company files up to date.

Where a Cyprus company relies on a double taxation treaty, it may need to prove Cyprus tax residence and meet the applicable management-and-control and beneficial-entitlement tests. The exact requirements depend on the treaty, the residence certificate and the company’s actual management.

A foreign investor may use several legal forms in Cyprus, including:

• Private company limited by shares– private company limited by shares
• Public company limited by shares - public limited liability company
• Exempt private company- historical exempt private company form
• Company limited by guarantee- company limited by guarantee
• Partnership– partnership
• Trust– trust

A Cyprus company may be formed by one person, individual or corporate, who may also be a shareholder and director where permitted. The company must also have a secretary. Shareholders, directors and secretaries may be non-residents, subject to the company’s tax-residence and substance requirements.

Private company limited by sharesA private company limited by shares and a public company limited by shares have the following main features:

For a private company, share capital is defined by the Memorandum and Articles and stated in euros (EUR). Public companies are subject to separate corporate-law requirements. We select a practical capital amount according to the shareholders, expected costs and bank requirements.

A private company cannot offer its shares to the public and may restrict transfers to third parties. A public company is subject to the rules governing public offerings and transferability of shares.

Exempt Private CompanyThe Exempt Private Company was a historical Cyprus form with special ownership and reporting rules. It is included here as part of the legacy material rather than as the standard form used for new registrations.

A company limited by guarantee is normally used for non-profit organisations such as clubs, associations, unions and similar bodies.

PartnershipA partnership may be formed by at least two persons, individuals or legal entities, as a general or limited partnership. Partners may be non-residents, subject to the applicable registration and tax rules.

The main difference between general and limited partnerships in Cyprus is the liability of the partners:

general partners have unlimited liability for the debts and obligations of the partnership;

a limited partnership includes general partners with unlimited liability and limited partners whose liability is limited to the agreed amount.

Both types of partnership are managed by the general partners.

Foreign owners may participate in a Cyprus company. A separate permit or licence is required only where the business activity, sector or specific investment is regulated. We check these requirements before registration.

The Cyprus Registrar of Companies may reject a name that is identical or confusingly similar to an existing company, misleading, implies royal, national or international status, or uses restricted terms such as “Co-operative”, “Insurance”, “Bank” or “Financial Services” without the required basis or approval.

A Cyprus company must prepare annual financial statements and comply with the applicable accounting, audit and filing requirements. Licensed Cyprus accountants and auditors are used where required.

MAIN TAX POINTS FOR COMPANIES AND INDIVIDUALS. CORPORATE TAX

Cyprus tax-resident companies

• Cyprus tax-resident companies are generally taxed on income from sources in Cyprus and abroad, subject to exemptions and treaty relief.

Cyprus non-resident companies

Cyprus non-resident companies may be taxed in Cyprus on:

• A) income arising in Cyprus;
• B) income attributable to a permanent establishment or other taxable business presence in Cyprus, under the applicable rules.

A company is tax resident in Cyprus under the applicable management-and-control and statutory residence rules. Practical factors include:

• the residence and role of the company’s directors;
• where board meetings and key management decisions take place.

Tax rate

From 2026, the standard corporation tax rate for Cyprus tax-resident trading companies is 15%.

Corporate tax exemptions

A Cyprus company may benefit from exemptions for certain dividends, gains on qualifying securities and foreign permanent establishments when the relevant conditions are met. Interest, financing, related-party transactions and foreign income are reviewed separately under current anti-abuse and transfer-pricing rules.

Expenses deductible for tax purposes

Expenses incurred to produce the company’s income may be deducted when they meet the current Income Tax Law requirements. For salaries, rent, professional services, interest and group costs, we check the supporting documents and applicable limitations before preparing the tax computation.

Capital allowances and depreciation deductions:

Capital allowances apply to fixed assets according to the current asset categories and tax rates. The accountant uses the asset cost in EUR and the current Tax Department rules.

Expenses not deductible for tax purposes:

Personal expenses, unsupported costs and other amounts that do not meet the tax-deduction conditions are excluded from the tax computation. Special restrictions apply to interest, related parties and certain categories of expense.

Tax losses

The 2026 tax reform extended the tax-loss carry-forward period to seven years. When preparing the return, we separately review the company’s own losses and any available group relief so they are used in the correct order.

Offshore companies (IBC) — historical terminology

The former division between local and offshore/IBC Cyprus companies is no longer used. Cyprus companies operate under a unified corporate regime, and the tax result depends on residence, type of income and current rules.

Shipping companies and ship-management companies

Cyprus shipping companies and ship-management businesses may use the tonnage-tax and shipping-tax framework when the statutory conditions are met. The treatment of qualifying shipping income, dividends and crew remuneration depends on the current shipping legislation.

Cyprus tax-resident companies that do not qualify for a special shipping regime are subject to the standard corporation tax rate of 15% from 2026.

SPECIAL DEFENCE CONTRIBUTION (SDC)

Special Defence Contribution applies only to the passive-income categories specified by law and depends on the tax status and domicile of the recipient. The regime was changed by the 2026 tax reform, so for dividends, interest or rental income we calculate SDC under the rules in force on the payment date.

The distinction between active and passive income is particularly relevant to interest and financing income.

For interest and other financial income, the actual nature of the transaction matters: trade finance, an intra-group loan, a deposit or other passive income. We document the classification in the tax computation and transaction records.

PROPERTY TAX

The former annual state Immovable Property Tax is no longer applied in its previous form. Municipal and other property-related charges may still apply and are calculated according to the location of the property.

CAPITAL GAINS TAX

Capital Gains Tax is 20% on gains from the disposal of real estate in Cyprus and, in specified cases, shares in companies that own such property. One-off exemptions may apply to individuals where the conditions are met.

PERSONAL INCOME TAX

For a company director or owner, personal tax depends on tax residence and the type of payment. From 2026, Cyprus applies the following basic personal income tax scale:

VALUE ADDED TAX (VAT)

The standard VAT rate in Cyprus is 19%. Reduced or zero rates apply to certain goods and services. The need for VAT registration and VIES depends on the type of transactions, customer location and sales volume.

COMPANY SHARE CAPITAL FEE

The share capital of a Cyprus company is stated in euros (EUR). Registration charges for incorporation and changes to capital are paid at the current Registrar of Companies rates. We calculate them before filing based on the selected share structure.

FEE FOR AN INCREASE IN SHARE CAPITAL

When share capital is increased, the corporate documents and registration charges are prepared according to the current Registrar of Companies tariff. We calculate the amount before the shareholders’ resolution is filed.

PENALTIES FOR LATE COMPANY FILINGS IN CYPRUS

For late returns or payments, the Tax Department applies the interest and penalties provided by law. Before filing, we check the current amounts and deadlines for the specific tax so the company meets its obligations at the correct level.

We will be pleased to answer your additional questions.

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