Foreign investors find Cyprus to be an attractive location for establishing businesses. It has a robust economy and dynamic development in infrastructure and technology. The mild climate, natural wonders, beautiful beaches and English speaking community are additional bonuses. But one of the first questions that potential investors ask is, how much does it cost to register a company in Cyprus?
This article will help you understand the fees that come with registering a business in Cyprus. The details can help you determine the final costs when working with a Cypriot law firm to establish your company in the country.
What Are The Fees Involved in Registering a Company in Cyprus?
You need to pay four types of fees to register a company in Cyprus. Let us discuss each one of them.
This fee is paid only once, and it is for the company’s creation. Many companies in Cyprus shell out €1200 to €3000 for the registration, and this amount varies depending on the service provider. If you work with well-known law firms, the prices may go up to €4000. On the other hand, lesser-known law firms may offer registration for less than half this amount.
However, you need to be aware of caveats when choosing the law firm to work with. First, you must ensure that the service provider you connect with will cater to your needs even after establishing the company.
Additionally, check what is included in the price. Service providers ask for very low fees but charge additional payments for basic company documents that you will need.
This is a recurring fee that you need to pay. Annual fees are for the nominees, secretary, and registered office services.
Nominees are typically divided into shareholders and directors, and they are the lawyers or accountants that keep the clients’ anonymity. To calculate the annual fee, the company must have a registered office in Cyprus and shall designate a secretary.
Generally, the registered office is also the lawyer’s address who assisted in the incorporation of the company. It does not have to be the address of the lawyer per se, and the registered address of the company should be a physical location in Cyprus.
To be established in Cyprus, your company must have a secretary who is usually the lawyer that incorporated the company. It is for the convenience of everyone since the lawyer, acting in the capacity of a secretary, may prepare and sign the application for Registration of the Company even without the client.
Annual fees typically cover four services for the nominee shareholder, secretary, director, and the registered office.
Accounting and Audit Fees
These fees included in the registration of a company in Cyprus depend on the number of transactions the company has each month or year and if the company employs an accountant from a big or small firm.
Your company in Cyprus must register with the Inland Revenue Office and register for a tax number. Your company must file audited accounts every year and pay the tax. Depending on their setup, some companies may also get a VAT number and register with the VAT Department. They must also file VAT returns every three months if they do.
The fees for accounting and auditing range from €1200 plus VAT annually, which may increase depending on the company’s needs.
Annual Expenses Paid to the Registrar of Companies
There are two types of fees paid annually to the Registrar of Companies. The first is the Annual Return. A company must file an annual return to the Registrar of Companies every year. They shall submit a recording of the changes in the company during the year, such as changes in capital, shareholders, or directors. You will need a documentary stamp for this, which costs €100.
Afterwhich, the fees will depend on the charges that the account or lawyer will charge for the report preparation and filing.
The second fee is the Special Government Levy, which requires all businesses in Cyprus to pay a fee of €350 by June 30th of each year.
For a group of companies, the total levy is capped at €20,000, which must be equally divided between the companies. Late submission comes with a penalty of 10% for the first two months and 30% for late submissions within five months.
Companies that cannot pay the annual levy during the specific time frame may receive a strike off from the Registrar of Companies. If a company wants to be reinstalled after it received a strike-off, they need to pay €500 within two years after the date of removal from the Registrar of Companies. Within two years, the reinstatement fee is €750.
If a company is undergoing liquidation and the process has been initiated before the 30th of June, they are no longer required to pay the annual levy.
There are four major fees that you must consider if you intend to register a company in Cyprus. It is best to work with professionals to ensure that there are no problems with your registration process. The fees you need to pay to vary widely depending on the service providers you are working with.