There are various options for investors from different nations who wonder how to open a business in Cyprus. Cyprus has one of the most attractive ambiences among EU members for business owners. This nurturing business environment is due to the Cypriot residence by investment programs. This program allows foreign investors to live comfortably as permanent residents or citizens when they invest in businesses in the country.
Cyprus has more than just tourism. They have advanced technology that makes it easy for investors to open a business because they are automated. So, let’s discuss the dynamics of starting a business in this beautiful island country in the Mediterranean.
Types of Companies to Start in Cyprus
One of the best things about opening a business in Cyprus is giving you the same choices as any Cypriot citizen. The most popular type of business is the Limited Liability Company, but here are some other types of companies you can explore:
- Partnerships – can either be general or limited
- Sole Proprietorship – an option for single investor enterprises and small businesses.
- Unlimited Partnership – these are limited liability companies with limited guarantees.
Foreign investor companies may also open branch offices, representative offices, or subsidiaries. Local law firms and agents typically offer assistance and guide investors who wich to open any business in Cyprus.
Steps on How to Open a Business In Cyprus
There are several requirements that investors must complete for them to start a business in Cyprus. The country’s business law details the steps and the documents needed. The company must first register, and the investor will choose the category for their business.
After completing this crucial step, the business owner must take heed of the following steps to open a business in Cyprus:
- Reserve a Name for the company – it should reflect the core activity or services of your business.
- Draft of all documentation for the business. It should include the Articles and Memorandum of Association of the company.
- Open an account for your company in a local bank. It will be the account for the share capital.
- Assign directors and secretaries for the company. All companies in Cyprus must have these two critical positions.
- Submit the company registration documents to the Cyprus Companies House
- Obtain a taxation number, social insurance, and VAT. Don’t forget to register for pension purposes as well.
- Apply for business licenses appropriate for the field or industry that your business will specialize in before starting operations.
Once these steps are completed, and the Registrar of Companies has given the business registration certificate, the investor may start hiring workers. Soon after, they can start their business operations.
It is pretty cost-effective and straightforward to open a business in Cyprus. It will be a smooth sailing journey when you understand the process and seek local agents to help you navigate through the rough spots.
What to Consider When Opening a Business In Cyprus
Foreign investors who wish to open a business in Cyprus must stick to the steps provided above to avoid any delays or issues in the process. Additionally, the information below may also help prepare you for what you should expect as you pursue your business plans in the country.
Depending on the type of business and the company’s operations, you must comply with various requirements that point to the ownership and shareholding information of the company.
- Investors need to obtain individual permits and licenses to register for businesses specializing in certain services or activities.
- Companies need to register for taxation and employment rights after they are registered.
- Business owners can reserve a business name for their company online.
- A company should first register its legal address in Cyprus, though many are also availing virtual offices.
Reserving a Trading Name for a Business
The first step for investors to take before opening a business in Cyprus is to choose and book a trading name. To ensure approval, local business lawyers recommend that investors submit three name proposals and the business name they want.
Preparing Company Incorporation Documents to Open a Business in Cyprus
The most vital documents that companies need to submit when opening a company in Cyprus are the Memorandum and Articles of Association.
These documents carry the details of the company’s directors, shareholders, and secretaries.
It also has information on the capital shares and how these shares will be divided among the shareholders.
These statutory documents must be drafted in English or Greek. Investors should have it notarized. If you are not in the country, you should seek a local attorney to help you prepare these documents to establish your business.
Why Consider Cyprus for Your Business?
Over the years, Cyprus has developed a strong economy. The country is one of Europe’s important trading hubs and is considered by the European Union to have a beneficial geographical location.
But these qualities are not the only attributes that charm foreign investors to consider expanding to this Mediterranean nation. If you open a business in Cyprus, you will also benefit from:
- Low tax rates at 12.5% for companies in the European Union
- One of the safest destinations in Europe. Thus, investors feel a safe business environment in Cyprus.
- A total FDI stock of $224 Million in 2018, which is about 915% of its GDP
- The country is ranked 57th in the World Bank’s 2019 Ease of Doing Business report – meaning it has a well-respected business process.
- Has a very high inflow of direct foreign investment
By reading all this information, investors will realize the ease of opening a business in Cyprus. The country has a very lenient business law, and they favour foreign companies that wish to expand into the country. It’s no wonder, over the last few years, more companies have established new businesses in the region.
The rich culture, fine climate, touristy destination, highly-developed transportation system, and low cost of living are a bonus for investors who also intend to settle in Cyprus.
If you plan to open a business in Cyprus, you may seek a local agent or a Cypriot business lawyer to start the process for you.