Cyprus has a very attractive tax regime for companies with 12.5% corporate tax.
Cyprus companies benefit from a full exemption on capital gains and dividends received except in cases where foreign-source dividends are deductible for the paying company’s tax purposes.
This makes it an appealing choice for holding structures.
Cyprus also has one of the best IP box regimes with an effective 2.5% tax instead of 12.5% for qualified IP related income.
Quick Facts
Corporate Tax Rate
12.5%
Local Director Required
Yes
Initial Setup Cost
From EUR 2600 (one-off)
Audit Required
Yes
Annual Maintenance Cost
From EUR 1600 / year
Complexity
Moderate
Legal Information
Legal Information
Entity Type
Corporation
Company Form
Private Company Limited by Shares (Ltd.)
Liability
Shareholders' liability is limited to the unpaid value of their shares. Personal assets are protected unless there is personal wrongdoing.
Share Capital
No minimum share capital requirement. Shares may be denominated in any currency.
Company Name Rules
Must be unique and not similar to existing names. Must end with “Ltd.” or “Limited.” Cannot contain restricted or misleading terms (e.g., "bank" or "insurance" without approval).
Types of Shares Allowed
Ordinary, Preference, and Redeemable Shares.
Bearer Shares Allowed
No, bearer shares are not permitted.
Foreign Ownership Rules
100% foreign ownership is allowed.
Redomiciliation
Allowed
Shareholders
Minimum: 1 shareholder (natural or legal person). Details are available upon paying a fee in the registry.
Directors
Minimum: 1 director (natural or legal person). Directors can be residents or non-residents. Details are publicly accessible.
Secretary
Registered Address
Cyprus limited companies must have a registered local address.
Incorporation Timeline
KYC & Due Diligence
1-2 business daysComplete KYC checks and submit due diligence documents for shareholders and directors.
Company Name Approval
3-5 business daysSubmit proposed company name to the Registrar of Companies for approval.
Preparation of Documents
3-5 business daysDrafting the Articles of Association, Memorandum, and other incorporation documents.
Submission to Registrar
3-5 business daysFiling the incorporation documents with the Cyprus Registrar of Companies.
Certificate of Incorporation Issued
3-5 business daysOnce approved, the Registrar issues the Certificate of Incorporation.
Tax Identification Number (TIN) Registration
2-3 business daysRegister the company with the Cyprus Tax Department and obtain a Tax Identification Number (TIN).
VAT Registration
Up to 30 business daysIf required, register the company for VAT. Processing time depends on the complexity of the business.
Bank Account Opening
7-60 business daysOpen a corporate bank account. EMI providers (Revolut, Wise) can take 7 days, while traditional banks may take up to 60 days.
Compliance & Operational Setup
OngoingAppoint accountants, ensure annual compliance, and start business operations.
Cyprus Corporate Taxation
Corporate Income Tax: 12.5%
Effective Tax Rate: 12.5%
Exemptions:
Income derived from dividends, certain interest, and qualifying profits from the sale of shares.
Dividends from Cyprus and foreign investments are exempt, subject to participation exemptions.
Capital gains are exempt for CY Ltd company. Capital gains only apply for Cyprus-situated immovable property at a rate of 20%.
Applicable to royalties paid to non-residents for use outside Cyprus.
Special Regimes
Qualifying income tax can be reduced to as low as 2.5%
Anti-Avoidance Rules
Applies to low-taxed non-resident companies and PEs; includes anti-avoidance measures.
Follows OECD guidelines with Master and Local File requirements.