A Comprehensive Guide

Introduction

People holding a visitor’s visa and residing on the island who wish to start their own company in Cyprus can do so. However, there are numerous important factors they need to be aware of before embarking on this journey. These include understanding the legal requirements, financial obligations, and the fact that starting a company will not cause them to lose their visa status.

This guide will provide a comprehensive overview of everything needed to successfully establish a company in Cyprus while maintaining the privileges of their visitor’s visa.

Opening a company in Cyprus can be a lucrative and strategic move for entrepreneurs seeking to establish a foothold in the European market. Cyprus offers a favorable business environment, attractive tax incentives, and a straightforward process for company formation. Below you will find a detailed overview of the requirements, paperwork, costs, and steps involved in registering a company in Cyprus, including name registration, company registration, opening a bank account, and hiring employees.

Applying for a Visitor’s Visa 

A visitor’s visa for Cyprus allows individuals to stay in the country for tourism or business purposes without the right to work for 1 year. To obtain this visa, applicants must adhere to the application process which requires the following:

1. Visa Application Form: Complete and submit the visa application form, available on the Cyprus Ministry of Foreign Affairs website.
2. Financial Proof: Applicants must show proof of sufficient funds, typically around €24,000 per year, to cover their stay in Cyprus.
3. Bank Account: Open a bank account in Cyprus with an initial investment of at least €10,000. It is crucial to demonstrate that the funds are transferred from a bank account in the applicant’s country of origin to their account in Cyprus.
4. Supporting Documents: Provide supporting documents, including a valid passport, travel itinerary, accommodation details, and proof of health insurance.

Requirements and Initial Considerations

Before starting the company registration process in Cyprus, it’s important to consider the following key requirements and initial steps:

1. Company Name Registration: The first step is to choose and register a unique company name. This can be done through the Registrar of Companies. The name must be unique and not resemble any existing company names in Cyprus. It is advisable to submit three potential names to increase the chances of approval.
2. Type of Company: Decide on the type of company you wish to establish. The most common types are Private Limited Company (Ltd), Public Limited Company (PLC), and International Business Company (IBC). Each type has its own set of requirements and benefits.
3. Directors and Shareholders: At least one director and one shareholder are required to establish a company in Cyprus. Directors can be of any nationality and need not reside in Cyprus. The company must also appoint a secretary, who can be a natural person or a legal entity.
4. Registered Office: Every company in Cyprus must have a registered office address within the country. This address will be used for official correspondence.

Paperwork and Documentation

To register a company in Cyprus, the following documents are required:

1. Memorandum and Articles of Association: These documents outline the company’s structure, objectives, and regulations. They must be drafted and submitted to the Registrar of Companies.
2. Incorporation Form (HE1): This form includes details about the company’s directors, secretary, shareholders, and registered office.
3. Declaration Form (HE2): This form is a declaration of compliance with the Office Registrar in Cyprus.
4. Director’s and Secretary’s Consent (HE3): Written consent from the appointed directors and secretary indicating their willingness to act in their respective roles.
5. Shareholders’ Details: Information on the shareholders, including identification documents and proof of address.

Financial Requirements Despite Visitor’s Visa

The amount of money required to open a company in Cyprus varies based on the type and scale of the business. However, some standard financial considerations include:

1. Share Capital: For a Private Limited Company, the minimum share capital is typically €1,000, although there is no legal requirement for a minimum amount. For a Public Limited Company, the minimum share capital varies.
2. Registration Fees: The fees for registering a company in Cyprus vary but generally range from €160 to €645, depending on the orders and the documents submitted.
3. Annual Fees and Taxes: Cyprus boasts a corporate tax rate of 12.5%, making it one of the lowest in the EU. Starting in 2024, the annual levy, which was previously €350 per year, has been abolished and is no longer required.
4. UBO: Within 90 days of the company’s establishment, it is mandatory to register the Ultimate Beneficial Owners (UBO). Failure to comply can result in penalties of up to €10,000.

Opening a Bank Account

Opening a corporate bank account in Cyprus is a crucial step in the company formation process. The following steps are typically involved:

1. Choose a Bank: Select a reputable bank in Cyprus that suits your business needs.
2. Documentation: Provide the bank with necessary documents, including the company’s certificate of incorporation, Memorandum and Articles of Association, identification documents of directors and shareholders, proof of address, and utility bill.
3. Initial Deposit: Some banks may require an initial deposit to open the account. The amount varies depending on the bank’s policies.
4. Compliance and Due Diligence: Banks will conduct due diligence checks to comply with anti-money laundering regulations.

Hiring Employees

Cyprus offers a skilled and multilingual workforce. When hiring employees, consider the following:

1. Employment Contracts: Draft employment contracts that comply with Cyprus labor laws, outlining terms of employment, salary, benefits, and working conditions.
2. Social Insurance: Register employees with the Social Insurance Department and make regular contributions to the Social Insurance Fund.
3. Work Permits: If hiring non-EU nationals, ensure they obtain the necessary work permits.

Maintaining Visitor’s Visa Status While Opening a Company

Individuals who already hold a visitors visa can open a company in Cyprus without losing their visa status. However, it is important to note the following:

1. Employment Rights: Visitors with a visa are not granted employment rights and are not allowed to work in Cyprus.
2. Directors and Shareholders: Holders of a visitor’s visa are permitted to serve as directors, shareholders, and/or secretaries in a company. However, they are not allowed to receive a salary and can only earn income through company dividends.

These dividends can be used as proof of income for visitor visa renewal. In such cases, a certificate from the company’s auditors must be provided, confirming that the individual does not receive a salary from the company.

This provision allows visitors to engage in business activities and benefit from their investments without violating the terms of their visa.

Your One-Stop Solution

Rideo Group offers comprehensive services for company registration, visa applications, and bank account opening in Cyprus. As experienced immigration agents, we understand the intricacies of Cyprus immigration and company laws better than anyone else.

1. Company Registration: We handle all aspects of company formation, from name registration to preparing and submitting the necessary paperwork.
2. Visa Applications: Our team assists individuals from all over the globe in applying for visitor’s visas, ensuring all requirements are met and documents are in order.
3. Bank Account Opening: We facilitate the process of opening a bank account in Cyprus, including compliance with financial regulations and due diligence checks.

At Rideo Group, we provide a one-stop shop where you can sit back and relax while we take care of all the administrative and legal work for you. Our expertise ensures a smooth and efficient process, allowing you to focus on your business and personal goals in Cyprus.

Conclusion

Opening a company in Cyprus presents an array of opportunities thanks to its strategic location, favorable tax regime, and supportive business environment. The process involves several steps, from name registration and document preparation to opening a bank account and hiring employees. For third-country nationals, Cyprus offers a straightforward visa process, allowing them to establish a presence without compromising their visa status.

With the expert assistance of Rideo Group, the entire process becomes hassle-free. Our comprehensive services ensure that every aspect of company formation, visa application, and bank account opening is handled efficiently and professionally. Trust Rideo Group to be your reliable partner in navigating the complexities of Cyprus’s business and immigration landscape, enabling you to achieve your entrepreneurial goals with ease

Disclaimer: Although we work hard to deliver accurate and timely information, kindly take note that rules and laws are subject to regular change. It is advised that you speak with our consultants to ensure sure that the information displayed here is accurate and up-to-date.