Business Formation & Registration
Why setting up a Cyprus offshore company is the best thing you could do for your business right now!
Cyprus, a small island nation, is a really good place to start a business because it has low taxes, is in a good location, and has easy rules for companies. Cyprus is part of the European Union (EU), which means you can do business with other EU countries easily. The laws are based on English common law, so it's a well-recognised legal framework for your Cyprus offshore company.
In this blog, we will explain:
- Why Cyprus is a great place for you to execute your business activities
- What types of companies you can set up in Cyprus
- What financial licenses you can get
- What tax benefits on a Cyprus company incorporation
- Cyprus companies law
- Problems you might face
- How to start a company step-by-step guide
By the end, you’ll understand why a Cyprus company structure is a smart way to start your journey with your new company.
Why Cyprus offshore company formation?
There are many advantages of Cyprus offshore company incorporation such as:
✅ Low taxes — You pay less tax than in most other places.
✅ Good location — Close to Europe, the Middle East, and Africa.
✅ Easy business rules — Setting up a company is simple.
✅ Friendly to business — The government wants businesses to succeed.
Unlike other "tax haven" places, the republic of Cyprus is legal and trusted. It is a member of the European Union and follows EU rules, so naturally the legal requirements & international financial reporting standards are more stringent but the recognition for business owners when giving or receiving foreign investment is one of its significant advantages.
What makes Cyprus an ideal location?
Being a prime location from a geographical perspective:
- Located in the eastern Mediterranean Sea only 40 miles from Turkey and 200 miles from Egypt.
- You can reach over 500 million people in the EU easily.
- It’s easy to do business with nearby countries.
Cyprus also has two big ports — Limassol and Larnaca — perfect for e-commerce businesses.
Stability
Cyprus is politically and economically stable. That means the government doesn’t change too much, and the money system is strong.
- Cyprus is part of the EU (since 2004) and the Eurozone (since 2008) as it is on the EU white list.
- The banking services follow EU rules, meaning your money in a Cyprus bank account is safe.
- Even after a financial problem in 2013, the country bounced back and now has strong growth.
Strong Business Laws
Under English common law — which means the rules are easy to follow for your Cyprus company registration
- Business contracts are simple to understand.
- If you have a problem, there are courts specifically for Cypriot companies.
- You also get strong protection for patents, trademarks, and copyrights for specific needs.
- Standardised company documents; certificate of incorporation, Company's Memorandum & Articles of Association etc
Trust and Transparency
With a good reputation, and being seen as a trusted jurisdiction world wide:
- The Cypriot government follows EU rules to stop things such as Money laundering, terrorist financing, tax evasion etc...
- The Organisation for Economic Co-operation and Development (OECD) says Cyprus is transparent and honest.
- The business environment promotes best practice for resident companies - this makes it much easier when dealing with foreign investors and foreign companies due to the strong reputation of domestic businesses.
Advantages of Setting Up a Cypriot companies
🌍 Access to the EU Market
Since it is part of the EU, you can do business with other EU countries easily even though they share a lot of characteristics with more traditional offshore jurisdictions making it an attractive offering to foreign investors.
- No extra taxes when trading with other EU countries.
- You can join EU business programs and trade deals.
- You get protection for trademarks and business rights across the EU.
- Gain access to a multitude of double tax treaties in addition to full EU access.
💼 Easy to Start a Company
Starting a company in Cyprus is simple:
- The incorporation process for your legal entity in 5 to 10 days.
- You only need one shareholder and one director (can be the same person & can use a nominee director or nominee shareholder.)
- Foreigners can own 100% of the business entity — no need for local partners or a tax resident of Cyprus.
🏦 Strong Banking System
Cyprus bank accounts will serve as an offshore bank account for foreign businesses or a domestic account for local companies.
- Big banks include Bank of Cyprus, Hellenic Bank, and Eurobank.
- You can open a multi-currency business bank account.
- Online banking is available, so you can manage your money from anywhere.
- Offshore banking options are readily available too.
- No exchange control
*A Bank reference letter will be required for any bank account that you look to open
Types of Cyprus Companies
Cyprus allows you to set up different kinds of companies depending on your business needs:
1. Private Limited Company (LTD)
- Only need one shareholder and one director.
- No minimum share capital.
- Good for small and medium businesses with physical presence.
2. Public Limited Company (PLC)
- Needs at least seven shareholders and three is the minimum number of directors.
- Local tax implications
- Minimum share capital of €25,650.
- Good for bigger businesses with permanent establishment and registered office address.
3. Holding Company
- Various tax incentives and income taxed at 2.5%
- No tax on dividend income from other companies.
- Good for investing and holding assets.
- Commonly used with offshore trust. LINK TO TRUST ARTICLE / BLOG
4. Cyprus International Business Company (IBC)
- Tax exemption on foreign income so provided business is conducted outside of Cyprus there is no tax burden.
- Best for businesses that work outside Cyprus but want to corporate tax residency in Cyprus.
- Gain access to the double taxation treaties.
- Management of the company can be done from overseas
- Registered agent & company secretary required
5. Limited Partnership (LP)
- Needs at least two people — one general partner and one limited partner.
- The general partner runs the business and takes full responsibility for any losses.
- The limited partner just puts in money and only loses what they invested if the business fails.
- No company tax — the partners pay tax on their share of the profit.
- Simple and cheap to set up.
Which Company Type is Best for You?
- ✅ LTD – Best for small businesses that want to protect themselves from losing personal money.
- ✅ PLC – Best for big businesses that want to sell shares to raise money.
- ✅ Holding Company – Best for making money from other businesses or investments.
- ✅ IBC – Best for businesses working in other countries — tax authorities don't tax foreign income.
- ✅ Limited Partnership – Best for businesses where one person runs it and the other just puts in money.
Types of Financial Licenses in Cyprus
1. Cyprus Investment Firm (CIF) License
This license lets you trade things like stocks, bonds, and other financial products. You can also give advice to people about investing money. If you have this license, you can do business in all of Europe without needing other licenses.
Who gives the license?
Cyprus Securities and Exchange Commission (CySEC)
Who can get this license?
- Financial advisory companies
- Forex trading companies (those that trade different types of money)
- Asset management companies
- Stock trading platforms
Why this license is good:
- You can do business all over Europe with one license.
- Cyprus has low taxes — only 12.5% on profits.
- You can offer high leverage (borrowed money) for professional traders.
- It makes your business look serious and trustworthy.
What you need to get this license:
- You need at least €125,000 if you only give advice for set up and registration fees.
- You need €730,000 if you want to trade using your own money or hold client funds for set up and registration fees.
- You need to have someone responsible for making sure the company follows the rules.
- You need to send reports about your trades and money to CySEC regularly.
- To pay an annual fee
2. Payment Institution License
If you want to handle money, like sending money or setting up payment systems, you need a Payment Institution License. This license lets you send and receive money legally in Europe.
Who gives the license?
Central Bank of Cyprus
Who can get this license?
- Online payment platforms (like PayPal)
- Money transfer services
- Debit and prepaid card companies
- Online wallets
Why this license is good:
- You can offer your services all over Europe.
- You can work with big companies like Visa and Mastercard.
- You don’t have to pay taxes on money made from outside Cyprus.
- The process to get this license is fast (takes about 3 to 6 months).
What you need to get this license:
You need at least €20,000 to €125,000 depending on your business for set up and registration fees.
- You need to show how you will make money and follow the rules.
- You need to have systems in place to prevent money laundering (illegal money stuff).
- You need to protect customer data according to EU privacy rules (GDPR).
- You need to hire someone to make sure the company follows the rules.
- To pay an annual fee
3. Crypto License
If you want to work with cryptocurrency (like Bitcoin), you need a Crypto License. This lets you run a business where people can buy, sell, or store crypto. Cyprus has clear rules for crypto businesses, which makes it one of the best places to set up a crypto company.
Who gives the license?
Cyprus Securities and Exchange Commission (CySEC)
Who can get this license?
- Crypto exchanges
- Crypto wallets
- Companies that help people trade crypto
- Crypto platforms for investing
Why this license is good:
- You can work with customers all over Europe.
- No tax on crypto profits made outside Cyprus.
- It makes your business look professional and trustworthy.
- Cyprus has clear crypto rules, so banks are more likely to work with you.
What you need to get this license:
- You need at least €125,000 to €730,000 depending on the business size for set up and registration fees.
- You need to have systems to prevent fraud and illegal money activity.
- You need to show how you will protect customer data.
- You need to have enough money in reserve to cover business losses.
- You need to send regular reports to CySEC about your business.
- To pay an annual fee
4. Electronic Money Institution (EMI) License
This license lets you create electronic money (like prepaid cards and online wallets). It’s like a Payment Institution License, but more powerful because you can hold customer funds and issue e-money.
Who gives the license?
Central Bank of Cyprus
Who can get this license?
- Mobile payment companies
- Online wallets
- Prepaid card issuers
- Platforms like PayPal
Why this license is good:
- You can operate all over Europe.
- You can store customer money and offer payment services.
- Cyprus has low taxes (only 12.5% on profits).
- It’s easier to get approved in Cyprus compared to other EU countries.
What you need to get this license:
- You need at least €350,000 in capital for set up and registration fees.
- You need to keep customer money in a separate account.
- You need to have systems to stop money laundering and protect customer data.
- You need to send regular reports to the Central Bank of Cyprus.
- You need to have a plan in case your business has problems.
- To pay an annual fee
5. Forex Broker License
If you want to let people trade different types of money (like USD, EUR, GBP) or offer Contracts for Difference (CFDs), you need a Forex Broker License. Cyprus is one of the best places for forex companies because it’s part of the EU and has low taxes.
Who gives the license?
Cyprus Securities and Exchange Commission (CySEC)
Who can get this license?
- Forex trading platforms
- CFD brokers
- Financial betting platforms
Why this license is good:
- You can operate in the whole EU.
- Cyprus has one of the lowest tax rates in Europe (12.5%).
- Clients are protected by the Investor Compensation Fund (up to €20,000 per client).
- You can offer leverage up to 1:30 for retail clients and higher for professional clients.
What you need to get this license:
- You need at least €125,000 to €730,000 depending on business size for set up and registration fees.
- You need experienced managers who know the forex business.
- You need to keep client money in a separate account.
- You need to have professional insurance in case of mistakes.
- You need to send regular reports to CySEC.
- To pay an annual fee
Why Cyprus is Good for Financial Licenses
✅ Low taxes — Cyprus has one of the lowest corporate tax rates in the EU at 0% - 12.5%.
✅ Easy to operate in Europe — Once you have a license, you can work in all 27 EU countries.
✅ Fast licensing — Most licenses take 3 to 6 months to get approved.
✅ Strong legal system — Cyprus follows English law, so the rules are easy to understand.
✅ Stable banking — Cyprus banks work with many types of financial companies.
What to Do Next
👉 Want to start a financial business in Cyprus? One of our corporate services is assisting individuals in setting companies up within Cyprus & helping them to obtain financial licensing!
👉 Book a FREE call with one of our team here: Select a Date & Time - Calendly — we’ll help you pick the right license and set everything up!
Tax Benefits in Cyprus
Cyprus has one of the lowest corporate tax rates in Europe:
- Corporate tax rate is ranges from 0% to 12.5% on corporate income.
- No dividend income tax
- Low capital gains tax
- Low stamp duty at 0.15%
- No withholding tax on payments to non-residents
- 80% tax discount on profits from intellectual property (like patents).
Rules You Need to Follow
- You must file annual financial statements.
- You must register for VAT and follow EU tax rules.
- Maintain good standing
- Must keep up date all filings of corporate documents, banking information & power of attorney.
- Directors and shareholders’ names must be in public records (but you can use nominee services).
- Public register of companies for all IBC, holding companies, private limited companies and public companies
- You must follow EU rules on stopping illegal money activity.
Problems You Might Face
⚠️ "Substance" rules – You need to show that your company is doing real business in Cyprus (not just for tax reasons - unless your company is an Cyprus International Business Company)
⚠️ Tough banking rules – Cyprus banks check all the necessary documents carefully before opening an account.
⚠️ Small market size – Cyprus is not a big market on its own, so you’ll need to focus on international business.
How to Start a Company in Cyprus (Easy Steps)
- Pick a Name – The name needs to be unique and approved.
- Prepare Documents – You need a Memorandum and Articles of Association.
- Register the Company – File the paperwork with the Cyprus Registrar of Companies.
- Open a Bank Account – You need a business account for company transactions. (OffshoreCompanyReg will also assist you with bank account opening as part of one our additional services)
- Register for Taxes – Sign up for corporate tax and VAT.
- Start Your Business – You’re ready to go!
Final Thoughts
Cyprus is a great place to set up a business because of low taxes, easy rules, and a strong banking system. If you want to grow your business and save on taxes, Cyprus is a smart choice. There are naturally alternatives from a licensing perspective such as British Virgin Islands, United Kingdom, Ireland, Hong Kong or even Mauritius amongst others. Each have their own unique characteristics so it is key to do your due diligence and speak to competent business consultant such as OffshoreCompanyReg.
Book a FREE call with one of our team here: Select a Date & Time - Calendly
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