Company Formation in Cyprus

Last updated: April 2026.

Cyprus is the European Union's most-used holding-company jurisdiction after Luxembourg and the Netherlands. A comprehensive tax reform effective 1 January 2026 reset the corporate tax rate from 12.5% to 15%, in line with the OECD's global minimum, while reducing the Special Defence Contribution on dividends from 17% to 5% and abolishing the Deemed Dividend Distribution mechanism. The headline tax rate moved up, but the rest of the reform broadly reduced effective tax for most structures. The IP Box regime continues to deliver an effective tax rate of around 3% on qualifying intellectual-property income under the nexus approach. The non-domicile regime still exempts individual dividends and interest income from SDC for up to 17 years from Cyprus residency.

We form Cyprus limited companies end to end: name reservation, drafting of Memorandum and Articles, submission to the Registrar, Tax Identification Number issuance, VAT registration, UBO filing, and bank or EMI introduction. Fixed price, dedicated manager, all government and regulatory fees included.

Quick facts	Value
Corporate Income Tax (from 1 Jan 2026)	15% (raised from 12.5%)
Effective IP Box rate	~3% on qualifying IP profits (80% deemed deduction)
SDC on dividends (individuals)	5% (reduced from 17% in 2026)
SDC on rents	Abolished in 2026
VAT	19% standard / 9% / 5% reduced
VAT registration threshold	€15,600 annual turnover
Personal income tax	0–35% progressive
Withholding tax on outbound dividends (to non-residents)	0%
Minimum share capital (private Ltd)	€1 nominal — no statutory minimum
Minimum directors / shareholders	1 director, 1 shareholder (can be the same person, can be foreign)
Residency requirement	None for shareholders; Cyprus-resident director majority needed for tax residency
Standard formation time	10–14 working days
Government fees	Included in our packages
Language of filings	Greek and English
Currency	Euro (EUR)

Why Form a Company in Cyprus

The 2026 reform changed the numbers but preserved — and in some ways sharpened — the reasons to use Cyprus. Five stand out.

Holding-company tax efficiency. Cyprus is the most direct EU path for an international group to aggregate dividends and capital gains from subsidiaries in lower-tax jurisdictions. Dividends from foreign subsidiaries are exempt from corporate income tax in Cyprus, subject to anti-hybrid and minimum-tax rules. Capital gains on the sale of subsidiaries are exempt except where the subsidiary's assets are Cyprus real estate. There is no withholding tax on outbound dividends to non-residents, regardless of the recipient's country. The 2026 abolition of Deemed Dividend Distribution removes the historic 70% profit-distribution obligation, allowing full retention of profits in the Cyprus holding company.

IP Box at ~3% effective rate. Qualifying IP income benefits from an 80% deemed deduction under the modified nexus approach. Combined with the new 15% corporate tax rate, the effective tax on qualifying IP profits drops to roughly 3%. The regime is approved at OECD level and continues through 2030. For software, patents, copyrightable code, and certain trade secrets developed with sufficient Cyprus-based substance, the IP Box remains the most competitive IP tax regime in the EU.

Non-domicile regime for individuals. Individuals who become Cyprus tax residents but are non-domiciled under Cyprus inheritance law are exempt from SDC on dividends, interest, and — from 1 January 2026 — rental income for up to 17 years. After 17 years, the regime can be extended by two consecutive 5-year periods by paying a €250,000 lump sum per period. For internationally mobile founders taking dividends from a Cyprus holding company, the combined effect is close-to-zero tax on dividend income for nearly three decades.

EU + Common Law + English language. Cyprus is an EU member state, in the Single Market, uses EU VAT, and accesses the Parent-Subsidiary Directive and the Interest and Royalties Directive. It is a Common Law jurisdiction with company law modelled on the UK Companies Act — familiar to international lawyers and counterparties. English is widely used in business and legal documentation.

An extensive treaty network. Cyprus has 65+ double-tax treaties, including favourable provisions with the EU, Russia (post-2020 revisions), India, China, South Africa, and most of Eastern Europe — historically the backbone of Cyprus's positioning as a gateway between the EU and the CIS region.

The trade-offs: banking is harder than it used to be (opening a Cyprus corporate bank account as a non-resident with no Cyprus connection is a 4–12 week process and rejection is common), the 15% headline rate is higher than the old 12.5%, and Cyprus has tightened substance requirements — a Cyprus shell without any local activity no longer qualifies reliably for treaty relief.

Company Types Available in Cyprus

Cyprus company law offers four main forms. The private limited company accounts for virtually all cf24 client incorporations.

Private Limited Company by Shares (Ltd)

The default vehicle. Limited liability up to the share capital. No statutory minimum share capital — a nominal €1 share is sufficient, though most Cyprus Ltds are incorporated with €1,000 authorised capital for regulatory comfort. Minimum one director and one shareholder (can be the same person, can be foreign). A company secretary is mandatory. Annual filings: HE32 annual return and audited financial statements (audit is mandatory for all Cyprus companies regardless of size). Anyone can be a shareholder; for the company to be treated as Cyprus tax resident, management and control — in practice a majority of Cyprus-resident directors — must be exercised in Cyprus.

Public Limited Company (PLC)

For listed companies or those with more than 50 shareholders. Minimum share capital €25,629 (the legacy drachma conversion). Stricter disclosure and governance rules. Used by less than 1% of cf24-style incorporations.

Branch of a Foreign Company

A foreign parent's Cyprus branch. Taxed in Cyprus only on Cyprus-source income attributable to the branch. Used when the foreign group needs Cyprus VAT registration or local presence without a separate subsidiary.

Partnership (General or Limited)

General partnership: unlimited personal liability for all partners. Limited partnership: one or more general partners with unlimited liability plus limited partners capped at their contribution. Used primarily for professional services or specific investment structures.

Form	Min capital	Liability	Tax	Common use
Private Ltd	€1 nominal	Limited	15% CIT	Holding cos, trading, SMEs, IP
PLC	€25,629	Limited	15% CIT	Listed cos
Branch	n/a	Parent's	15% on branch profits	Foreign group presence
Limited Partnership	n/a	Mixed	Partners taxed personally	Funds, professional services

Step-by-Step Formation Process

A typical Cyprus private limited company formation takes 10 to 14 working days from a clean filing.

1. Name reservation and Registrar approval. We submit the proposed name to the Department of Registrar of Companies and Intellectual Property (DRCIP). Approval takes 2 to 3 working days. Cyprus has specific rules on protected terms (banking, insurance, royal, state-related) and requires the "Limited" or "Ltd" suffix.

1. Memorandum and Articles of Association. Drafted by Cyprus-qualified lawyers (a statutory requirement — only licensed Cyprus lawyers may draft incorporation documents for filing). We use standard articles with client-specific customisation for share classes, transfer restrictions, pre-emption rights, and board governance where needed.

1. KYC and shareholder documentation. Each shareholder, director, secretary, and beneficial owner provides passport, proof of address, CV, and professional reference (required under Cyprus AML rules). Corporate shareholders provide certificates of incorporation, directors registers, and UBO declarations with apostille.

1. Filing with the Registrar. The Memorandum, Articles, HE1 (directors' declaration), HE2 (registered office declaration), and HE3 (first secretary declaration) are filed electronically. Processing time is 5 to 10 working days from submission.

1. Certificate of Incorporation and TIC. Issued by the Registrar upon approval. The Tax Identification Number (TIC) is issued by the Cyprus Tax Department within approximately 30 days (we expedite this as part of standard formation).

1. Post-incorporation registrations. UBO filing with the Cyprus UBO register within 90 days. VAT registration if turnover will exceed €15,600 in the next 12 months (mandatory for intra-EU supplies regardless of turnover). Social insurance registration if employing Cyprus residents. Bank account opening — the single biggest timing variable, typically 4 to 12 weeks for non-resident-controlled structures.

End-to-end timeline from KYC clearance to operating company with bank account: 6 to 14 weeks, with the certificate in hand within 2 weeks and the bank being the principal delay.

Required Documents

For each shareholder, director, secretary, and beneficial owner:

• Passport (clear scan of all relevant pages)
• Proof of residential address dated within three months
• Recent CV (required under Cyprus AML rules for formation)
• Professional reference (lawyer, accountant, banker) — required for most incorporations
• Bank reference letter (required by almost all Cyprus banks for the banking stage)
• For corporate shareholders: apostilled certificate of incorporation, apostilled register of directors, UBO declaration, audited accounts for the last two years (banks require this)

The registered office must be a Cyprus address. We provide registered office service in Nicosia and Limassol as part of standard formation packages.

Costs and Timeline

Cyprus formation costs depend on the share capital (DRCIP filing fees are calculated as a percentage of authorised capital), whether the Memorandum is drafted in Greek or English (both are accepted; English is standard for cf24 clients), and which optional services you bundle — nominee director or secretary, substance package, bank introduction, accounting setup.

Our packages cover the Memorandum and Articles drafted by Cyprus-qualified lawyers, all DRCIP filing fees, Certificate of Incorporation, TIC issuance, registered office for year one, UBO filing, secretary service for year one, and a bank or EMI introduction. Contact us for a fixed-price quote — accounting and audit are quoted separately because they vary substantially by company activity.

Typical timeline from KYC clearance:

Week	Milestone
0	Engagement, KYC submitted
1	KYC cleared, name reserved, Memorandum drafted
2	Filing with Registrar, Certificate issued
3–4	TIC, UBO filing, VAT registration
6–14	Bank account opened (variable per bank and profile)

Tax Overview for Cyprus Companies

The 2026 tax reform was the most significant change to Cyprus corporate tax in over a decade. Eight points matter for most cf24 clients.

Corporate Income Tax: 15% on worldwide profits of Cyprus tax-resident companies, effective for tax years starting on or after 1 January 2026. Increased from the previous 12.5% as part of OECD Pillar Two alignment. Applies to all Cyprus-resident companies regardless of size.

Tax residency — new "incorporation test". As of 2026, companies formed under the Cyprus Companies Law are automatically treated as Cyprus tax resident, providing immediate certainty from day one. The legacy "management and control" test still applies as an additional basis for tax residency of foreign-incorporated entities managed from Cyprus.

IP Box regime: 80% deemed deduction on net profits from qualifying IP, using the modified nexus fraction. Combined with 15% CIT, effective tax on qualifying IP income is approximately 3%. The regime is approved under OECD BEPS Action 5 and continues through 2030.

Dividend income from foreign subsidiaries: exempt from CIT, subject to anti-hybrid rules and a minimum-tax test (the foreign subsidiary must face an aggregate foreign tax burden of at least 6.25%).

Dividend distributions to non-residents: 0% withholding tax, regardless of treaty.

Special Defence Contribution (SDC). Applies only to Cyprus-resident, Cyprus-domiciled individuals. SDC rate on dividends reduced from 17% to 5% effective 2026. SDC on interest remains at 17%. SDC on rental income abolished in 2026. Non-domiciled individuals are exempt from SDC on dividends, interest, and rental income for up to 17 years from becoming Cyprus residents; extendable for two 5-year periods by paying €250,000 per period.

Capital gains: 0% except on disposals of Cyprus immovable property or shares in companies whose value derives primarily from Cyprus real estate.

Deemed Dividend Distribution: abolished for profits earned after 1 January 2026. This was the 70% deemed-distribution rule that historically triggered SDC on retained profits of Cyprus-owned Cyprus companies. Its abolition allows full retention of profits.

VAT: 19% standard rate, 9% on hospitality and passenger transport, 5% on certain foodstuffs and books. Mandatory registration above €15,600 turnover per year, or immediately for intra-EU supplies.

Stamp duty on MoA: abolished in 2026, reducing incorporation costs.

Cyprus has double-tax treaties with 65+ jurisdictions including all EU member states, the UK, US, Russia (post-2020 revised terms), India, China, and most of Eastern Europe and the Middle East.

Banking for Cyprus Companies

Cyprus business banking consolidated significantly in 2025–2026. The market is now dominated by two institutions plus a handful of smaller specialist banks and EMIs.

Eurobank Limited — formed on 1 September 2025 by the merger of Hellenic Bank and Eurobank Cyprus — is now the largest bank on the island, with assets above €28 billion and a 52-branch network. Full corporate banking offering: multi-currency accounts, SEPA and SWIFT, online banking, trade finance, and treasury services. The strong SME focus inherited from the Hellenic era makes Eurobank Limited a practical choice for mid-sized Cyprus companies. For non-resident-controlled applications, expect an in-person meeting requirement and 6 to 10 weeks processing.

Bank of Cyprus is the second pillar of the market and, following its March 2026 acquisition of the performing assets of CDB Bank, the primary domestic corporate bank. Works best for companies with a defined business plan, Cyprus-resident directors, and a professional introduction. Cold applications from newly incorporated shells with no Cyprus connection frequently stall.

Smaller Cyprus banks — AstroBank, Alpha Bank Cyprus, Cyprus Popular Bank — maintain niche offerings and sometimes onboard cases that the two majors decline, particularly for existing professional referrals.

International EMIs — Wise Business, Airwallex, Revolut Business (where a director has EEA residency) — work as primary or secondary accounts for most cf24 Cyprus companies without Cyprus-resident management. Fully remote onboarding, EUR multi-currency balances, integrated SEPA. Most newly formed Cyprus holding companies start with an EMI and add a Cyprus bank over time as the structure accumulates genuine Cyprus substance.

For holding-company structures specifically, the pattern we see most often is a Wise or Airwallex account for operating flows plus a Cyprus bank opened once the company has been active for a year — by which point the profile for Cyprus bank onboarding is significantly stronger.

Frequently Asked Questions

What is the corporate tax rate in Cyprus after the 2026 reform?

The Cyprus corporate income tax rate increased from 12.5% to 15% effective for tax years starting on or after 1 January 2026. The increase aligns Cyprus with the OECD's global minimum tax under Pillar Two. The IP Box regime continues to deliver an effective rate of approximately 3% on qualifying intellectual-property profits through an 80% deemed deduction under the modified nexus approach.

How long does it take to form a Cyprus company?

A standard private limited company is registered with the Department of Registrar of Companies within 10 to 14 working days from a clean filing. The Certificate of Incorporation is typically issued within 2 weeks of KYC clearance. Including Tax Identification Number issuance, VAT registration, UBO filing, and bank account opening, the full end-to-end timeline is 6 to 14 weeks — with the bank account being the principal variable.

Can a non-resident set up a Cyprus company?

Yes. Cyprus imposes no residency or citizenship requirements on shareholders or directors of a Cyprus limited company. A non-resident can be the sole shareholder and sole director. However, for the company to qualify as Cyprus tax resident under the "management and control" test, a majority of Cyprus-resident directors is typically required. As of 2026, the new "incorporation test" means any company formed under Cyprus Companies Law is automatically Cyprus tax resident from day one, simplifying the tax residency question.

What is the minimum share capital for a Cyprus company?

There is no statutory minimum share capital for a Cyprus private limited company. A nominal €1 share is sufficient to incorporate. Most Cyprus Ltds are incorporated with €1,000 authorised capital as a matter of practice, since DRCIP filing fees are calculated as a percentage of authorised capital — €1,000 is a sensible balance between regulatory comfort and minimising the capital-based fee.

What is the Cyprus non-domicile regime?

Individuals who become Cyprus tax residents but are non-domiciled under Cyprus inheritance law are exempt from the Special Defence Contribution (SDC) on dividends, interest, and rental income for up to 17 years from the date they become Cyprus residents. After 17 years, the regime can be extended by two consecutive 5-year periods by paying a €250,000 lump sum per period. For individuals taking dividends from a Cyprus company, the combined effect of non-dom status plus the 2026 SDC reduction is close-to-zero tax on dividend income for up to 27 years.

Is the Cyprus IP Box still worth using in 2026?

Yes. The IP Box regime continues unchanged through 2030. Qualifying intellectual-property profits — from patents, copyrighted software, certain utility models, and plant variety rights — receive an 80% deemed deduction under the modified nexus fraction. Combined with the new 15% corporate tax rate, the effective tax rate on qualifying IP income is approximately 3%. Eligibility requires genuine R&D activity attributable to Cyprus and tracking of qualifying expenditure under the nexus rules.

How long does it take to open a business bank account in Cyprus?

Typically 4 to 12 weeks for non-resident-controlled companies, and 3 to 6 weeks for companies with Cyprus-resident directors. The 2025 merger of Hellenic Bank and Eurobank Cyprus into Eurobank Limited means most corporate banking consolidates between Eurobank Limited and Bank of Cyprus. Both typically require at least one in-person meeting for non-resident applications. Many newly formed Cyprus companies open a Wise Business or Airwallex account first (fully remote, 5 to 10 days) and add a Cyprus bank once the structure has matured.

Get Started — Form Your Cyprus Company

A fixed-price quote in 60 seconds. Certificate of Incorporation within 2 weeks of KYC clearance. Dedicated Cyprus-qualified lawyer drafts the Memorandum. Bank or EMI introduction included.

Call +48 2222 5 2222 or email [email protected] to start.

If your timeline is tighter than a 2-week formation, our sister brand offers ready-made Cypriot limited companies — already registered, fully audited, and transferable to you in days.

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Content prepared by Julia Thompson, Corporate Client Service Specialist. Approved by Tomasz Bielski, Managing Director.