Cyprus
Form a Cyprus company from anywhere — 12.5% corporate tax, no WHT on dividends to non-residents, IP box at ~2.
Foreign Ownership Eligibility
Cyprus welcomes 100% foreign-owned companies
Fully remote formation — you never need to set foot in the country.
- 100% foreign ownership allowed
- No residency requirement for shareholders
- Remote formation possible via authorised agents
- Company secretary required (CY resident recommended)
- Registered office in Cyprus required
- EU member state — full single market access
Ownership
100% Foreign OK
Formation
100% Remote
Tax at a glance
Cyprus Tax Overview
12.5%
Corporate Income Tax
Among the lowest in the EU
2.5%
IP Box Effective Rate
80% deduction on qualifying IP profits
0%
WHT on Dividends
To non-residents (general rule)
0%
WHT on Interest
To non-residents (general rule)
0%
WHT on Royalties
Rights used outside Cyprus
20%
Capital Gains Tax
Only on Cyprus immovable property
17%
SDC on Dividends
Non-doms exempt; participation exemption available
19%
VAT (Standard)
65+
Double Tax Treaties
Broad network across EU, Middle East, Asia
€20,000
Stamp Duty Cap
Max per instrument; relates to CY assets only
Pros & cons
Advantages & Considerations
Key Advantages
EU & Eurozone member — full Single Market access, free movement of capital, Euro currency
12.5% corporate tax rate — among the lowest in the EU
IP Box at 2.5% effective rate — 80% deduction on qualifying IP profits, OECD-compliant
Notional Interest Deduction — equity financing gets a tax deduction comparable to debt
Participation exemption — dividends from subsidiaries exempt with no minimum holding period
Zero withholding tax on dividends, interest, and royalties to non-residents (general rule)
Capital gains on shares, bonds, and securities unconditionally exempt from CIT
Non-dom regime — up to 17 years of SDC-free passive income for foreign nationals
Tonnage tax — EU-approved shipping regime, exempt from all direct taxes until 2029
65+ double tax treaties — wide network that reduces withholding taxes globally
Common law legal system — based on English law, familiar to international investors
English widely spoken — primary business language for legal, accounting, and professional services
CySEC regulation — EU passporting for investment firms, forex, fintech, and crypto (MiCA)
No inheritance, estate, or wealth tax
Located between Europe, the Middle East, and Africa
Professional services costs 30–50% lower than UK, Ireland, or Luxembourg
Considerations
Small domestic market — population of approximately 1.26 million
Divided island — Northern Cyprus occupation creates legal complexities near the buffer zone
Banking due diligence — post-2013 crisis legacy; account opening can take 2–6 weeks
All companies must be audited — mandatory audited financial statements regardless of size
Registrar of Companies delays — processing times can be inconsistent
€350 annual company levy — payable regardless of activity, penalties for late payment
Pillar Two top-up — MNE groups with €750m+ revenue face 15% minimum effective rate
Island logistics — limited air connectivity versus continental EU for physical goods
Limited labour pool — may need international recruitment for specialised roles
Reputation perception — historical 'offshore' association (now outdated but still cited)
Transfer pricing compliance — full OECD documentation since 2022 adds compliance burden
SDC exposure after 17 years — non-dom exemption expires, triggering 17% on passive income
Structural Comparison
PRIVATE LTD
BRANCH
Incorporation Process
The process is strictly digital. Each stage builds on the previous one.
Choose entity type — Private Ltd is the default for most international structures
Name approval — submit proposed name to Registrar for uniqueness check
Prepare Memorandum & Articles of Association with objects clause
File incorporation documents — Forms HE1 and HE3 with the Registrar
Receive Certificate of Incorporation and HE company number
What you'll pay
Cost Architecture
Government Fees
Annual Ongoing
Professional Services
Still unsure about costs?
These are estimates — your actual cost depends on your structure
Every Cyprus setup is different. A 15-minute call with one of our specialists will give you a personalised cost breakdown — completely free.
Fintech & Banking
Can non-residents open accounts without visiting? NO.
Banking options for non-resident founders in Cyprus. Remote account opening availability varies by institution.
| Institution | Type | Ease for Non-Residents | Notes |
|---|---|---|---|
| Bank of Cyprus | Full-service commercial bank (largest in Cyprus) | Low (Visit Required) | Full corporate banking services; in-person meeting typically required for KYC |
| Hellenic Bank | Full-service commercial bank | Low (Visit Required) | Second-largest bank; strong SME and corporate services |
| Eurobank Cyprus | Subsidiary of Eurobank (Greece) | Low (Visit Required) | Corporate and private banking for international clients |
| Alpha Bank Cyprus | Subsidiary of Alpha Bank (Greece) | Low (Visit Required) | Corporate lending and trade finance |
Regulatory requirements
Annual Compliance Matrix
| Requirement | Deadline | Details |
|---|---|---|
Annual Return (Form HE32) | Within 28 days after AGM | Confirms company details — directors, secretary, shareholders, registered office |
Audited Financial Statements | Annually | All Cyprus companies must be audited under ISAs; statements prepared per IFRS |
Corporate Tax Return | 31 March of the second year following the tax year | Electronic self-assessment submission to Tax Department |
Provisional Tax — 1st Instalment | 31 July of the tax year | 50% of estimated current-year tax liability |
Provisional Tax — 2nd Instalment | 31 December of the tax year | Remaining 50% of estimated tax liability |
Annual Company Levy | 30 June each year | €350 payable regardless of activity; late payment: 10% penalty + 5% of outstanding |
VAT Returns | Quarterly | Quarterly electronic filing; payment due by 10th of second month after quarter end |
Beneficial Ownership Register | Ongoing | Maintain and update register of beneficial owners; submit to Registrar |
IP box facts
80% deduction on qualifying IP profits — effective tax rate of 2.5% (12.5% × 20%)
Qualifying IP: patents, copyrighted software, utility models, orphan drug designations
Non-qualifying: trademarks and marketing-related IP do not qualify
Fully aligned with OECD BEPS Action 5 — modified nexus approach
Qualifying income: royalties, licence fees, compensation, trading income from IP sale
IP may be legally or economically owned
Nexus fraction based on R&D expenditure — more in-house R&D means higher deduction
Capital gains on qualifying IP excluded from CIT altogether
Notional interest deduction facts
Deductible notional interest on new equity introduced after 31 December 2014
Rate: 10-year government bond yield (country where funds employed) + 5% premium
Capped at 80% of taxable profit from activities financed by the new equity
Gives equity financing a comparable tax benefit to debt financing
Applicable to Cyprus PEs of non-resident companies as well
Excluded from 'borrowing costs' for ATAD interest limitation purposes
Restricted NID cannot be carried forward — use it or lose it each year
Non-dom facts
Foreign nationals: exempt from 17% SDC on dividends, interest, and rental income
Applies for up to 17 years (becomes domiciled after 17 out of last 20 years in Cyprus)
Combine with 60-day residency rule — minimal physical presence required
60-day rule: spend ≥60 days in Cyprus, not >183 days elsewhere, maintain CY home
No SDC on passive dividends — even from Cyprus companies — during non-dom period
No inheritance, estate, or wealth tax in Cyprus at any time
Useful for holding company owners who also want lower personal tax
Frequently Asked
Speak with a Cyprus specialist
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