Frequently asked questions (FAQ) & Glossary

GDP Composition by Sector of Origin 2022

• Services: 83.7%
• Industry: 7.9%
• Construction: 6.3%
• Agriculture: 2.1%

Local authorised credit institutions:

• Ancoria Bank Limited
• Astrobank Public Company Limited
• Bank of Cyprus Public Company Ltd
• Cyprus Development Bank Public Company Limited
• Hellenic Bank Public Company Limited
• Housing Finance Corporation
• RCB BANK LTD*

Foreign authorised credit institutions and branches of foreign credit institutions from EU member states operating under the “European passport”:

• Αlpha Bank Cyprus Ltd
• Eurobank Cyprus Ltd
• National Bank of Greece (Cyprus) Ltd

• Societe Generale Bank-Cyprus Limited

• Banque SBA
• Central Cooperative Bank PLC
• EFG Bank (Luxembourg) S.A.
• First Investment Bank Ltd
• National Bank of Greece S.A.

• Arab Jordan Investment Bank SA
• Bank of Beirut SAL
• BankMed s.a.l.
• Banque BEMO SAL
• BBAC SAL
• BLOM Bank SAL
• Byblos Bank SAL
• Credit Libanais SAL
• IBL Bank sal
• Joint Stock Company Commercial Bank "Privatbank"*
• Jordan Ahli Bank plc
• Jordan Kuwait Bank PLC
• LGB Bank S.A.L.

Representative offices

• EFG Private Bank Limited

Corporate bank account: KYC and due diligence requirements for legal entities

• Memorandum and Articles of Association;
• Certificate of Incorporation;
• Certificate of Registered Office Address;
• Certificate of Directors and Secretary;
• Certificate of Shareholders;
• Certificate of Good Standing;
• Proof of listed status on the stock exchange (if applicable);
• Board Resolution to open a bank account;
• Board Resolution with name(s) of the Authorized Signatory(ies) authorized to open a bank account;
• Latest financial statements filed with the relevant authorities (if applicable);
• Statement of business activities and location of business operations of the legal entity;
• Statement of expected counterparties for inward and outward transactions, including the estimated annual incoming and outgoing turnovers;
• Group structure (if applicable);
• Corporate structure leading up to the ultimate beneficial owner(s) (UBOs) of the legal entity.
• Certified copy of the passport;*
• Original or certified copy of the proof of address (i.e. utility bill as a proof of applicant's residential address), not older than 3 months;*
• Bank reference letter, not older than 3 months;*
• UBOs CV;
• UBOs source and value of wealth supported by relevant documents (e.g. bank statement, title deeds, etc);
• UBOs tax return for the last two years.

Personal bank account: KYC and due diligence requirements for physical persons

• Certified copy of the passport;
• Original or certified copy of the proof of address (i.e. utility bill as a proof of applicant's residential address), not older than 3 months;
• Bank reference letter, not older than 3 months;
• CV;
• Source and value of wealth supported by relevant documents (e.g. bank statement, title deeds, etc);
• Tax return for the last two years.

Step 1

• Obtaining the approval from the RoC for the name of the company.
• Preparation of incorporation documents and relevant forms: i) Memorandum of Articles of Association (MoAA), which must be submitted in Greek language14 and contain the information on the business activities of the company; ii) shareholders’ KYC information and documents, as well as the share capital and distribution of the shares; iii) Appointed Company Officers (ACOs) i.e. Directors and Secretary KYC (it is not required to have a Cypriot national as ACO, however, it is required that ACOs, specifically the Secretary, have sound knowledge of Cyprus Companies Law Cap.113); iv) Registered Office Address of the company (Cyprus company must maintain a Registered Office Address in Cyprus).

Step 2

• Incorporating the company – registering Director(s), Secretary and Shareholder(s), as well as the Registered Office Address, and submitting the documents with the RoC.
• Collecting the incorporation certificates: i) Certificate of Incorporation; ii) Certificate of Registered Office Address; iii) Certificate of Directors and Secretary; iv) Certificate of Shareholders, and v) certified copy of the MoAA.

Step 3

• While the Registered Office Address of the company must be in Cyprus, the operations can be ran from anywhere in the world. To fully utilize Cyprus tax benefits, it may be considered running the business from Cyprus and opening an office, setting up the infrastructure, obtaining relevant licenses and insurance coverages, and hiring the staff.
• Cyprus company may have a bank account in a local bank. The duration and overall process to open a corporate bank account will be affected by the actual location of the operations, i.e. the business address.

Step 4

• BO Register;
• Corporate Income Tax;
• VAT;*
• Social Insurance and GHS contributions;*
• Trademark*

Maintaining the company

• Annual company levy of €350, due 30^th June each year;
• Prepay corporate income tax in 2 instalments: 31^st July and 31^st December of reporting tax year, and the remaining balance until 1^st August of the next tax year;*
• Submit VAT declarations and pay VAT liability before the 10^th day of the second month following the end of each VAT reporting period (i.e. approximately 40 days after VAT reporting period end);*
• Annual General Meeting (AGM) – the first AGM must be held, to review important topics and approve financial statements, within 18 months from the date of incorporation of the company, and then annually, not later than 12 months after previous AGM;
• Prepare and submit to RoC the Annual Return and financial statements approved at the last AGM, within 28 days from its drafting date;
• Prepare and submit to the Cyprus Tax Department the Tax Return based on the audited financial statements by 31^st March of the year following the year after the reporting tax year (i.e. 15 months after the tax year end);
• Keep at registered office or at a location designated by the directors: i) accounting records; ii) Register of members; iii) Register of directors and secretary; iv) Register of directors’ interests (in shares of the company); v) Register of debentures and charges; vi) Minutes of directors’ and shareholders’ meetings.
• Company and its Appointed Company Officers (ACOs) have an obligation to inform the Registrar of Companies (RoC) of any changes of the company’s particulars, e.g. change of name, change of directors’ and secretary details, change in share capital, change of Registered Office Address, change of shareholders, change of UBOs, amendments of the MoAA etc, within 14 days from the date of change.
• Annual Business Shield Insurance;*
• Annual Professional Indemnity Insurance;*

• Income from dividends is tax-free;
• Profits from the sales of shares are tax-free;
• Profits from the activities of a Permanent Establishment (PE) abroad are tax-free;
• Dividends and interest paid to non-resident individuals and/or corporations are tax exempt;
• Capital gains on disposal of capital assets are tax-free;
• There are no thin capitalization rules.

• for payment within 2 months from the 30^th of June (i.e. up until 31^st August), the charge imposed equals to an additional 10% on the original fee, thus making the total amount to be paid €385;
• for payment within 5 months from the 30^th June (i.e. up until 30^th November), the charge imposed equals to an additional 30% on the original fee, thus making the total amount to be paid €490;

• accounting records;
• Register of members;
• Register of directors and secretary;
• Register of directors’ interests (in shares of the company);
• Register of debentures and charges;
• Minutes of directors’ and shareholders’ meetings.

• words;
• persons' names;
• drawings;
• letters;
• numbers;
• illustrations;
• colours;
• shape of product;
• shape of its packaging; or
• sounds.

• Agriculture & veterinary services;
• Basic business establishment;
• Construction & engineering;
• Crossborder provision of services;
• Education;
• Fireworks & explosives;
• Health, welfare & beauty;
• Mass media communication;
• Metrology;
• Professional services;
• Radiocommunication services;
• Transport & logistics;
• Tourism & leisure;
• Wholesale & retail trade.

• Establishing physical presence of your company (e.g. statutory requirements; accounting, audit and tax support; legal support; corporate structure and banking; premises, operational infrastructure and logistics, staffing, etc);
• Acquiring residence permits and personal residence, as well as ensuring the requirements for your dependents and/or yourself are met (e.g. education, healthcare, lifestyle & leisure, insurance, transportation, etc).

• Determine company’s: i) name; ii) directors and secretary; iii) address of registered office; iv) members and share capital; v) objects of the company; and vi) MoAA.
• Submit the application to the Registrar of Companies (RoC) and obtain a temporary certificate of continuation.
• Submit the application to the RoC for the certificate of continuation within 6 (+ 3) months from the date of issue of the temporary certificate of continuation.
• Provided that the RoC requirements are met and the application and supporting documents submitted are in accordance with the Companies Law (Cap. 113), the certificate of continuation is issued, certifying that the company has been registered as continuing in Cyprus and, any previously issued certificates cease to have any legal effect.
• Register the company and obtain relevant permits, in accordance with regulatory requirements: i) BO Register; ii) corporate income tax; iii) VAT, if applicable; iv) Social Insurance and GHS; v) Trademark.; and vi) business permits and licensing, if applicable.

• favourable IP-box tax regime;
• strong IP protection through domestic legislation and a network of EU and international agreements;
• wide access to markets;
• pro-business environment;
• multilingual, tech-savvy workforce;
• low operating costs;
• access to EU funded programs and Angel Investors;
• multiple tax incentives and a revised policy for employment permits.

• The responsibility for the true and accurate submission of the UBOs information lies with the legal entity itself and its officers. Detailed information for the submission of information is provided on the official website of the Department of Registrar of Companies and Intellectual Property (RoC) of the Republic of Cyprus: https://www.companies.gov.cy/en/services/451
• Service providers can submit the UBOs information on behalf of the legal entity and its officers.

Double Taxation Agreements

• immovable property in Cyprus;
• shares of companies (not listed on a recognized stock exchange) owning immovable property in Cyprus;
• disposal of shares of companies which directly own* an immovable property in Cyprus and derive at least 50% of their market value from the relevant immovable property; and
• sale agreement of immovable property in Cyprus.

• A company is Cyprus tax resident if it is managed and controlled in Cyprus.
• All companies that are tax residents in Cyprus are taxed on their income accrued or derived from all sources in Cyprus and abroad.
• A non-tax resident company is taxed on income accrued or derived from business activity which is carried out through a permanent establishment (PE) in Cyprus and on certain other incomes arising from sources in Cyprus.

• 5%, of which 8.3% is paid by the employee, 8.3% by the employer and 4.9% from the Consolidated Fund of the Republic of the contribution year beginning on or after 1st January 2019.
• 8%, of which 8.8% is paid by the employee, 8.8% by the employer and 5.2% from the Consolidated Fund of the Republic for the contribution year beginning on or after 1st January 2024.
• 1%, of which 9.3% is paid by the employee, 9.3% by the employer and 5.5% from the Consolidated Fund of the Republic for the contribution year beginning on or after 1st January 2029.
• 4%, of which 9.8% is paid by the employee, 9.8% by the employer and 5.8% from the Consolidated Fund of the Republic for the contribution year beginning on or after 1st January 2034.
• 7%, of which 10.3% is paid by the employee, 10.3% by the employer and 6.1% from the Consolidated Fund of the Republic for the contribution year beginning on or after 1st January 2039.

• 5%, of which 15.6% is paid by the self-employed and 4.9% from the Consolidated Fund of the Republic, from the first Monday of the contributions’ year 2019.
• 8%, of which 16.6% is paid by the self-employed and 5.2% from the Consolidated Fund of the Republic, from the first Monday of the contributions’ year 2024.
• 1%, of which 17.6% is paid by the self-employed and 5.5% from the Consolidated Fund of the Republic, from the first Monday of the contributions’ year 2029.
• 4%, of which 18.6% is paid by the self-employed and 5.8% from the Consolidated Fund of the Republic, from the first Monday of the contributions’ year 2034.
• 7%, of which 19.6% is paid by the self-employed and 6.1% from the Consolidated Fund of the Republic, from the first Monday of the contributions’ year 2039.

• 4%, of which 14% is paid by the voluntary insured person and 4.4% from the Consoli- dated Fund of the Republic, from the first Monday of the contribution year 2019.
• 7%, of which 15% is paid by the voluntary insured person and 4.7% from the Consoli- dated Fund of the Republic, from the first Monday of the contribution year 2024.
• 21%, of which 16% is paid by the voluntary insured person and 5% from the Consoli- dated Fund of the Republic, from the first Monday of the contribution year 2029.
• 3%, of which 17% is paid by the voluntary insured person and 5.3% from the Consolidated Fund of the Republic, from the first Monday of the contributions’ year 2034.
• 6%, of which 18% is paid by the voluntary insured person and 5.6% from the Consolidated Fund of the Republic, from the first Monday of the contribution year 2039.

• 5%, of which 16.6% is paid by the voluntary insured person and 4.9% from the Consolidated Fund of the Republic for the contribution year beginning on or after 1st January 2019.
• 8%, of which 17.6% is paid by the voluntary insured person and 5.2% from the Consolidated Fund of the Republic for the contribution year beginning on or after 1st January 2024.
• 1%, of which 18.6% is paid by the voluntary insured person and 5.5% from the Consolidated Fund of the Republic for the contribution year beginning on or after 1st January 2029.
• 4%, of which 19.6% is paid by the voluntary insured person and 5.8% from the Consolidated Fund of the Republic for the contribution year beginning on or after 1st January 2034.
• 7%, of which 20.6% is paid by the voluntary insured person and 6.1% from the Consolidated Fund of the Republic for the contribution year beginning on or after 1st January 2039.

• Resides in the Republic of Cyprus for not less than 60 days during a tax year;
• Conducts a business activity in the Republic and/or is employed in the Republic and/or maintains an office for a company tax resident in Cyprus at any time during the tax year;
• Maintains a permanent residential property in the Republic (either purchase or rent) during the tax year.

• A tax-resident individual is taxed on income accruing or arising from sources both within and outside Cyprus.
• A non-tax-resident individual is only taxed on income accruing or arising from sources within Cyprus.

• Accounting records must show all sums of money received and expended, all sales and purchases, assets and liabilities.
• In accordance with the Cyprus Companies Law Cap.113, books of accounts which are considered necessary for the preparation of financial statements must be kept.*

• Statutory Audit for companies registered in Cyprus;
• Audit of Financial Information, including statements prepared in accordance with International Financial Reporting Standards (IFRS);
• Review of financial statements;
• Internal Audit;
• Due-diligence for specific purposes.

• Bookkeeping services;
• Assistance with the preparation of Statutory Financial Statements;
• Assistance with the preparation of Management Accounts;
• Preparation of Financial Statements according to International Financial Reporting Standards (IFRS);
• Supervision of accounting departments;
• Payroll services.

Auditor is licensed and registered with ICPAC

• Only qualified auditors, which have acquired a license pursuant to the provisions of the Auditors Law of 2017, registered with the Institute of Certified Public Accountants of Cyprus (ICPAC) Registry, and holders of a practicing certificate and audit qualification can practice the accounting and audit profession in Cyprus

Specific needs of the business

• Industry experience is essential for an efficient and timely audit.
• Auditors with membership in global audit & accounting networks have significant background in working with businesses in various industries and jurisdictions, bringing valuable insight and knowledge.

Reliability and reputation

• In addition to education, qualifications, competence, years of experience and continuous professional development, good auditors are praised for their integrity, ethics and objectivity.
• Beyond an internet search, referrals, reviews and word-of-mouth enquiries, it is prudent to question the methodology, audit planning process and ability to meet deadlines, to ensure that the audit firm has a good reputation.

Technology and innovation

• Technology-enabled audit firms can perform the audit with advanced computer-assisted auditing techniques and practices, in addition to being able to hold virtual meetings with international clients.
• Tech-savvy auditors can offer an advanced insight into business performance, based on data analysis and interpretation.

Relationship, communication and continuous support

• A good auditor should have the ability to effectively and clearly communicate, especially when it comes to any potential concerns and/or issues.
• Working with a consistent and approachable team is invaluable, hence, building a good and trusting relationship with the auditor ensures an open line of communication and prompt, professional support.

Accountant is registered with ICPAC

• Professional accountants in Cyprus are registered with the Institute of Certified Public Accountants of Cyprus (ICPAC) The principal objectives of ICPAC include provision of an organisational framework for all professional accountants, adherence to the Code of Ethics and continuous professional development and keeping up-to-date on issues relevant to accounting, audit and other business and regulatory matters.

Specific needs of the business

• In addition to bookkeeping, preparation of financial statements and management accounts, payroll and submitting tax returns, accountants can provide assistance with growth planning and development advice.
• Accountants with membership in global audit & accounting networks are considered a great resource to a business, as they have significant background in working with businesses in various industries and jurisdictions.

Reliability and reputation

• In addition to education, qualifications, competence, years of experience and continuous professional development, good accountants proactively assist their client’s business and abide with the Code of Ethics, i.e. integrity, objectivity, professional competence and due care, confidentiality and professionalism.
• Beyond an internet search, referrals, reviews and word-of-mouth enquiries, it is prudent to question the transparency, company regulations and statutory requirements, accounting process, as well as the ability to meet deadlines, to ensure that the accounting firm has a good reputation.

Technology and innovation

• Technology-enabled accounting firms utilize advanced computer-assisted accounting techniques and practices, in addition to being able to hold virtual meetings with international clients.
• Technology advancements have increased accountants’ ability to interpret data efficiently and effectively.

Relationship, communication and continuous support

• A good accountant makes an effort to thoroughly understand the business – financial situation, regulatory requirements, business operations, workload, etc. With strong work ethic, accuracy and efficiency, an accountant plays a pivotal role in effectively communicating essential data for business decisions.
• Working with a consistent and approachable team is invaluable, hence, building a good and trusting relationship with the accountant ensures an open line of communication and prompt, professional support.

• 1^st AMLD 1991 – Credit and Financial Institutions, Drugs-Related Offences (1^st EU AML Directive);
• 2^nd AMLD 2001, Transposing Jun 2003 – Collaboration with the FATF (2^nd EU AML Directive);
• 3^rd AMLD 2006, Transposing Dec 2007 – Enhanced Due Diligence, Service Providers & Terrorist Financing (3^rd EU AML Directive);
• 4^th AMLD 2015, Transposing Jun 2017 – Risk Based Approach & Tax Havens (4^th EU AML Directive);
• 5^th AMLD 2018, Transposing Jan 2020 – Transparency, Digital Currencies, UBO Registry & Exchange of Information (5^th EU AML Directive);
• 6^th AMLD December 2020, Transposing June 2021 – Focuses on Criminal Offences and Penalties (6^th EU AML Directive).

• heads of State, heads of government, ministers and deputy or assistant ministers,
• members of Parliament or of similar legislative bodies,
• members of governing bodies of political parties,
• members of Supreme courts, of constitutional courts or of other high-level judicial bodies, the decisions of which are not subject to further appeal, except in exceptional circumstances,
• members of courts of auditors or of the boards of central banks,
• ambassadors, charges d’ affaires and high-ranking officers in the armed forces,
• members of the administrative, management or supervisory bodies of State-owned enterprises,
• directors, deputy directors and members of the board or equivalent function of an international organisation,
• Mayors.

• The spouse, or a person considered to be equivalent to a spouse, of a PEP,
• The children and their spouses, or persons considered to be equivalent to a spouse, of a PEP,
• The parents of a PEP.

• Is known to have joint beneficial ownership of legal entities or legal arrangements, or any other close business relations, with a politically exposed person, or
• Has sole beneficial ownership of a legal entity or legal arrangement which is known to have been set up for the de facto benefit of a politically exposed person.