7 Step Guide for Cyprus Company Set Up after Brexit
Here comes your 7 Step Guide for Cyprus company set up after Brexit: Now that the United Kingdom (UK) has officially withdrawn from the European Union (EU), many British people, including business owners, entrepreneurs and also those ready to retire, are looking around the European Union in preparation for leaving the UK.
If that’s you, and you are thinking about a Cyprus company set up after Brexit, this article by My Kypros Home will give you all the information you need to get started and make your Cyprus business a reality.
Why Should You Set Up a Company in Cyprus?
There are many reasons why a Cyprus company set up is an excellent idea. First, setting up a business in Cyprus is relatively straightforward, even if you’re from the UK or any other European country. More than that, Cyprus is considered to be one of the strongest business centers in all of the EU, with one of the lowest corporate tax rates to be found at 12.5%.
According to the World Bank’s annual 2019 report, Cyprus is ranked #57 in terms of how easy it is to do business here. Cyprus is also one of Europe’s most important trading hubs due to its geographical location, with a total Foreign Direct Investment (FDI) stock of 224 million USD reported in 2018.
If you or any employees that may come with you to Cyprus are worried about double taxation you’ll be happy to know the following: This Jewel of the Mediterranean, along with 50 other countries, signed double tax treaties so that double taxation can be avoided between these countries. Also, in 2008 Cyprus joined the Economic and Monetary Union, bringing with it monetary transparency and eliminating the risk of exchange rates being vastly different.
This is a great time to point out that there are already many international and multinational banks operating in Cyprus that can help you with funding and capital once your business has started. The reason they are here already is simple: economic freedom, a highly-trained and educated base of citizens and operating costs that are among the lowest in all of the EU.
Cyprus also offers a residency by investment program that allows UK investors to set up a new company and have a faster path to residency and, later, citizenship through the investment that they make. Throw in the fact that Cyprus has an emerging economy and legislation that highly favors foreign investors and you can easily see why setting up a company in Cyprus is a good choice.
Is it Difficult to Move Your Existing UK Company to Cyprus?
One very favorable fact about moving an existing UK company to Cyprus is that Cyprus follows the UK’s common law system. This is because Cyprus was formerly a British colony. Due to that, the courts in Cyprus follow all of the procedures and precedents that have been established in the UK. That includes the UK’s accounting system and VAT principles.
Further, corporate law in Cyprus is also based on Britain’s system, with the same regulatory framework, making it much easier to take your existing UK business and move it to Cyprus with only very small changes to your daily operations.
Moving Your Employees to Cyprus
If you’re moving your existing UK business to Cyprus chances are you’ll want to relocate some, or all, of your employees also. As with the tax and law systems, the immigration and visa rules that your employees will encounter in Cyprus are simple, straightforward and easy to accomplish. And if you ever want a helping hand with that, My Kypros Home is right there for you.
At this time, approximately 70,000 British expatriates are living in Cyprus. Once your employees start arriving, you should instruct them to start the paperwork to get their MEU1or MEU3 visa in order to become a lawful resident of the country. MEU1 is only valid until the end of 2020 during the transition phase. Afterward, only the MEU3 will be accepted (permanent residency permit for non-EU).
What Types of Business Entities Can You Register in Cyprus?
Another excellent reason to move your existing UK company to Cyprus is that registering your business is straightforward. Any business owner, including UK entrepreneurs, can register
- Cyprus Company (LTD)
- Branch of a Foreign Company
- Sole Proprietorship
- Cyprus International Trust
A wise decision would be to seek the counsel of a Cyprus law firm before you start so that they can guide you, including choosing a proper, unique name for your business (or registering using the existing name of your business). My Kypros Home is here for you if you require assistance with this.
7 Basic Steps For a Cyprus Company Set Up
As with any other country in the EU, there are certain procedures, rules, and laws that you must follow to open a business in Cyprus. As we said, it’s relatively straightforward since the laws here are very similar to the UK. Nevertheless, these procedures must be followed in order to set up your business correctly and avoid legal problems in the future.
- A unique trading name that reflects the activity of your business must be reserved. It is recommended that you submit at least 3 names should 1 or more of your choices not be approved.
- Memorandum and Articles of Association documents must be drafted. This is most important for a Cyprus Ltd. and should contain information about
- Company Directors
- Share Capital
- Distribution of shares among stockholders
- Income Tax
- Financial Statements
- Keep in mind that these documents can be in either Greek or English. Also, it is necessary to have them notarized.
- A corporate bank account must be opened with a local Cyprus bank. All share capital must be deposited here. Alternatively, you can register your company through an agency. In this case, you can also use a foreign business bank account.
- The Director and Secretary of the company must be appointed. Note that, in Cyprus, all businesses must have a secretary. It can be the same natural or legal person.
- Submit all company registration and procedure documentation. It’s a very good idea to have this documentation and paperwork looked over by an attorney before submitting to reduce any chance of error and ensure that the business license is issued in a timely fashion with no delays.
- The new company must be registered for tax purposes, including VAT, social insurance and pensions. Once this is completed a tax identification number will be issued for the business.
- Wait to receive your new Business License so that the company can start actively functioning.
Once all of these steps have been completed and your new business license has been received your business can then start hiring any new personnel needed to perform all business duties, tasks, and related activities.
How To Hire Employees for your New Business in Cyprus
Depending on the type of business you open you may need several employees or several dozen. Before you begin hiring there are a few things you need to know and a few rules and regulations to follow.
Any foreign employee, so anyone you bring from the UK or elsewhere, must have received their residence permit before they can be hired. To do this, you must submit several documents at the Cyprus Department of Labour, including the potential employee’s.
- Form M58 signed by the employer and stamped
- Form M64 signed by the employer and stamped
- Copy of the passport
- Original employment contract
- Original Clean Criminal Record Certificate
- Original Medical Certificates
- Bank guarantee (350€ – 850€ according to the country of origin)
- List of the company’s personnel (existing + new applicants)
- Company’s audited financial statements of the previous year
- A submission fee of 34,17€ for each application
In deciding whether approval is granted, the Department usually takes into account several factors, most importantly the availability of suitably qualified local personnel.
Note that any direct shareholders must also be registered at the Civil Registry and Migration Department. In the district where the business resides, you will need an administrative office.
As far as capital and financial stability are concerned, all of the capital sources you have for the new business must be 100% transparent and you must be able to provide annual balance sheets to prove your financial stability. It may seem like a lot but, once all of this paperwork is complete, hiring employees will be much the same as in the UK.
Paying Business Registration Fees for your New Cyprus Company
As with any business in Europe or the UK, there are certain fees that must be paid. Some are 1-time fees and some are annual fees. They include:
- The registration fee for the company
- Lawyer/agency fee
- Annual company maintenance fees (350€)
- Annual Accounting fees
As a foreign company, there are several other services that may or may not incur costs and fees, including nominee services.
Brexit Has Happened. Cyprus is Ready!
Whether or not you believe that Brexit was a good thing or the worst thing that has happened to the United Kingdom, here in Cyprus we are ready to help you set up your new company and make Cyprus your new home.
With laws that are very similar to Britain’s, many distinct advantages for business owners and the kind of climate and weather that can only be described as “wonderful”, Cyprus is an excellent choice for both entrepreneurs and existing business owners looking to leave the UK in search of new opportunities.
If you have any questions or are looking for assistance with your Cyprus company set up, the professional team of My Kypros Home is here for you!