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A Company and a Bank Account in Cyprus: 2 in 1

calendar 7/12/2021 8:00:00 AM
author Admin System

Cyprus is one of the smallest countries in the world, yet one of the most important financial and commercial centers. This country has become one of the top ones in recent years due to its reliable legal system, favorable tax laws, and double taxation treaties. Likewise, Cyprus offers highly developed business services and company registration procedures. Being one of the world's most popular investment destinations it also offers a great environment for the creation of personal and corporate bank accounts.

As Cyprus is a member state of the European Union, companies registered in Cyprus enjoy all the benefits of doing business in the European region. Additionally, the island has well-trained professional staff who are fluent in English with Russian being another popular business language. Creating a holding company or other types of companies in Cyprus is quick and easy. Here you will find other general benefits of opening a company in Cyprus:

-Low corporate tax of 12.5% on net income, 

-Tax exemption on securities (stocks, bonds, etc.), 

-Cyprus is a major jurisdiction due to its extensive network of double taxation agreements with exporting and emerging countries, 

-Favorable tax rate conditions. 

-In addition, 100% foreign ownership is permitted and designated services are provided.

Another advantage of registering a Cypriot company is that the national law allows investors to remain anonymous and to hold their assets under international trusts, for instance. 

The investor can therefore be the beneficiary of a Cypriot company, but not necessarily a registered shareholder of the company. Thus, a local person or company could be a candidate partner who owns assets in their own name for the benefit of a shareholder who genuinely wishes to remain anonymous.

Likewise, a company registered in Cyprus may have its headquarters as virtual offices, private phone lines, fax machines, email accounts, and offices to meet with clients. Furthermore, if you wish, the Cyprus company can be closed in very simple steps. Yes, that means you can remotely manage your Cyprus business from the comfort of your office in your home country.


Taxes

In addition to the low corporate tax rate (12.5%), Cyprus law offers many tax advantages over other European countries. The 0% tax is levied on profits from the settlement of interest income, dividends, stocks, bonds, corporate bonds, or other securities. Except for capital gains related to real estate in Cyprus, there are no corporate restructuring taxes such as divisions, asset transfers, and stock exchanges. The same goes for the profits of foreign branches, but there are some restrictions.

However, when opening a company in Cyprus we could summarize the tax requirements as follows:

-Annual fee (special tax): EUR350, to be paid in June each year. 

-Corporate tax: 12.5% of the net profit for companies resident in Cyprus or 0% for companies not resident in Cyprus.

-Capital Gains Tax: 20% on immovable property situated in Cyprus, 0% on the movable property (other than shares representing immovable property situated in Cyprus).


Requirements to Open a Company in Cyprus

The corporate requirements include one minimum share capital, and the minimum number of shareholders is one. This is the same as the minimum number of directors required. Likewise, a company secretary is required when opening a Cypriot company. 

If you are considering this option, you should have a registered office in Cyprus as well. There is no requirement for local directors or secretaries. However, if a Cypriot company is administered and managed in or from Cyprus, the Cypriot company becomes a resident in Cyprus for tax purposes. The companies considered as Cyprus tax residents can take advantage of all Cyprus tax benefits. 

Finally, you will need to make a government register of directors and shareholders; as well as submission of annual returns and audited accounts.


What Documents are Needed to Register a Company in Cyprus? 

Registering a business in Cyprus is easy. The establishment of a Cypriot company consists mainly in: the drafting of its Memorandum and Articles of association, the appointment of the directors and secretaries of the company and, if necessary, the drafting of the shareholders' agreements. To do business in Cyprus, the company must be registered in the Cyprus Registrar of Companies. Once you have completed the Cyprus company incorporation process, you will need to submit an application to this institution to register as a Cypriot company, and the first step is the name approval.

Once your company name has been approved by your registrar, you will need to submit the following documents to register the establishment of a company in Cyprus:

1.HE1 Declaration Form (signed in court by a qualified/licensed lawyer). 

2.HE2 form related to the company's registered office. 

3.The HE3 form contains information on the directors and secretaries of the company. 

4.The two original Greek Memorandums and Articles of Association must be signed by the shareholders. Shareholder signatures must be certified by witnesses and signed by the licensed attorney who prepared the before mentioned documents. 

All documents and information necessary to establish and register a Cypriot company are based on the compliance provisions of each European regulation in the matter, including the European Anti Money Laundering Directive. 

The following KYC documents are required for every shareholder, ultimate beneficiary and any other natural person or legal entity that is going to manage a registered Cypriot company: 


If the For Individuals

For a legal entity

1. A certified copy of your international passport or valid ID

2. Proof of address, full address (including postal code) and a certified true copy or recent original (within 3 months) of the person's name on the passport. The following documents will be accepted as proof of address:

 • Utility bills (electricity, gas, water, landline bills or municipal utility bills)

 • Residence certificate issued by the residents' registration office.

3. Original bank recommendation within 3 months (standard text, no account balance required).

4. CV showing the professional career.

5. Source of wealth

1. Basic documents recently certified to confirm the existence and registration number of the company.

 2. Basic documents and recently certified by apostille indicating the administrator, the secretary, the real estate office and the registration (extract from the register, register of companies, etc.) and apostilled copies of  the Memorandum and Articles of incorporation.

3. Certified copies of passports and certified copies of bills for the last three months from shareholders, directors, secretaries, candidates and other related persons.

4. Financial statements or the like.


How Fast is the Process?

The process of registering a company in Cyprus is very simple, easy to understand and fast, which is a significant advantage of Cyprus over other countries. The first step in the process is the approval of the company name by the Companies Registrar. 

It only takes a few business days for the name to be approved. Once approved, you will need to complete the required documents with the registrar and from that date it will take approximately 5 business days to complete the process. On average it takes around 10 days in total. 

During this process, shareholders of the company sign a memorandum of understanding, and then an application is presented to the Registrar. At the time of registration, the Registrar issues a certificate of incorporation, a certificate of registered address as well as the Articles of Association. 

Please note here that the original document is in Greek, but the certificates can be issued in Greek or English upon request. 

If you are not sure about how to proceed in this aspect, do not worry, our local experts got you covered. Please do not hesitate to contact us. 

Enquire now


Opening a Bank Account in Cyprus

However, a company is nothing without a bank account if you want to run a business for a long time. Therefore, we wanted to show you general but worthy information about this particular topic. 

Cyprus's banking system consists of the Central Bank, which not only allows other banks to operate domestically but also supervises their actions. The types of banks that operate in Cyprus include private national banks, but foreign banks also operate through branches and representative offices. 

The key legal frameworks that regulate banking activities in the country are the Central Bank Law and the Banking Law.

Opening a bank account in Cyprus is not easy. But we should note that the Cyprus banking system has undergone great changes and has led to its development. Nowadays, opening a bank account in Cyprus means less time and less time for individuals and businesses. The banks also consider the needs of a non-resident person in this process. 

An interesting thing to keep in mind about opening a bank account in Cyprus is that local financial institutions have English-speaking staff, which makes communication easier.

On the one hand, Cypriot citizens and non-residents can open a personal bank account based on ID, application, and recent utility bills. On the other hand, Cyprus and companies can open a bank account in the country based on the registration certificate and other information required by the bank of their choice.


Aspects to Consider when Selecting a Cypriot Bank to Open an Account

There are several things to consider when choosing a bank to open a Cypriot bank account. First, you need to check the conditions of each bank. For instance, a person attempting to open a personal bank account may be required to make a minimum deposit when opening the account. The services available to become a customer of a bank should not be overlooked and can be an important aspect in choosing a bank. 

Since you are opening a company in Cyprus, you should also consider the possibility of transferring funds abroad, especially if your company has foreign shareholders. 

Access to online banking services is also an important aspect when opening a bank account in Cyprus, and several banks offer such services. However, some actions are restricted and major changes may include personal access to the bank. 

Finally, we want to mention that physical presence (substance) is required by the majority of the banks when opening a bank account in Cyprus. 

By physical presence, it means that the company will have to meet the following criteria:

-At least one registered employee (both employment agreements and employments’ confirmations from official authorities (such as social insurance and other confirmation) will be requested by the banks)

-Office spaces (lease agreement or title deed of the building will be requested by the bank)

-Utility bill on the name of the company (only landline, electricity, water and internet services are acceptable by the banks)

-Website (not necessary, but it would be preferable by the banks).


Requirements and Documents to Open a Corporate Bank Account in Cyprus

When registering a business in Cyprus, it is mandatory to open a corporate bank account as part of the business establishment process. First, the professional bank account will be used to deposit shares for future businesses and then for business transactions. The process of opening a corporate bank account in Cyprus is as easy as opening a personal bank account, except that the company has to provide some additional documents.

In order for a company to be able to open a bank account in Cyprus, it must submit the following documents:

-Memorandum and Articles of Association

-Certificate of Incorporation

-Certificate of Good Standing for companies registered abroad if over two years old

-Certificate of Directors & Secretary

-Certificate of Shareholders

-Certificate of Registered Address

-Directors’ and UBOs’ passports and utility bills are required as well. 

-Official structure of the group/ownership leading to the ultimate beneficial owner

-Copy of Corporate Register 

The bank may ask for the Trust Deed between the ultimate beneficial owner(s) (UBO) and the registered shareholder(s) acting as nominees (if applicable) as well as further information on the legal entity and its transactions (i.e. source of funds, destinations for the payments, etc.)

For each beneficial owner, director and authorized signatory will be needed:

-A notarized copy of the passport of the applicant.

-The original or certified true copy of the utility bill certifying the address of the applicant's place of residence (up to 3 months). 

-Bank reference letter (up to 3 months old).

-Source of wealth (tax declaration and/or employment contract and/or bank statements, etc.).

-Signed application form.

-Biography (CV).

In general, Cypriot banks request these documents as part of their Know Your Customer (KYC) procedures. As you may know, the objective of the KYC guidelines is to prevent banks from being used for money laundering purposes. 

Besides all these documents, for the companies incorporated in Cyprus, appropriate measures must be taken to demonstrate that the company is managed and controlled in Cyprus and that substantial commercial activities are carried out in Cyprus. When opening a Cypriot bank account you must consider this aspect, since it is one of the main requirements.

The process to open a bank account in Cyprus, including corporate bank accounts, can take a month and over. You would need to have all the requirements and documents in order when starting the application for the process not to delay a lot. 

And again, our local partners can help you with this task. Furthermore, they can verify all documents you provide to your bank, including corporate and/or personal documents; fill out all banking forms and send them back to you for signature, among other services. 

If you are ready to take a step forward and benefit from all that Cyprus has to offer in these sectors, Mundo and our partners can be your guide in this process. We will follow the company’s registry and account opening processes until you receive your approval, account designation, and a bank account number.

Contact us right now!

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