A holding company does not produce any goods or services of its own. Its entire purpose is owning shares in other companies. A holding company is used as a strategy for minimizing the risk of loss of assets, equity and finances.

A Cyprus Holding Company is able to enjoy a large list of legal and tax benefits that can keep more of its profits in the Company, which will allow it to grow at a faster rate. If the holding company is being used as a place to hold and store wealth then moving to a favourable tax regime, such as Cyprus, can allow you to grow your money faster as you are able to pay less tax on your profits.

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The regulations of carrying out business in Cyprus include having a number of business names that you intend to use to register your company. These names are sent to the offices of the registrar for searching of the register of company names. If the names are used, the government is kind enough to suggest a number of names that you can use but the company owner must consent to the use of these names. The business name serves as the company’s brand.

In addition to the business name, the Article and Memorandum of Association are also a requirement. This serves as an indicator of the business that the company has been registered. It shows the operations of a company as well as the management procedures. Depending on the size and type of company, other documents might be required. These include the minutes of the meetings held to discuss setting up a company in Cyprus. The letter given to the director at the time of appointment is also important. This is because most of the times the people who cause business downfalls are the directors as they are the decision makers.

The law in Cyprus requires every company to have a secretary. Their definition of secretary is an individual who spends time in the company premises at all working times. Such a person is required to maintain a record of the company transactions that occur daily. To ascertain all these requirements, the process of incorporating a company could take a week or more depending on the documents of the company that need vetting and the level of investment that a company plans to set up.

Before a company is incorporated, it must have achieved all the stipulated requirements. These include tax certificates and licenses. A huge percentage of the GDP in Cyprus accrues from the payment of licenses and tax. Due to this reason, every company in the country has to register at the income tax department so that they can be remitting tax on the incomes. The taxation rate is uniform for all companies. A trading license is issued for all the companies. With all these requirements, a company receives an official certificate that shows that it is incorporated and it can begin operations.

Another requirement for the incorporation of a company in Cyprus is the articles and memorandum of association. These documents give a clear outline of the objectives of a company, the management structure and how the business plans to conduct its activities. It outlines the duties of every shareholder in the company and ensures that there is a system followed in the company operations. For a company to be incorporated in Cyprus there must be a bank reference. This reference serves as security and assures the government that the company has a capacity of transacting in the range that they have stated in the articles of association.

Cyprus has set a standard share capital that all the companies should have before incorporation. The share capital stands at 10,000 shares that are issued at a minimum price of one Euro. The number of shareholders is not important but there must be at least one shareholder. This makes sure that there is a beneficiary of the company. Cyprus allows the incorporation of companies through agents. This is mainly for the foreign countries where they allow the investor company to register as a company but under the name of another company that already exists in Cyprus. These services are mainly offered for the people who prefer anonymity.

An important document that is required in the incorporation of a company in Cyprus is an affidavit that is issued after paying a certain amount in a court of law. This shows that the company’s owners are ready to work under the regulations of the state and that they will comply with all the company requirements. For foreign investors, Cyprus restricts the operation of financial, insurance and banking services in the country. This is done in protection of the country’s interests. Unlike other countries, it is not a requirement that a company should get a seal in Cyprus. However, some business titles must be consented to before they are registered. These are mainly related to the financial sector and other critical industries like healthcare and teaching.

Before incorporation, a company must register with the income tax department, which ensures that it remits its tax on income after every financial period.

In certain countries around the globe, there are taxes that are imposed on a persons net worth. This means that the greater an individual’s or company’s net worth, the higher the taxation. In certain cases, this usually leads to tax fraud as the individual or company may see this as an extreme form of taxation. In other cases, the individuals simply omit certain aspects of their wealth that is deemed taxable in order to avoid paying taxes. In Cyprus, this is eliminated because the taxation on ones net worth is non-existent in this country. This is definitely a huge incentive to both individuals as well as organizations, be they local or international. It should be noted, however, that this tax exemption only applies to real estate in Cyprus.

In Cyprus, the European rules on taxation apply. This is beneficial to the individual or company because one can take advantage of this double tax treaty available in Cyprus to reduce their payable taxes. Tax losses incurred by the company are also carried forward indefinitely and can be surrendered as group relief. This country also charges low duty for the establishment of companies within its jurisdiction. Interest deduction for borrowing costs is provided for all off shore companies. Unilateral tax relief is granted to all the companies within Cyprus. This is for all the foreign tax the company may have incurred while establishing itself in this country.

This is provided irrespective of the absence of the double tax treaty. There is also a very low expense fee for financial and professional service provision in this country compared to the charges in the European Union member countries. This applies for any charges from lawyers and or financial institutions that may have been used during this process or for any independent valuations that may have been done on behalf of the organization in Cyprus. This country also provides low personal tax rates that act as an added incentive for the individual opening any sort of company.

This taxation reaches a maximum of thirty percent (30%) for income over 20,000 Cypriot Euros. There are also low social insurance contributions that the individual is bound by law to pay to the government at regular intervals, as is the case in every other country in the world. This type of insurance is usually calculated at 6.3% of the individuals’ gross salary. All these tax incentives are both local and international and they allow for businesses in Cyprus to operate under a very conducive environment that is almost unrivalled in the European Union and indeed anywhere else in the world.

There are a lot of reasons why international business companies are focusing toward Cyprus Island. The main reason is because of the land available in low cost and the cost of taxation is very in the Cyprus. The rules and regulations framed by the Cyprus government favor many companies for their profits. This has increased several organizations branches to be established in Cyprus. Private companies in Cyprus are limited by guarantees offered and available limits of shares of that company. Tax regime which seemed to be favorable for many companies because of which those companies are focusing to establish one of their firm in Cyprus.

Apart from the benefits of Government of Cyprus, there are some more benefits provided by the geographic location of Cyprus. Cyprus has built two international ports and international air ports suiting trade and import and export facilities. Also there are several banks providing them financial support as well. Cyprus has both offshore and onshore banks.

What should be done in order to establish an international business company in Cyprus?
First, after deciding to establish a company in Cyprus, fill up an application form available in Cyprus quoting your need to start your firm there. All the details of your company, product, and type of manufacture should be clearly known.

The owner’s identity proof needs to be mailed to the corresponding government office in Cyprus. It can either be scanned and mailed or just sent using fax machine.

You must frame the name of your organization. You will be asked give any three names in order of priority from which any one will be selected based on the availability.

For getting approval it will take about a week or few days. After this a memorandum needs to be prepared for the company and should be there while registration process.

The activities which the company is going to perform in Cyprus should be available. Activities include all the type of process, products produced, services offered to people, their import and export details, etc.
The company should have shares as mandatory while registering and a local director for governing the company as they are made necessary by the Law of Cyprus.

Among the three continents lies the company lays Cyprus, which is the birth of many new companies. The land and its resources gives it the maximum advantage to be the leading business networks every to be formed. They give all the companies a chance to set foot and also prove themselves in their area experience. The advantage for the companies is the double tax agreement made by Cyprus government. The rules say Cyprus does not ask for shares or hidden costs. The finishing time of a company providing necessary documents takes around 10 -15 days.

Cyprus is one of the best places for investment in offshore and has many tax reduction choices for the companies, and many other facilities. The wide range of options is given to the companies who are ready to set foot at Cyprus city. The law enforcement is strict so as to avoid misuse and problems other than that it is very flexible towards its investors. Apart from the advantage of tax reduction, Cyprus also has several other geographical advantages that suits best for setting up an international business company in the island of Cyprus. There are two international class ports and two international class air ports are available that enhances the import and export facility with ease. It also has several financial institutions like banks funding the investing company to set up their firm or a branch here in the island of Cyprus.

Rules to be followed during registering:

• For a new company there should be a name and two or three names are suggested and sent for approval.

• But, if the name is already registered, another name has to be given without re-registration.

• A detailed description about the company and activities are to be given which should be typed in Greek and English.

• The share holder is suppose to revel themselves with their passport and photographs. It is also important for the share holders to give details about which company they hold.

• The company should have a registered office address to send the documents and have their private area under their control.

• The company should hold a reference no. that can be useful for transaction, and other purposes.

Documents to be submitted:

• Articles and memorandum of the association is prepared in the language of Greek and English.

• Incorporation, shareholders, director and registered office certificate are provided.

• The shareholder’s declaration of the trust is a must.

• Signed share transfer documents and signed resignation letters which are undated is provided to the owner.

In order to have a firm in the island of Cyprus, the concerned Company should be registered to the Government of Cyprus. There are lots of companies, which helps the investing company to register in the government of Cyprus and to become a part of the Cyprus Company Formation. Each company offers different options for registration and provides better guidance to achieve the requirement. The companies have legal experts and professionals to guide you under the Cyprus Laws and make everything legal.

Let us have short look on the necessary requirements for a company to register in the Cyprus government. There are some basic steps to be done during registration and all the information provided by the registering company should be authorized by the native country.

Proposed Name of the company:
The Company should propose two or three names to the Registrar of the Companies for the authorization. There should not be any company previously with the proposed name and also the proposed name should come under the Cyprus Company Formation.

Objects and Activities of the company:
A detailed description of the activities carried out by the company in the country, in which the business will be carried out, should be submitted during the time of registration. Based on the activities of the company, the transaction details notes and articles of Corporation are prepared.

Standard Share Capital of the company:
The Companies should submit the information about the shares and the capital of the company. There are no strict requirements for the number of shares, but it is recommended to have 10,000 shares during registration process.

Reference number:
Reference Number is very important to register a company in the Cyprus Island, since it is mandatory as per the Laws of Cyprus.

Company Directors and Secretary:
For the sake of taxation, it is recommended to have local directors for the incoming International Business Companies. Also the company should accomplish the names of Secretaries, since it is one of the basic requirements for registration of the Company.

Registered Office Address:
The company should have a registered Office Address while registration process. This will be handled by the private agencies, since they provide their address for the registration.

About share holders:
The Company should deliver the information about the share holders and there is an option to register as anonymity with the Trustees.

Cyprus Location:

Cyprus has paved the pathway for many successful companies in the recent past. It has been a resource for these companies to be well established all over the globe. The geographic location of Cyprus also helps a company to be a developed one. It is located across the three major continents of Europe, Asia and Africa. The population is about 770, 000, in which 78% represents Greek-Cypriots, 18% Turkish-Cypriots and the remaining 4% represents the minorities.

Mode of communication:

The official languages in Cyprus are English, Greek and Turkish. The English language is most widely used and very essential in business sector.

History:

The Cyprus has become independent since 1960 and the government system is similar to the western countries democracies in which human rights, private property and political freedom are safe guarded. Presidential system of government is followed in Cyprus. His duration is of five year term and considered as the Head of the State. In 1st May 2004 it became full member of the Europe Union.

Infrastructure and Economy:

There are excellent communications in Port and Air connections. There are two airports in Larnaca and Paphos. Limasso and Larnaca are the major port facilities. Cyprus has excellent banking facilities with many onshore banks and offshore banking units. These Onshore and Offshore banks maintains International networks.

Companies:

Companies can be resident, that is control and management in Cyprus and can be non-resident if its control and management outside of Cyprus. Any company can be registered in Cyprus and the procedure is standard for all.

Agency:

Many agencies are available to do the registration of a company in Cyprus. They help the company to be assured and registered legally in Cyprus.

Registrar of Companies:

The proposal of the clients whose companies has to be established in Cyprus can be sent to Registrar Of Companies or it can be sent to the agencies and they will sent to Registrar Of Companies and will get it registered.

Procedure:

The application or the questionnaire should be filled and submitted to the agency.
The photocopy of Shareholder’s passports along with each individual’s reference for each shareholder by the bank, that is, the bank assurance letter along with it should be produced. These specified documents should be sent to the agency by courier or should be mailed.
The proposed company’s name is sent by the agency to Company registrar for approval. Usually it takes about 2 to 4 days. But this duration can be reduced by choosing the company’s name from the list.

When the company’s name is approved, then the articles and the memorandum are prepared for it and sent again to the registration.

The Other Requirements:

A short description about the company’s activities is required, for preparing the articles and memorandum of the company.

There should be at least one shareholder and one director foreign or local should be appointed.
The registered office address should be specified and a secretary is needed.
The registration of a company ends within 8 days and this can be reduced to 5 days if we select an approved company’s name.

How to Register Cyprus Company?

An IBC can be resident or non resident of Cyprus, that is it can has control and management in Cyprus or outside respectively. According to the respective wishes an IBC can work from a well settled office with much number of staffs or it may have the registered office in local.

The application procedure is as follows:

• The registration can be done with an aid of an agency.

• The questionnaire or the application form should be filled and sent to the agency by fax or email to the agency.

• Various documents are received as proves they are, photo copy of the shareholder’s passports by fax and also bank reference for each individual share holder. From their appropriate banks the bank reference letters should be enclosed along with proposer’s questionnaire.

• The passport original copy and the reference letter from the bank should be couriered to the agency.

• Then from the agency the Proposed Company’s name will be sent to Company registrar for approval. The duration for this step will be about 2 to 4 days. If this approval should be done earlier then the company will provide approved names of the company in a list from where it can be selected.

• When the company name is approved by Company registrar, the articles and the memorandum of the company are prepared and this is submitted to Company registrar for registration.

The Important Points Are

• Certain brief information about the activities taking place in the company for preparing memorandum and articles of the company should be known.

• Minimum of one shareholder is required. The shares can be held by a nominee or trustee, if anonymity is required. A Director who may be foreign or local is required.

• A secretary should be appointed for the company and the address of the registered office in Cyprus should be specified.

• The registration procedure can be completed within the duration of 8 working days and if a company name is approved then it takes only 5 days for the procedure completion.

How to Register a Company?

• It can be registered through agencies which are now available in large number.

• The proposal is sent by the agency to Registrar Of Companies.

• First, the application should be filled and submitted to the agency.

• The required documents mentioned should be disclosed along with is, that is photocopy of shareholder’s passports along with the bank reference letter.

• The proposed company names are submitted to the Company registrar which takes two to four days.

• If an approved name is selected then the duration can be reduced for registering.

• As soon as the company name is approved the articles and memorandum for the company is prepared.

Important Points:

• A brief description about the activities taking place in the company should be provided to prepare articles and memorandum.

• At least one shareholder is required.

• At least one director is required for the company who may be foreign or local.

• A registered office address in Cyprus must be specified as well as a secretary is needed for each company.

Administration:

Records should be maintained by each company in Cyprus and also the yearly audited statements should be submitted to Company registrar and Inland Revenue.

Following documents are produced following the registry of the company:

• Articles and memorandum of the association is prepared in the language of Greek or it can be translated into English also.

• Incorporation, shareholders, director and registered office certificate are provided.

• Signed share transfer documents and signed resignation letters which are undated is provided to the nominee.

• The shareholder’s declaration of the trust is a must.

• The Deed of Indemnity is also provided in this. The owners indemnify the nominee for their actions.

Bank Accounts:

The bank accounts can be opened for the company by submitting the photocopy of above documents, with the owner’s passport copy, with the bank reference letters and also the bank account for the company can be opened in any part of the world.

Thus it provides a great efficiency in opening a company in Cyprus.