Cyprus has a very attractive tax regime and the taxation rates are considered low by international standards. This is one reason why foreign investors choose to open branches or subsidiaries in Cyprus in order to establish the presence of their international companies.
Cyprus has signed double tax treaties with more than 40 other countries, making it an ideal location not only for branches and subsidiaries but also for other types of companies like holding companies.
Investors who are interested in starting a company in Cyprus will often seek the services of a Cypriot company formation agency to help throughout the company registration process.
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Open a branch in Cyprus
The most important aspect about a Cypriot branch is that it is not a separate legal entity. The parent company abroad that wishes to establish a branch in Cyprus will have to bare full responsibility for its debts and obligations. The branch needs to be registered at the Cypriot Registrar of Companies before it can commence any business activities. The branch must have the same name as the foreign parent company.
The application to register a branch in Cyprus must be accompanied by relevant documentation about the parent company. If you need help with the company registration procedure in Cyprus, our experts can assist you and help you submit the relevant documents.
Open a subsidiary – a process explained by our experts in company formation in Cyprus
Unlike the branch, the Cypriot subsidiary is a separate legal entity and has limited liability. Is is incorporated as a Cypriot company and can take the form of a public or private limited liability company. The attractive taxation regime in Cyprus and the numerous double tax treaties encourage foreign investors to open new companies in the country.
The advantage of the subsidiary is that it is not dependent on the parent company, however, the incorporation procedure has more steps than in the case of the branch. A company in Cyprus must also be registered for VAT and, according to the type of company, a minimum share capital will be required.
Corporate taxes rates for branches and subsidiaries in Cyprus are the same, but there are other differences in the calculation of the taxable base, for example, transfer pricing rules may apply in different ways for branches and for subsidiaries.
If you want to know more about company registration process or want to open a branch or a subsidiary, please contact our Cypriot company formation experts.