There are various ways through which it is possible to start a business in Cyprus. One of the fastest ways of launching a company is by purchasing one. There are several ways procedures that can be used, among these the purchase of shares in existing companies or the acquisition of a shelf entity. This last option has several advantages.
Buying a Cyprus shelf company is not complicated, and the procedure can be completed with the support of our company formation specialists.
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Ready-made companies in Cyprus
A shelf company or a ready-made company in Cyprus is a legal business entity that has been incorporated but has not yet performed any trade activities. Essentially, it exists to be purchased by an entrepreneur who wants to start his or her business activity in Cyprus right away. Our company formation specialists in Cyprus are ready to help you purchase a Cypriot shelf company and guide you throughout the entire process until the company is ready to begin performing business activities.
| Legal entities available for
Private and public limited liability companies
Time required for purchasing
|It can take a few days to buy a shelf company
Types of features it includes (corporate bank account, VAT number, etc)
|Trading name, bank account, statutory documents, company director, tax identification number, VAT number possibly|
|The advantages of a shelf company||Simple and easy to buy, already registered entity, possibility to use it for various purposes|
|Appointing new directors (yes/no)||YES, after buying shelf companies in Cyprus, it is possible to replace the directors|
|Capital increase allowed (yes/no)||
YES, it is possible to change the share capital of a Cypriot shelf company
|Certificate of no commercial activities (yes/no)||
|Participants in the purchase procedure||Buyer or a local representative and the seller|
|The cost of buying a shelf company||The price depends on the age of the company, legal structure, and share capital and can be more expensive than setting up a new company in Cyprus|
|Documents necessary for
|Sale-purchase agreement, ID/passport of the buyer|
|Taxes applied to a shelf company||Corporate tax (12.5 %), VAT (19% standard rate)|
|Changing the registered address (yes/no)||YES, it is possibile to change the legal address|
|Aged shelf company available (yes/no)||YES, it is possible to buy aged
shelf companies in Cyprus
|The institution where corporate changes are registered||Cypriot Companies Register|
Legal entities that can be sold as Cypriot shelf companies
A foreign investor who comes to Cyprus to buy a shelf company can choose the type of legal entity he or she wants to acquire. The most popular is the private limited liability company, however, it is also possible to purchase public companies at higher prices.
The private company comes with various advantages, among which:
- they can be used for multiple purposes and are easier to find with different providers;
- they have lower price ranges that depend on the age of the entity;
- they come with all the documents a new company has, including the Articles of Association;
- they can be subject to more amendments that are easy to complete with the Trade Register.
An advantage of buying a ready-made business in Cyprus is the simplified procedure that can be completed in a matter of days.
If you intend to acquire a shelf company and need support in verifying the service provider, we invite you to get in touch with our Cyprus company formation experts for evaluation.
We are also at your service if you are inclined to registering a new entity in order to make sure your company meets all your expectations.
Multiple uses of shelf companies in Cyprus
A Cypriot shelf company can be used for a number of activities, including starting a firm in a certain industry, but it can also be used for:
- incorporating a company’s history from another country and conduct business in Cyprus;
- applying for loans from local banks (certain banks check a company’s activities, and a good track record is helpful for such a company);
- forming partnerships with the Cypriot authorities in accordance with the rules governing public-private partnerships;
- forming joint ventures with other Cyprus-based businesses;
- creating as a subsidiary company.
Our company formation specialists in Cyprus are at the service of foreign investors who want to acquire off-the-shelf enterprises.
Documents you will receive with an aged company
Those who wish to purchase a Cypriot ready-made business should request that it includes the following:
- a registered address with the Trade Register in Cyprus;
- a value added tax number and a tax number;
- a valid certificate of incorporation.
The memorandum and articles of association just need to be modified. The sale-purchase agreement will be the sole document the buyer must sign.
In Cyprus, any natural person or another firm may purchase a shelf company. When purchasing an off-the-shelf firm, the buyer must produce identifying documents such as a passport or identity card, or a certificate of registration if the company wants to purchase a ready-made legal organization. All the legal paperwork must be signed at a notary office by the buyer and seller for the transaction to be completed. The new company owner and other shareholders will be able to change the company name and other information in the Articles of Association after the selling process is complete.
Feel free to address our Cypriot business registration advisors on the entire procedure and how soon it can be completed.
Making changes in a Cypriot shelf company
A shelf company can be subject to a wide range of modifications. Foreign investors who want to purchase an existing company rather than forming a new Cypriot company must know that they have the option to change the company’s trade name, name its directors, and even its legal address. The company’s articles of association must be updated, and the shareholder’s name must be changed as a necessity. Also, all modifications must be submitted with the Companies House.
Apart from the mandatory changes, the share capital of the company may also be altered by the new owner. In most cases, an increase in share capital is required before the business can be used for the entrepreneur’s purposes. In some circumstances, a business license must also be obtained.
We can assist businesspersons interested in acquiring and making the necessary changes in a shelf company as soon as possible in order to comply with local regulations.
Tax aspects to consider when buying a shelf company
Any investor who purchases an aged company can take advantage of the double taxation agreements signed by Cyprus (approx. 65 treaties), as well as the tax regime established in the country for dividends and capital gains. Foreign investors should appoint an accounting specialist to manage all financial elements of the new company, and our accountants in Cyprus are at one’s service for this purpose.
We remind investors that, with regard to the taxation of businesses in Cyprus, the corporate tax rate is 12.5%, one of the lowest in Europe and the European Union.
It is worth knowing that those who purchase shelf companies can also take advantage of the tax breaks provided by the government.
New company and shelf company in Cyprus
From a legal point of view, there are no differences between a Cyprus shelf company and a new enterprise, as their registration follows and respects the Company Law’s requirements. However, what will favor a ready-made enterprise is:
- – the fact that it is already incorporated, thus enabling the owner to save time with the authorities in charge;
- – that it has a tax identification number and even a bank account;
- – that it meets all the management requirements imposed under the law;
- – that in certain cases it can also have a VAT number (however, such entities are more expensive);
- – that it can be registered for several years, thus have a history which can be helpful in certain situations.
On the other hand, registering a new company implies dealing with the Trade Register and various service providers, such as public notaries to prepare the Memorandum and Articles of Association. This can lead to delays in the incorporation procedure. However, the overall cost of starting a new business in Cyprus is lower than buying a shelf company.
Foreign investors interested in what it implies to purchase a Cyprus shelf company can obtain all the relevant information from our local representatives. We are also at the service of those who want to open register legal entities from scratch.
How can the history of a Cyprus shelf company help its owner?
The main reason to acquire a ready-made company is usually age. Ready-made companies can be incorporated for a few months and up to a few years, which can be very helpful in several situations:
- when seeking to obtain loans from Cypriot banks;
- when seeking to enter partnerships with private or public enterprises in Cyprus;
- when seeking to incorporate the history of a foreign business into the Cypriot one.
In the first case, foreign investors who open companies in Cyprus can require financial assistance from local banks. However, these have strict requirements, among which proving financial stability over the years. This can be obtained with the help of a shelf company that has no debts and has a positive track record.
Franchise businesses have started to become popular in Cyprus and in this case, a Cypriot franchisor can request the foreign business to demonstrate market stability and trustworthiness in order to implement its model, which is where ready-made company can help.
Moving a foreign business to Cyprus can be done with the help of a shelf company in which the history of the overseas enterprise can be incorporated.
The advantages of shelf companies presented by our Cypriot company formation experts
Ready-made companies have one important advantage: the company is already incorporated and registered at the Cypriot Trade Register and it can begin its activities right away, after completing the necessary documentation between the new owner and our company formation experts.
Cypriot shelf companies are a quick and easy solution for entrepreneurs in Cyprus. Moreover, most Cypriot shelf companies have all thenecessary documentation and accounting records in good order and most importantly, there are no liabilities deriving from business activities.
Although the company is inactive, a shelf company that has been registered and has accumulated longevity will have a better reputation and will generally be perceived as secure.
Doing business in Cyprus
Shelf companies are not the only option for business owners who want to open a Cypriot company. Other types of companies that can be registered here include the limited liability company, the private company limited by shares, the public company limited by shares, branches or subsidiaries in Cyprus set up by foreign companies.
The business start-up costs in Cyprus vary according to the type of company. For shelf companies, our experts can provide a personalized offer which will include the costs for acquiring the new shelf company and other additional costs that may exist depending on various maintenance costs for the company.
The most profitable business sectors in Cyprus
Despite the Covid-19 pandemic, Cyprus has had a good economic growth in 2020 compared to other European states. Among the industries that have remained stable during these hard times, news indicate that:
- the services industry was the most important sector with a gross value added of 83.7%;
- construction has also maintained a steady pace contributing with 6.3% to the country’s economy;
- agriculture, forestry and fishing have also contributed with 2.1% to Cyprus’ Gross Domestic Product.
Please contact our team of agents for company formation services in Cyprus. We can help you invest in the small but beautiful Mediterranean country. Whether you want to buy a ready made company or to open an offshore company in Cyprus, our team is at your disposal.