To set up a company in Cyprus you reserve a name with the Department of Registrar of Companies and Intellectual Property, have a Cyprus lawyer file the incorporation forms, and pay a €165 registration fee. Foreigners can own and direct the company. Since 1 January 2026 Cyprus taxes company profits at 15%, up from 12.5%, and dividends paid to non-domiciled residents remain free of the Special Defence Contribution.
Last checked: October 2026
In short:
- The Registrar charges €10 per proposed name and €165 to register a company with share capital, and there is no statutory minimum share capital for a private company.
- Cyprus’s 2026 tax reform raised corporate tax to 15%, abolished deemed dividend distribution for profits from 2026, and cut the Special Defence Contribution on dividends to 5% for domiciled residents.
- The company is taxed in Cyprus only if it really is run from Cyprus, and banks apply strict rules to companies with no physical presence.
The 2026 tax reform in one table
Cyprus passed a broad tax reform that was published in the Government Gazette on 31 December 2025 and took effect on 1 January 2026 (Trident Trust, Andersen). If you read a formation guide that quotes 12.5%, it is out of date.
| Item | Before 2026 | From 1 January 2026 |
|---|---|---|
| Corporate income tax | 12.5% | 15% |
| Deemed dividend distribution | Applied | Abolished for profits earned from 2026; earlier profits stay under the old rules |
| SDC on dividends, domiciled residents | 17% | 5% on profits from 2026 |
| SDC on dividends, non-domiciled residents | Exempt | Still exempt |
| Stamp duty | Applied, including on documents | Stamp Duty Law repealed |
| Tax losses carried forward | 5 years | 7 years |
| Personal tax-free band | €19,500 | €22,000 (35% top rate above €72,000) |
| IP box effective rate | about 2.5% | about 3% |
Sources: Andersen Cyprus, AGP Law, Sovereign Group, Trident Trust, PwC. Sovereign Group adds that SDC on dividends from pre-2026 profits stays at 17% if received by 31 December 2031.
How registration works
The Registrar’s guidance on companies.gov.cy runs from name approval through filing the application to the certificate of incorporation, followed by post-incorporation duties such as registering beneficial owners.
1. Name approval. You apply to the Registrar online or on paper. The fee is €10 per proposed name, plus €20 per name for the accelerated procedure.
2. Documents. The incorporation package includes:
- Form HE1, a statutory declaration signed and sworn before the court by the entrusted lawyer. In practice this means you must use a Cyprus lawyer.
- Form HE2, the registered office address in Cyprus.
- Form HE3, the first directors and secretary.
- The memorandum and articles of association, signed, in Greek (with a certified translation if you also have them in another language).
3. Filing and fees. You can file through the Registrar’s e-filing system or by hand. Official fees:
| Item | Fee |
|---|---|
| Name approval, per proposed name | €10 |
| Accelerated name approval, per name | +€20 |
| Registration, company with share capital | €165 |
| Registration, company without share capital | €235 |
| Accelerated registration | +€100 |
| Creating a file of translations | €160 |
The Registrar’s page does not give processing times. Law firm Demetriades says the whole process takes about 8 to 10 days. Treat that as a guide, not a promise.
Structure: capital, directors and secretary
Demetriades & Co sets out the basic requirements:
- Share capital: no minimum for a private limited company. €1,000 is a common choice.
- Shareholders: at least one, individual or company. Non-residents can be shareholders.
- Directors: at least one. Non-residents can be directors.
- Secretary: at least one.
- Registered office: must be in Cyprus.
- Audit: every company must prepare financial statements audited by a licensed auditor each year.
One cost has disappeared. Cyprus companies used to pay an annual levy of €350. Harneys says it was abolished from 1 January 2024, though levies for 2023 and earlier are still payable. Some provider sites still list it.
We have not found an official source for typical professional costs (lawyer, registered office, secretary, accounting, audit). These will be far higher than the €175 or so of government fees. Get quotes, and ask for the audit fee in writing.
Tax residence: management and control
This is where most founder plans fail. PwC says a company is tax resident in Cyprus if it is managed and controlled in Cyprus. Since 2026, a Cyprus-incorporated company is also resident by default unless a double tax treaty says otherwise.
That second rule does not settle the question. If you, the sole director, take every decision from a flat in Lisbon or London, that country may claim the company is resident there under its own rules. A treaty tie-breaker then usually looks at where the company is effectively managed. To keep residence in Cyprus, hold board meetings in Cyprus, make strategic decisions there, and consider local directors with real authority. The cleanest version is that you live in Cyprus.
For the company tax itself, PwC says profits from disposals of shares and other “titles” are exempt from corporate tax. Dividends received from other Cyprus companies are generally exempt too.
The IP box
Cyprus has an IP box aligned with the OECD “modified nexus” approach (PwC). Accountancy firm CYAUSE says it exempts 80% of qualifying IP profit. With the 15% rate, the effective rate is about 3% (20% of 15%), up from about 2.5% before 2026.
CYAUSE says qualifying assets include patents and software, including SaaS platforms and apps. Trademarks do not qualify. Development costs paid to related parties may not count under the nexus rules. If you plan to rely on the IP box, you need clean records of R&D spending from the start. The 120% super-deduction for R&D spending on intangible assets has been extended to 2030 (Andersen).
Personal tax: non-dom and the 60-day rule
For founders, the company is only half the plan. The main attraction of Cyprus is how dividends are taxed in the hands of a Cyprus-resident, non-domiciled individual.
Dividends. PwC says dividends received by individuals are exempt from personal income tax but may be subject to the Special Defence Contribution (SDC). SDC only applies to people who are both Cyprus tax resident and Cyprus domiciled. A non-dom resident pays no SDC on dividends. Separate General Healthcare System (GHS) contributions may still apply; confirm the current rate with an adviser.
Who counts as non-dom. Andersen explains that someone without a Cyprus domicile of origin is deemed domiciled once they have been tax resident for 17 of the last 20 years. Until then they are outside SDC.
After 17 years. The 2026 reform added an alternative regime. Deemed-domiciled individuals without a Cyprus domicile of origin can pay a lump sum of €250,000 per five-year period to stay exempt from SDC, for up to two further five-year periods. KPMG says the election is irrevocable and the payment is non-refundable. It is based on Tax Department Circular 2/2026.
Becoming resident. You become Cyprus tax resident by spending more than 183 days there in a calendar year. The alternative 60-day rule (PwC) requires that you:
- spend at least 60 days in Cyprus in the year;
- do not live in any other single country for more than 183 days in total;
- run a business in Cyprus, work for a Cyprus employer, or hold a director post in a Cyprus-resident company; and
- own or rent a permanent home in Cyprus.
The 2026 reform removed the old condition that you must not be tax resident anywhere else (PwC, Trident Trust). That makes the rule easier to meet, but other countries may still treat you as resident under their own rules. Our guide to the 183-day myth explains why.
VAT
Cyprus’s standard VAT rate is 19%, with reduced rates of 9%, 5% and 3% (PwC). Registration is compulsory if taxable turnover exceeded €15,600 in the previous 12 months, or is expected to exceed it within the next 30 days. You can register voluntarily below that.
Banking: substance first
Cyprus banks are cautious with companies that look like shells. In 2018 the Central Bank of Cyprus issued guidance defining a shell company as one with no physical presence other than a mailing address, no real economic activity, or no tax residence. PKF wrote that banks should avoid starting or renewing relationships with such companies unless there is a documented legitimate purpose. It also said banks had already begun closing accounts that did not fit.
That guidance is several years old, but the logic has not changed. To open an account, expect to show:
- a real business plan and expected transaction flows;
- source-of-funds and source-of-wealth evidence;
- a Cyprus address that is more than a mailbox, and ideally local people.
If you need to trade before a Cyprus bank account opens, an EU payment institution account can bridge the gap. Our guide to why banks close nomads’ accounts covers what triggers reviews.
Who Cyprus suits
- Founders who will move to Cyprus and use non-dom status. A profitable company paying 15% and distributing dividends free of SDC is a straightforward EU setup.
- Software and IP businesses that can meet the nexus rules and use the roughly 3% IP box.
- Groups that want an EU holding company with exempt gains on share disposals.
It suits less well: a founder who lives elsewhere and only wants a low-tax EU shell. Management and control, bank compliance and your home country’s rules all push against that. If that is you, compare other options in our guide to where to incorporate, and read our note on how Cyprus is tightening its golden visa rules if residence by investment is part of your plan.
Related guides: Tax residency explained: why the 183-day rule is a myth for most countries · Cyprus to tighten its golden visa and review 12,000 permits · Where to incorporate as a digital nomad: US LLC, UK, Estonia, UAE · Holding company for founders (2026): how it works and where to set one up · Tax-free countries (2026): no income tax countries you can actually live in
Quick answers
Q: What is the corporate tax rate in Cyprus in 2026?
It is 15% for tax years from 1 January 2026, up from 12.5%. The reform also abolished deemed dividend distribution for profits earned from 2026 and repealed stamp duty. Qualifying profits under the IP box are 80% exempt, which gives an effective rate of about 3%.
Q: Can a foreigner open a company in Cyprus?
Yes. Non-residents can be shareholders and directors, and a private company needs only one of each, plus a secretary and a registered office in Cyprus. A Cyprus lawyer must sign the statutory declaration. Government fees are €10 per proposed name and €165 for registration, but professional fees are extra.
Q: Do non-doms pay tax on dividends from a Cyprus company?
Dividends are exempt from Cyprus personal income tax. The Special Defence Contribution applies only to people who are both tax resident and domiciled in Cyprus, so non-doms are exempt. You are deemed domiciled after 17 of 20 years. You can then pay €250,000 per five years to stay exempt.
Sources
- Cyprus Registrar of Companies: applying to incorporate a company
- Cyprus Registrar of Companies: company incorporation forms and fees
- Cyprus Registrar of Companies: form for name approval
- Demetriades & Co: register a company in Cyprus
- Harneys: Cyprus abolishes annual company levy
- Andersen Cyprus: tax reform, comprehensive update effective from 1 January 2026
- Andersen Cyprus: Cyprus introduces an alternative SDC regime
- Trident Trust: summary of Cyprus’s 2026 tax reforms
- AGP Law: Cyprus tax reform 2026, a comprehensive legal analysis
- Sovereign Group: Cyprus brings comprehensive tax reform into force
- KPMG: GMS Flash Alert 2026-159, Cyprus non-dom regime extension
- Mondaq (CYAUSE): Cyprus IP box regime FAQ
- PwC Worldwide Tax Summaries: Cyprus, taxes on corporate income
- PwC Worldwide Tax Summaries: Cyprus, corporate residence
- PwC Worldwide Tax Summaries: Cyprus, corporate income determination
- PwC Worldwide Tax Summaries: Cyprus, other taxes
- PwC Worldwide Tax Summaries: Cyprus, individual residence
- PwC Worldwide Tax Summaries: Cyprus, individual income determination
- Mondaq (PKF): treatment of shell companies by Cyprus banks
This is general information from the Nomad Forums team, not legal, tax or financial advice. Rules change; check the official source or a qualified adviser before acting.
Over to you: If you have formed a Cyprus company since the 2026 reform, which bank opened your account and what did they ask for? And if you use the 60-day rule, how have other countries treated your residence?