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Local business incentives - Legal forms of companies - Registration and licensing procedures - Legal framework - Foreign exchange control - Regulations concerning equity investment - FDI inflows - Expertise of the political risk

Local business incentives

Cyprus authorities are strongly encouraging foreign investments coming into the country. The Central Bank of Cyprus is the controlling and supervising organisation for all foreign investments made in Cyprus. It also administers the creation of international or "offshore" companies called International Business Companies (IBCs).
The government has deeply favoured offshore investments in Cyprus. An international company is a Cypriot company with foreign capital, carrying out its activities exclusively outside Cyprus. Nearly 14,000 such offshore companies exist in Cyprus out of which 1,100 are physically present in the country. Offshore companies get lot of financial advantages from the Cypriot government. For example, their taxation rate is very low (4.25%).
The offshore sector, which largely contributes to the development of the island, will disappear in the year 2006 because of the integration of Cyprus as a member of the European Union.


Legal forms of companies

Form Number of partners/shareholders Minimum and/or maximum capital Liability Registration fee Release of financial documents
Private Limited Company Minimum 1 shareholder and Maximum 50 shareholders No minimum capital The responsibility of the associate member is limited to the amount contributed to the total capital. Minimum 125 CYP n.c.
General Partnership Minimum 2 and maximum 20 associate members. No minimum capital Each associate member is personally and indefinitely responsible for the debts and obligations of the company Around 750 CYP n.c.
Limited Partnership Minimum 2 and maximum 20 associate members. No minimum capital At least one of the associate members is personally and indefinitely responsible for the debts and obligations of the company, the other members' responsibility being limited in nature Around 750 CYP n.c.

Registration and licensing procedures
the Central Bank of Cyprus grants permissions to take participation in Cypriot companies, for foreign companies. The central bank, in collaboration with the government of Cyprus, co-ordinates the procedures of foreign investments in the country. A foreign company wishing to establish itself in Cyprus or to take participation into a Cypriot company needs to go through a law consultancy or fiscal firm based in Cyprus. The consultancy firm will pass on the request to the Central Bank, which grants a permit within one month. After receiving the permit, the foreign company needs to go to the Department of the Registrar of Companies to finilize the procedure.

Foreign exchange control
There is no exchange control on non-residents.

Regulations concerning equity investment
Foreign investors based in the European Union can acquire stakes in a Cypriot companies, without any limit on the percentage of stake acquired or on minimum capital invested. Moreover, investors from the European Union can acquire up to 100% in the capital of companies listed on Cyprus Stock market except for the banking sector where such a percentage is limited to 50% only.  

Foreign Direct Investment inflows in Cyprus

FDI inflows 2003 2004 2005 World rank (*)
FDI inflows (USD million) 891 1 079 1 166 23/141
Source : UNCTAD - World Investment Report
Note : (*) World Rank = UNCTAD Inward FDI Performance Index. It is a measure of the extend to which a host country receives inward FDI relative to its economic size. It is calculated as a ratio of the country's share in global FDI inflows to its share in global GDP.


Last modified in 2006 - ongoing update
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