Maksym Stepanenko
Managing Partner, Crystal Tax
International client projects since 2012: company structures, tax, immigration, DUNS and NCAGE. 50+ jurisdictions.
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A Cyprus company in 2026 is usually a private Ltd. From 1 January 2026 Cyprus corporate tax is 15% (12.5% until the end of 2025), standard VAT is 19%, and VAT registration is compulsory once supplies exceed €15,600 in 12 months. Forming a company gives no residence permit.
Tax review before incorporation · Ltd, branch or holding · Cyprus and home-country tax in one calculation
In brief
- Corporate income tax is 15% from 2026; losses carry forward for 7 years.
- VAT: 19%, with reduced rates of 9%, 5% and 3%. Registration threshold €15,600; for acquisitions from the EU €10,251.61 a year.
- Dividends to non-residents: no Cyprus special defence contribution (SDC), except for recipients in low-tax (5%) or EU non-cooperative (17%) jurisdictions.
- Ukrainian owners: under the treaty as amended by the 2015 Protocol, dividends 5% or 10%, interest 5%, royalties 5% or 10%.
- Filings: audit, or a review for small companies; annual return; tax return; beneficial owners register within 90 days of incorporation.
- Citizenship by investment is closed: only applications filed before 30.10.2020 were considered.
What changed for Cyprus companies in 2024–2026
| Item | Before | Now | Basis |
|---|---|---|---|
| Corporate income tax | 12.5% | 15% from 1 January 2026 | ITL s.4(2) |
| SDC on dividends to domiciled residents | 17% | 5%; 17% still applies to dividends paid out of profits up to 2025 and distributed within 6 years | SDC s.3 |
| Deemed dividend distribution (70%) | every year | only for 2024 and 2025 profits | SDC s.3Γ |
| Stamp duty | charged | Stamp Duty Laws repealed from 1 January 2026 | Stamp Duty Laws 1963–2025 |
| €350 annual company levy | due by 30 June | repealed from 2024; arrears for 2012–2023 remain payable | Registrar, Law 25(I)/2024 |
| Review in place of audit | turnover up to €200,000 | turnover up to €300,000 and assets up to €500,000 for two consecutive years | Cap.113 s.152 |
Cyprus company taxes in 2026
Corporate income tax
15% of taxable profit from tax year 2026 (ITL s.4(2)). Losses carry forward for 7 years.
Company tax residence
A company is Cyprus resident if it is managed and controlled in Cyprus or incorporated in Cyprus, unless a tax treaty provides otherwise. Where the board meets and decides remains the first question banks and the owner's home tax authority ask.
VAT
19% standard rate; 9%, 5% and 3% for the lists in the schedules of the VAT Law. Registration is compulsory when taxable supplies over 12 months exceed €15,600 or are expected to exceed it in the next 30 days.
Dividends to non-residents
No SDC, unless the recipient company sits in a low-tax jurisdiction (5%) or on the EU list of non-cooperative jurisdictions (17%).
Dividends to domiciled residents
SDC 5% on profits from 2026. Profits up to 2025 distributed within 6 years: 17%. Residents without a Cyprus domicile (non-doms) pay no SDC.
Deemed distribution
The 70% deemed distribution rule survives only for 2024 and 2025 profits.
Payroll
The employer registers with Social Insurance, withholds tax and files the annual IR7 return by 30 April of the following year.
How a Cyprus Ltd is incorporated
The Registrar of Companies runs the procedure. Below are the steps and state fees published by the Registrar. State fees are not the price of our services.
| Step | What is needed | State fee |
|---|---|---|
| 1. Name | Name approval request; a private company name ends in LIMITED or LTD | €10 per name, +€20 expedited; approval valid 6 months |
| 2. Constitution | Memorandum and articles signed in Greek; form HE1, a statutory declaration signed and sworn before the court by the lawyer | — |
| 3. Office, directors, secretary | Form HE2 for the registered office in Cyprus; form HE3 for the first directors and secretary | — |
| 4. Incorporation | Paper filing or the Registrar's e-filing | €165 (company without share capital €235), +€100 expedited |
| 5. Tax number | Registration with the Tax Department within 60 days of incorporation | — |
| 6. Beneficial owners | Entry in the register within 90 days of incorporation; changes within 45 days | — |
Officers: a private company needs at least 1 director, a public company 2. A secretary is mandatory; a sole director may also act as secretary only in a single-member private company. Minimum share capital is set by law only for public companies.
Ltd or branch of a foreign company
| Criterion | Cyprus Ltd (subsidiary) | Branch (overseas company) |
|---|---|---|
| Status | Separate legal entity under Cap.113 | Place of business of a foreign company |
| Registration | Name, Greek-language constitution, HE1–HE3, €165 | Within 1 month of establishing the place of business, forms AE1–AE3, apostilled constitution, €380 |
| Corporate tax | 15% on the worldwide profit of a Cyprus resident | 15% on profit attributable to the permanent establishment |
| Filings | Audit or review, annual return, tax return | Financial statements to the Registrar, audited accounts and tax return to the Tax Department |
| Typical use | Holding, trading, IT, receiving dividends and royalties | Trading under the parent's name in the Cyprus market |
The Cyprus register has no separate "representative office" status: any place of business of a foreign company is registered as an overseas company.
Filings and calendar after incorporation
| Obligation | Deadline | Basis |
|---|---|---|
| Tax registration | 60 days after incorporation | Registrar |
| Beneficial owners register | 90 days after incorporation; annual confirmation 1 October to 31 December | Registrar |
| First annual return | made up to the date 18 months after incorporation, then yearly; file within 28 days; €20 fee, late penalty up to €150 | Registrar |
| Audit or review | Every year; review allowed with turnover up to €300,000 and assets up to €500,000 for two consecutive years, not for groups that must consolidate | Cap.113 s.152 |
| Corporate tax return | With audited accounts, by 31 January of the second year after the tax year; the Council of Ministers may extend | ACTL s.5 |
| Provisional tax | Two instalments: 31 July and 31 December of the current year | ACTL s.38 |
| VAT returns | Payment by the 10th day of the second month after the period ends | Business in Cyprus |
Financial statements follow IFRS. Failing to file annual returns leads to penalties and can end in the company being struck off. Accounting and audit are covered on accounting services in Cyprus and auditing companies in Cyprus, VAT on VAT registration in Cyprus.
Owners in Ukraine: dividends, interest, royalties
The 2012 Ukraine–Cyprus convention is in force; the 2015 Protocol entered into force on 28.11.2019 and applies to withholding tax from 1 January 2020.
| Payment | Treaty rate | Condition |
|---|---|---|
| Dividends | 5% | Beneficial owner is a company holding directly at least 20% of the capital and having invested at least €100,000 |
| Dividends | 10% | All other cases |
| Interest | 5% | — |
| Royalties | 5% / 10% | 5% for patents, trademarks, know-how and science; 10% for the rest |
Treaty rates cap tax in the source state. Cyprus charges no SDC on dividends to a non-resident individual. In Ukraine the income is declared under the Tax Code. If a Ukrainian resident controls the Cyprus company, Ukraine's controlled foreign company (CFC) rules apply; see CFC: tax and reporting for owners in Ukraine.
Company and residence
Forming a Ltd grants no immigration status. Working in your own Cyprus company goes through separate Migration Department schemes: companies of foreign interests (employees earning at least €2,500 gross a month on a contract of 2 years or more) or the investor immigration permit (investment of at least €300,000 and income of at least €50,000 a year; the investor may work only as director of the company invested in). Tax residence for founders is covered on Cyprus non-dom and personal tax and residence permit in Cyprus; citizenship on Cypriot citizenship.
How we help
- Review the business, shareholders, place of management and the owners' tax residence.
- Calculate tax in Cyprus and in the owners' country: 15% corporate tax, SDC, treaty rates, CFC rules.
- Compare a Ltd, a branch and a holding for your model and set the substance requirements.
- Bring in incorporation, accounting and audit partners and keep the filing calendar on track.
- For relocation, test personal tax residence: the 183-day or 60-day rule and non-dom status.
Describe the task in two or three sentences: owners' country, business activity, expected turnover and how you plan to take profit out. We will prepare a tailored proposal with the scope of work.
Company formation, a registered address and registry changes in Cyprus for foreign founders are covered on the INNOVA group page: a company in Cyprus for a foreign founder.
Related pages
- Cyprus non-dom and personal tax: 60-day rule, SDC.
- VAT registration in Cyprus: rates and the €15,600 threshold.
- Accounting services in Cyprus: bookkeeping and filings.
- Auditing companies in Cyprus: when a review is enough.
- Opening bank accounts in Cyprus: what banks ask a company for.
- Registration of companies in Europe: EU countries compared.
Sources: Income Tax Law 118(I)/2002, Special Defence Contribution Law 117(I)/2002, VAT Law 95(I)/2000, Companies Law Cap.113, Assessment and Collection of Taxes Law 4/1978 (consolidated texts at cylaw.org); Registrar of Companies: company name, incorporation, after incorporation, annual fee repeal, annual return, late filing, beneficial owners register, overseas company; Business in Cyprus: income tax and VAT; Ukraine–Cyprus convention and 2015 Protocol; Migration Department: companies of foreign interests, investor immigration permit. Checked on 9 October 2026.
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Frequently asked questions
What is the corporate tax rate in Cyprus in 2026?
What are the state fees to register a company in Cyprus?
Do Cyprus companies still pay the €350 annual levy?
Does a small Cyprus company need an audit?
How are dividends from a Cyprus company to a Ukrainian owner taxed?
Does a Cyprus company give me residence?
Can I still get Cypriot citizenship by investment?
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Our advantages
Corporate structuring, company registration in Ukraine and abroad, tax and reporting, migration, bank accounts, DUNS and NCAGE codes. We run the whole project, from choosing the solution to the finished documents.
Confidentiality terms are set out in our contract. We do not pass information about a client or their project to third parties, except where the law expressly requires it.
We compare jurisdictions against your business task: tax regime, reporting, substance requirements and access to banking. On the call we go through the upsides and the limits of each option.
We name the timeline for every step before the work starts — it depends on the jurisdiction, the registrar and the bank. Personal data is used only to deliver the service.
We handle the correspondence with registrars, government bodies and banks and answer their requests ourselves. From you we need documents and signatures.
We take each case to the finish: if an authority or registrar comes back with remarks, we revise the documents at no extra charge. The fee is calculated for your task before work starts.