Doing business

Cyprus

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Setting up a company | FDI in figures | Why you should choose to invest | Procedures relative to foreign investment | Finding assistance for further information

Setting up a company

Types of companies and capital (max/min)	Number of partners/shareholders and liability
Private Limited Company No minimum capital	Minimum 1 shareholder and Maximum 50 shareholders The responsibility of the associate member is limited to the amount contributed to the total capital.
General Partnership No minimum capital	Minimum 2 and maximum 20 associate members. Each associate member is personally and indefinitely responsible for the debts and obligations of the company
Limited Partnership No minimum capital	Minimum 2 and maximum 20 associate members. 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

Business setup procedures

Setting up a company	Cyprus	Eastern Europe & Central Asia
Procedures (number)	6.0	6.3
Time (days)	8.0	16.3

Source: Doing Business.

For further information: Consult Doing Business Website, to know about procedures to start a Business in Cyprus.
Trade Register
The competent organization: The competent organization is the Registrar of Companies.

FDI in figures

Foreign Direct Investment	2008	2009	2010
FDI inward flow (millions USD)	4,015	5,725	4,860
FDI stock (millions USD)	21,066.0	24,269.5	29,530.3
Performance Index*, ranking on 141 economies	8	2	-
Potential Index**, ranking on 141 economies	52	-	-
Number of Greenfield investments***	18	10	-
FDI inwards (in % of GFCF****)	68.1	14.3	-
FDI stock (in % of GDP)	83.4	114.1	-

Source:

Note: * The UNCTAD Inward FDI Performance index is based on a ratio of the country's share in global FDI inflows and its share in global GDP. ** The UNCTAD Inward FDI Potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R&D, education, country risk. *** Green field investments are a form of foreign direct investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up. **** Gross fixed capital formation (GFCF) measures the value of additions to fixed assets purchased by business, government and households less disposals of fixed assets sold off or scrapped.

Why you should choose to invest Cyprus

Strong points: The country's strong points are:
- Its European Union membership and use of the Euro currency;
- A corporate tax rate among the lowest in Europe;
- A strategic geographical location at the crossroads of three continents and in particular giving access to Middle-Eastern markets;
- A prosperous and stable economy;
- a skilled, multilingual and low-cost workforce; and
- High quality infrastructures, especially in the harbor sector.
Weak points: The country's main weaknesses are:
- The division of the island since 1974 and the difficulties in reaching an agremeent between the Turkish and Greek Cypriots. This could have a negative impact on the country's appeal in the long term.
- The limited size of the domestic market should also be taken into account. Indeed, the population is not over 1 million inhabitants.
Government measures to motivate or restrict FDI: The Cypriot government has created a positive environment for business. The government's liberal policy has promoted investment development. Some measures constitute the key points of the country's appeal:
- The possibility of 100% foreign shareholding in almost all sectors of the economy;
- One of the lowest corporate tax rates of the European Union;
- An attractive tax environment. Cyprus has signed the double-taxation treaties with more than 40 countries; and
- Particularly competitive corporate establishment and operational.
Bilateral investment conventions signed by Cyprus: Cyprus has signed bilateral convention with about 10 countries. To this figure, we have to add the 26 other European Union countries. On the Mediterranean basin, and out of EU, Cyprus only signed bilateral conventions with Egypt and Lebanon. 7 conventions can be found on the UNCTAD. They define the protection framework of FDIs in Cyprus for each signatory country.

Procedures relative to foreign investment

Freedom of establishment: Freedom of establishment is guaranteed.
Acquisition of holdings: 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.
Obligation to declare: Licenses are required when operating in some sectors of the economy like construction.
Competent organization for the declaration: CIPA - Cyprus Investment Promotion Agency
Requests for specific authorizations: Apart from the licensing procedures, there are no particular authorizations that are needed.

Finding assistance for further information

Investment aid agency: Invest in Cyprus
Other useful resources: Focus Business Services