Why Cyprus
Cyprus is an EU member with one of the lowest corporate tax rates in the EU (12.5%). English law, a well-developed international business infrastructure and a strong reputation make it the top choice for IT companies, SaaS founders and holding structures.
Tax System
| Type | Rate |
|---|---|
| Corporate tax | 12.5% |
| IP Box (intellectual property income) | 2.5% |
| Dividend tax (non-residents) | 0% |
| VAT | 19% (standard) |
| Capital gains tax | 0% (foreign shares) |
Who It Is For
- IT and SaaS companies serving European clients
- Holding structures for owning shares in other companies
- Software developers and IP owners (IP Box: 2.5%)
- Companies that need EU status for banking and partners
Requirements
- Valid passport of founders and directors
- Proof of address
- Registered office in Cyprus (provided by agent)
- Local director (recommended for substance)
Cost & Timeline
| Item | Amount |
|---|---|
| Company registration | from €1,500 |
| Annual maintenance | from €1,200/yr |
| Government fees | ~€350/yr |
| Registration time | 5–10 business days |
| Bank account | 2–6 weeks |
Pros & Cons
Pros:
- EU status — recognised by banks, PSPs and partners worldwide
- 12.5% corporate tax — one of the lowest in the EU
- IP Box: 2.5% on patent, software and IP income
- 0% dividend tax for foreign shareholders
- English law, large Russian-speaking legal community
- Good access to Stripe, Wise, PayPal
Cons:
- Post-2022 banks are stricter with Russian founders: thorough KYC
- Real substance is required for full tax benefits
- 19% VAT registration required above threshold
- Local director recommended for substance
FAQ
Is a local director required in Cyprus?
Formally, no — but for substance (Cyprus tax residency) a Cypriot director is strongly recommended. Without substance, tax authorities in other countries may challenge the company's residency.
Do Stripe and Wise work with Cyprus companies?
Yes. Cyprus is a fully supported jurisdiction. Stripe, Wise and PayPal are available without restrictions.
Can I open a Cyprus bank account remotely?
Traditional banks (Bank of Cyprus, Hellenic Bank) require an in-person visit. It's better to start with fintech (Wise, Revolut Business) and add a bank later.
What is the Cyprus IP Box?
The IP Box regime exempts 80% of qualifying IP income from tax, resulting in an effective rate of 2.5%. It covers patents, software, trademarks (subject to OECD BEPS compliance).