Cyprus company formation with bank account opening has been a popular option for entrepreneurs, non-residents, and Eastern Europeans in search of tax-efficient structures and easy operations for over a decade.
Unfortunately, opening a corporate account for entities registered in Cyprus isn’t as easy as it once was. But, the registered agents in Cyprus certainly won’t tell you that, since they still need to sell you that shiny new company.
But make no mistake. Cyprus company formation does have benefits, thanks in large part to the access it provides to the EU, favorable taxes (12.5% corporate), and a generous list of double tax agreements.
In this article, we’ll explore all of the benefits (and drawbacks) to be aware of before you move forward with purchasing a package from Cyprus agents that includes corporate formation and financial accounts. Of course, we’ll also discuss what you can do instead.
Feel free to use the table of contents to jump ahead to the section most relevant to you.
Table of Contents
- Company Incorporation in Cyprus
- Account Opening for Cyprus Companies
- Cyprus Offshore Company Formation Alternatives
- Before You Buy an Offshore Company With Bank Account
- Frequent Questions
Company Incorporation in Cyprus
As mentioned, Cyprus has one of the lowest corporate tax rates in the European Union. In fact, it’s tied with Ireland for the third lowest rate, after only Hungary (9%) and Bulgaria (10%).
Additionally, dividends received by Cyprus companies are 100% exempt from almost all taxes, making them a very attractive option if you’re looking to register a tax-optimized holding company.
Plus, Cyprus plays an important role in facilitating investment into Eastern Europe, the Middle East, and parts of Asia, acting as a major conduit for foreign investment.
So, it’s no surprise that many entrepreneurs (and certain types of investors) look at incorporating here, especially those with an eye on expanding into the European Union or investing in the jurisdictions mentioned.
Cyprus Company Formation
If you’re planning on incorporating in Cyprus, you’re probably looking at a Cyprus Ltd. Company or a private company limited by shares.
Limited companies can be formed by a single shareholder (which can include a corporate shareholder), have a single director (which can be a corporate director), and the shareholder information is not publicly available.
Of course, all of the standard requirements that you’d expect for maintaining a company still apply, including local secretary, local registered address, annual reports, and annual fees.
Note: Some jurisdictions do not require companies to submit annual reports (e.g. BVI, Seychelles, Panama, etc.
We’ll take a closer look at some of the pros and cons of Cyprus versus other popular corporate formation options below.
Account Opening for Cyprus Companies
While it may be easy to incorporate a Cyprus company, opening bank accounts for them can be a challenge. This is especially true if you’re operating a non-resident business, have no economic substance anywhere (or no operating address), engage in any high-risk activities, or are unable (or unwilling) to make a large deposit.
That said, there are Cyprus banks that will consider Cyprus companies – as long as your company has a connection to the island, can pass onboarding due diligence, and doesn’t engage in any high-risk industries.
That said, there are alternative account opening options for Cyprus companies (outside of Cyprus) as well…
Where Can Cyprus Companies Open Accounts?
In addition to opening bank accounts in Cyprus for Cypriot companies, business owners can consider opening accounts in the United States, Panama, Switzerland, and Singapore, as well as other EU countries and the Caribbean.
Cyprus Offshore Company Formation Alternatives
If you’re considering incorporating in Cyprus, you may be interested in knowing the differences (from a banking perspective) between Cyprus and other popular jurisdictions. To this end, let’s cover a few popular options that we receive questions about from our members.
UK Company Formation With Bank Account
UK LLPs are a popular option for non-resident individuals seeking a tax-efficient pass-through entity. That said, UK LLPs also face challenges opening accounts because they rarely meet the requirements of UK banks. Of course, there are exceptions. And, there are other non-UK banking options available to UK LLPs, though most entrepreneurs use them specifically to access UK banking and payment processing.
With this in mind, a UK LLP could be a suitable alternative, if you are looking to access UK banking and payment processing. However, it’s important to note that, unlike Cyprus, the UK public registry (Companies House), is available for all to see. So, if you don’t want your name, birthdate, resident status, address, and company financials available on the internet, take note.
BVI Company Formation and Bank Account
BVI BCs (previously IBC) are the most popular offshore entity in existence. BVI companies are used around the world by every nationality and industry imaginable. And, while it may seem counterintuitive that an offshore entity would be “easier” to bank, the popularity of BVI BCs means that both bankers and compliance teams are more familiar with them.
Due to their wider acceptance by banks, BVI BCs are a suitable option to consider if you do not require payment processing. That said, BVI companies can open EU bank accounts. As an added bonus, they are not subject to any tax as long as they conduct activity outside of BVI.
Jersey Company Formation With Bank Account
Jersey is a popular destination for international funds, institutional investors, and a broad range of insurance-related products. With this in mind, if institutional investors are considering incorporating in Cyprus, they may want to consider a Jersey-domiciled entity instead as they can offer very interesting tax advantages.
Can a Foreign Company Open a Bank Account in Cyprus?
Foreign companies can open bank accounts in Cyprus. However, in most cases, they will need to demonstrate a connection with the island. We detail this process in our dedicated Cyprus Banking Report, available to GlobalBanks IQ members and GlobalBanks Insiders.
Before You Buy an Offshore Company With a Bank Account
It’s important to keep in mind that when you use an incorporation service to register your business and open accounts, you typically do not get to choose which banks you’ll open at.
Instead, corporate service providers usually offer one choice, two if you’re lucky. In many instances, this includes digital banks, EMIs, or fintech platforms that do not meet your banking requirements.
Ready to Open Accounts in Cyprus?
If so, you can access GlobalBanks Insider and start the process of applying for an offshore account in a few clicks.
GlobalBanks Insider is a dedicated account opening solution that involves direct support from our team and direct introductions to the banks of your choosing. It gives you instant access to the…
+ Direct support from a team of banking experts
+ Direct introductions to your desired banks
+ Answers to your most pressing questions and challenges
+ Expert insights on which banks to choose & why
+ Plus, FULL access to our entire suite of account opening tools and intelligence!
And “yes!” GlobalBanks Insider is designed to help foreign and non-resident individuals and companies open bank accounts.
You can learn more on the Products page on our website.