Author: Mr. Charalambos Papasavvas
Advocate – Legal Consultant
Managing Partner of PAPASAVVAS & LISKAVIDOU LLC
Founder of RELOTECH EXPERTS
Founder of NEOCOURSES INNOVATION CENTER
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Cyprus, a country in the Eastern Mediterranean, has emerged as a preferred destination for international businesses owing to its locational advantage, EU membership, and favorable tax regime. Of all the corporate entities available, BCS Companies, or Foreign Interest Companies, are highly attractive foreign investor-friendly models that can make their operations easier. This article describes what is a BCS Company, who can benefit from its incorporation, its main advantages, and how to incorporate it.
What is a BCS Company in Cyprus?
A BCS Company or Foreign Interest Company is a private limited foreign owned company in Cyprus by companies or individuals.
Intended to attract overseas investment, the businesses enjoy favorable taxation, hence emerging as the most sought after company type for foreign firms and business persons. Possessing legal personhood, a BCS Company is able to enter into contracts, acquire property, and conduct business in its own name, with the registered office being the center of all administrative and legal activities.
Who can make use of a BCS Company?
BCS Companies are appropriate for most individuals and institutions, including:
Foreign Investors
The overseas investor who would wish to access the European market can possibly do so through the business environment-friendly climate in Cyprus through a BCS Company.
Multinational Corporations
Large corporations desiring an EU regional headquarters utilize the geographical location and fiscal benefits of Cyprus.
International Entrepreneurs and SMEs
International growth can be achieved by small to medium enterprises using Cyprus as an entry point for the EU, maximizing low taxation and market access.
Key Benefits of a BCS Company in Cyprus
The presence of a BCS company in Cyprus provides numerous benefits
Low Tax Rate: Cyprus possesses one of the lowest corporate tax levels within the EU at 12.5%, increasing the company’s profitability.
Double Taxation Agreements
Since it has over 65 treaties, including the UK, Russia, US, and China, double taxation on border transactions is not a problem for companies.
Tax Exemptions on Dividends and Profit
BCS Companies enjoy tax exemptions from profits of foreign subsidiaries and dividends and therefore are best for holding structures.
No Tax on Capital Gains
Capital gains from disposing of securities or shares other than in Cyprus are exempt from tax, safeguarding investor profits.
EU Single Market Access Duty-Free
As an EU member nation, Cyprus offers duty-free access to the single market of the EU, opening up wider trading opportunities.
Personal Taxation Relaxed
Directors who are foreign are eligible for relief on dividends, interest, and foreign-source income under the Cyprus non-domicile regime.
IP Box Regime
Companies that generate turnover from intellectual property are subjected to an effective tax rate of just 2.5%, and thus are attractive to
technology and R&D enterprises.
Terms for the Incorporation of a BCS Company
To form a BCS Company, the following terms need to be met:
Foreign Ownership
Non-Cypriot persons or entities should own the majority share.
Residency and Work Permits
Workers and owners can get residency and work permits by applying on behalf of the company.
Minimum Employees’ Salary
The employees with high qualifications must receive a minimum gross monthly salary of €2,500.
Professional Qualifications
The employees must possess adequate qualifications or at least two years of professional experience in the same profession.
Registered Office
Administrative and legal needs are fulfilled with an office in Cyprus.
Limited Liability
Shareholders’ liability is capped to the contributed capital, protecting their personal wealth.
Step-by-Step Procedure to Form a BCS Company
The process to form a BCS Company becomes simple with proper guidance:
› Company Name Approval
Provide an original name to the Registrar of Companies of Cyprus to be vetted, so that it does not sound similar to
already registered names.
› Document Preparation
Draft the Memorandum and Articles of Association, stating the purpose and structure of the company.
› Shareholder and Director Appointment:
Minimum one director and one shareholder to be appointed; it is advisable to have a resident director in Cyprus for tax
reasons.
› Registered Office Setup
Registering an office in Cyprus for official correspondence.
› Corporate Bank Account Setup
Open a corporate bank account with stringent KYC compliance rules.
› Tax and Social Insurance Registration
Registration with Cyprus tax authorities and social insurance authorities.
› Staff Recruitment
Employ staff, exercising care to maintain the minimal pay and requirement terms.
How Papasavvas & Liskavidou LLC can Assist
Papasavvas & Liskavidou LLC offers detailed assistance within the registration of a BCS Company, including steps ranging from name
registration and taxation to staff recruitment and applications for work permits. They ensure a smooth process so that businesses
are able to concentrate on growth while being in accordance with Cyprus’ laws.
Why Incorporate Your BCS Company in Cyprus?
Cyprus is a business-friendly destination with strategic advantages, and therefore an ideal launching pad for expansion worldwide. Its
tax-free economy, EU market access, and hospitality-based legal environment offer an ideal launching platform for commercial success. Incorporating a BCS Company in Cyprus is not a business choice—it is a business recipe for success in a thriving economy.
