Running a limited company
Contents— A Quick Guide to Directors' Duties in Cyprus
— Taking money out of your Cyprus Company
— Cyprus Company changes you must report to the Registrar of Companies of Cyprus
— Cyprus Company Records you must keep
— Accounting Records the Cyprus Company must Keep
— Prepare Annual Financial Statements
— Obligations of the Cyprus Company to the Registrar of Companies
— Obligations of the Cyprus Company to the Registrar of Taxation
— Obligations of the Cyprus Company to the Social Insurance Services
Taking money out of your company
How you take money out of the company depends on what it’s for and how much you take out.
Salary, expenses and benefits
If your company is going to hire you or any other people as employees and pay you and them salary, expenses or benefits, you must register the company as an employer with the Social Security Services.
The company must withhold Income Tax, Social Security and National Health Insurance System contributions from the salary payments and pay these to the relevant authorities.
If you or one of the other employees of the company make personal use of something that belongs to the company, it must be reported as a benefit and any tax due must be payed.
A dividend is a payment a company can make to its shareholders out of its profits.
Dividends are not considered as business expense and therefore are not deductible when you calculate the company’s Corporation Tax.
Your company must not distribute more dividends than its available profits from current and previous financial years.
The Board of Directors is responsible to suggest the amount of dividends to be distributed.
Tax on dividends
When the Cyprus Company distributes dividends to its shareholders who are natural persons and residents of Cyprus it must withhold 17% tax (special defense contribution).
If the dividend is distributed to a shareholder that is another company or a natural person who is not a resident of Cyprus or is a resident of Cyprus but falls under the category of Non-Doms, then there is no withholding tax.
Directors’ loans / withdrawals
If you withdraw money out of your company or your company loans you money, you must keep records and you must be aware that there are tax implications you must consider.