Guide to Opening a Branch of a Foreign Firm in Cyprus

Cyprus has emerged as a premier destination for international businesses seeking to expand their presence in the European Union. Its strategic location, favorable tax environment, and robust legal framework make it an ideal choice for opening a branch. For a foreign firm, establishing a branch in Cyprus is a straightforward process that provides access to the EU market while leveraging the country’s business-friendly policies. This comprehensive guide will walk you through the entire process, from understanding the legal requirements to navigating the financial and administrative steps, ensuring a smooth and successful setup in 2025. For a broader overview of starting a business on the island, you can read our guide on Cyprus Company Registration: A Step-by-Step Guide 2025.

1. Understanding the Cyprus Foreign Branch

A branch of a foreign company is an extension of the parent company and not a separate legal entity. This means that the parent company remains fully liable for all the debts and obligations of the Cyprus branch. The branch operates under the name of the parent company and its activities are governed by both the laws of Cyprus and the laws of the country where the parent company is incorporated. The branch is registered with the Registrar of Companies in Cyprus, which gives it legal status to operate on the island. This is a very convenient option for companies that want to have a presence in Cyprus without the complexity of a new company registration. The lure is in the speed and convenience of the process, which is often a key factor for a new venture. For more on the local business environment, you can read our guide on The AI-Powered Marketer: Business Adviser.

2. Key Strategic and Financial Advantages

Opening a branch in Cyprus offers several key benefits that make it an attractive option for foreign firms:

Access to the EU Market

As a full member of the European Union, Cyprus provides a gateway to the vast European market. A branch of a foreign firm can leverage this position to expand its operations and serve clients across the EU with ease. This access is a key strategic advantage for companies with a global presence. Our directory of business categories has all the information you need to find a partner on the island.

Favorable Tax Environment

The Cyprus tax system is highly attractive, with a low corporate tax rate of 12.5%, which is one of the lowest in the EU. A foreign branch is considered a permanent establishment in Cyprus and is taxed on its income generated within the country. The country has also signed double taxation treaties with over 60 countries, which prevents a company from being taxed twice on the same income. For professional advice on tax planning, you can find a suitable firm in our finance, banking, and investment and Professional Corporate Services sections.

Ease of Administration

The administrative process of setting up and running a foreign branch is relatively simple and efficient. The legal framework is clear, and the professional services sector is well-developed, with many lawyers and accountants who specialize in international business. This makes it easy for companies to manage their operations and to stay compliant with local laws and regulations. You can explore our Career section to find a good employee or a new job.

3. Step-by-Step Guide to Opening a Branch

The process of opening a foreign branch in Cyprus is governed by the Companies Law, Cap. 113. It is a straightforward process that is typically handled by a professional corporate services provider or a lawyer. Here are the key steps involved:

Step 1: Document Preparation

To register a branch, you will need to prepare and submit a number of documents to the Registrar of Companies. These include:

• A certified copy of the parent company's Memorandum and Articles of Association.
• A certified copy of the parent company's certificate of incorporation.
• A certified copy of the parent company's directors and secretary.
• The name and address of the person authorized to accept service of process in Cyprus.
• The address of the registered office of the parent company in its country of incorporation.

All documents must be translated into Greek and certified by a sworn translator. This is a very important part of the legal requirements and should be handled by a professional to ensure compliance. You can find a professional to help with this in our directory of Professional Corporate Services.

Step 2: Submission and Registration

Once the documents are prepared, they are submitted to the Registrar of Companies. The registration process is fairly efficient, and upon successful completion, you will receive a certificate of registration and a registration number for your branch. After registration, the branch must also register with the tax department and social insurance services. This is a very important step to ensure that your company is legally compliant. You can also explore our guide on permanent residency by property for more information. For more on the business environment, you can check out our guide on Cyprus Property Market Trends 2025.

4. Ongoing Legal and Financial Obligations

Once your branch is registered, there are a number of ongoing legal and financial requirements that you must adhere to. These are designed to ensure the transparency and integrity of the business environment in Cyprus.

Audit and Accounting Fees

A foreign branch is required to have its financial statements audited annually. The audit must be conducted by a licensed auditor in Cyprus. The cost of an audit and accounting services can vary greatly depending on the size and complexity of your company's operations. For a small, dormant company, the cost can start from €1,000 per year. For a more active company, the cost can be much higher. You can find a suitable accounting or auditing firm in our directory. You can also explore our business directory of all businesses on the island to find a good partner.

Registered Office and VAT Registration

A foreign branch must have a registered office in Cyprus. The registered office is the official address of the branch and is used for all legal and administrative purposes. The branch must also register for VAT if its turnover exceeds €15,600 in any 12-month period. The standard VAT rate in Cyprus is 19%. You can get more help and information on choosing a company name in our guide. For any administrative needs, you can explore our directory of all advertising agencies.