Post-Registration Company Maintenance in Cyprus: Reporting, Requirements and Obligations

Registering a company in Cyprus is an important step for businesses aiming to enter the European market, benefit from tax advantages, and operate within a stable legal environment. However, registration itself is just the beginning. After obtaining certificates and opening bank accounts, a new stage begins, during which the company is required to comply with a number of tax, accounting, corporate, compliance, and AML policy obligations. 

Lack of understanding or ignoring these obligations may result in fines, account freezes, and reputational damage. That is why we have prepared this guide — a concise and practical roadmap to help you navigate regulatory requirements and confidently manage your company in compliance with Cypriot law. 

In this article, we will cover the key reports, document submission deadlines, features of the tax system, audit obligations, financial reporting requirements, and other important aspects that every company owner should be aware of. 

1. Tax Obligations 

 1.1. VAT (Value Added Tax) 

Standard and Reduced Rates 
Cyprus, as a member state of the European Union, adheres to the general principles of EU VAT legislation. The standard VAT rate in Cyprus is 19% and applies to most goods and services. 

In addition to the standard rate, there are reduced VAT rates: 

• 5% — applies, in particular, to certain food products, pharmaceuticals, books, and public transport services.
• 9% — applies, for example, to hotel services, rental of tourist accommodation, and catering services.
• 0% — this rate applies to certain export operations, international transport, and some financial or educational services. 

Correctly determining the applicable rate for a specific type of activity is a key factor in avoiding mistakes when preparing VAT returns. 

Mandatory and Voluntary Registration 

Registering a company as a VAT payer in Cyprus can be mandatory or voluntary, depending on the volume and nature of its activities. 

Mandatory VAT registration is required if: 

• the total value of taxable supplies made by the company over the past 12 months exceeds €15,600;
• the company expects to exceed this threshold in the near future and can confirm it with contracts or invoices;
• the company conducts B2B transactions within the EU, even if the volumes are small — in order to participate in the VIES system. 

Voluntary VAT registration is possible even if the turnover has not yet reached the €15,600 threshold. This can be useful in the following cases: 

• There is an intention to conduct B2B transactions within the EU where a VAT number is required for the VIES system.
• The company plans to carry out operations that involve VAT refunds.
• There is a desire to apply a zero rate for cross-border supplies. 

VAT Return Filing 
After a company is registered as a VAT payer in Cyprus, it is required to submit a VAT return every quarter, even if it has not carried out any taxable transactions during that period. 

Filing specifics: 

• The return is submitted online through the Taxisnet platform;
• Filing deadline — no later than 40 days after the end of the reporting quarter;
• The return must include: 
  • the volume of taxable supplies,
  • the amount of output VAT charged,
  • the amount of input VAT paid on purchases,
  • the final amount payable or refundable. 

Even if no business activity was conducted, a zero return must still be filed — otherwise, the company will be fined. 

Liability for Non-Compliance 

• Late filing penalty — €100 for each instance of late submission;
• Late registration penalty — €85 per month;
• Late payment of VAT is subject to interest and additional penalties — specifically, a 10% fine on the unpaid VAT amount plus interest for each day of delay. 

Participation in the VIES System 

VIES (VAT Information Exchange System) is a pan-European system for exchanging information between EU tax authorities. It allows verification of a counterparty’s VAT number and confirms that both parties to a transaction are registered VAT payers. This is particularly important for B2B transactions within the EU, which are taxed under the “reverse charge” mechanism (VAT payment obligation shifts to the buyer). 

Important:

• If a company provides taxable goods or services to other companies in EU countries, it is required to register in the VIES system; 
• In such cases, the company must also submit monthly VIES reports, even if the reporting period is “zero”. 

VIES registration is not required if the company works exclusively with clients in Cyprus or outside the EU and does not carry out transactions with European companies. 

OSS System (One-Stop Shop) 

OSS is a simplified VAT reporting system for companies providing digital, telecommunications, or electronic services to end consumers (B2C) in the European Union. 

The benefit of OSS is that it eliminates the need to register in every country where customers are located. Instead, the company registers in Cyprus (its country of tax residence) and submits a single consolidated quarterly return covering all sales to EU countries. 

Common activities falling under OSS include: 

• Sales of SaaS products or subscriptions;
• Provision of online video or music streaming services;
• Online sales of goods to private individuals in other EU countries. 

Key requirements: 

• Registration in the OSS system must occur before starting the activity;
• Returns are submitted quarterly, even if the turnover for the period is zero;
• VAT must be paid to the budget of the end consumer’s country. 

1.2. Corporate Income Tax in Cyprus 

What is Corporate Income Tax? 

Cyprus offers one of the most attractive corporate tax regimes in Europe for companies operating internationally. The corporate income tax rate (CIT) is currently 12.5% — one of the lowest in the EU. 
This tax is levied on the company’s taxable profit, i.e., income after deducting allowable expenses. 

What is Included in Profit Calculation? 

Taxable Profit = Income – Deductible Expenses 

Expenses that can reduce taxable profit include: 

• employee salaries;
• marketing and advertising costs;
• office, equipment, and software expenses;
• consulting and legal services;
• accounting and audit fees;
• asset depreciation;
• business travel expenses, etc. 

Important: All expenses must be documented and directly related to the company’s business activity. 

Tax Return Filing 

Companies in Cyprus are required to annually submit a corporate income tax return (form TD4). Additionally, they must provide a temporary profit assessment (form TD6) before the end of the financial year. 

Key dates: 

• 31 July of the current year — submission of form TD6 and payment of the first provisional tax installment (50%);
• 31 December of the current year — payment of the second provisional installment (50%);
• By 1 August of the following year — payment of the balancing tax amount (if applicable);
• By 31 March of the second year after the reporting year — submission of the final tax return TD4;
• If the actual profit exceeds the previously estimated amount by more than 25%, the taxpayer must submit a revised TD6 by 31 December, with an additional 10% tax surcharge and a late payment penalty. 

Penalties for Late Payment

Failure to meet tax obligations results in financial penalties, including: 

• 5% fine on the unpaid tax amount for delayed payments;
• Interest charged for each day of delay; 
• Administrative fine for not filing the return;
• Significant underreporting of profits may trigger additional inspections or audits by the tax authorities. 

—  Do I Need to Pay Tax if the Company is Inactive? 
If a company does not generate any profit, no tax is due. However, filing a tax return remains mandatory. Moreover, caution is advised regarding “dormant” company status — even if the company is not actively operating, tax and reporting obligations still apply. 

2. Financial Reporting 

Maintaining Accounting Records in Accordance with International Standards 

After company registration in Cyprus, one of the primary obligations is to maintain accounting records in compliance with the International Financial Reporting Standards (IFRS) adopted at the EU level. 

All companies, regardless of size or type of activity, must: 

• record income and expenses;
• track cash flow;
• retain source documents (invoices, contracts, bank statements, etc.);
• account for assets and liabilities. 

Cypriot law requires that all records be kept for at least 6 years and be available for inspection in the event of an audit or a regulatory request. 

Annual Submission of Financial Statements 

Financial Statements (FS) are the final documents that reflect the company’s financial position for the reporting period. They are prepared annually based on the accounting records. 

Important: 

• The first set of FS must be submitted no later than 18 months after the company’s registration date;
• Thereafter, FS are submitted annually along with the Annual Return (form HE32);
• Financial statements are subject to a mandatory audit, even if the company has had no active operations. 

A typical set of FS includes: 

• Statement of Financial Position (Balance Sheet);
• Statement of Profit and Loss;
• Cash Flow Statement;
• Notes to the Financial Statements. 

Annual Return (Form HE32): What It Includes and Deadlines 

The Annual Return (form HE32) is a mandatory yearly report submitted to the Cyprus Registrar of Companies. It contains corporate information confirming that the company’s records are up to date. 

Form HE32 includes: 

• company registration details;
• registered office address;
• list of directors, the secretary, and shareholders;
• information on share capital;
• confirmation that the company complies with legal requirements. 

Deadlines: 

• The Annual Return must be submitted every year within 12 months from the submission date of the previous HE32 form;
• The most recent audited Financial Statements reflecting the company’s financial position at the return date must be attached to HE32. 

Failure to submit the Annual Return or financial statements on time may result in fines, negatively affect the company’s business reputation, or even lead to removal from the register. 

3. Audit 

Mandatory Audit Requirement for Companies in Cyprus 

According to Chapter 113 of the Companies Law, an audit is a mandatory requirement for all companies registered in Cyprus — regardless of their size or whether they have conducted any business activity during the year. 
This obligation applies even to companies that had no operations throughout the year: they are still required to submit audited financial statements. 

An audit is an independent examination of the accuracy of a company’s financial reports. It ensures transparency and confirms that the company’s activities comply with applicable laws and financial reporting standards (IFRS). 

Who Is Authorized to Conduct an Audit 

Audit services can be provided by: 

• Licensed audit firms registered in Cyprus;
• Individual auditors who hold official qualifications and authorization to practice audit services. 

Typically, the auditor is appointed by the company’s shareholders. This can be an external independent professional or a permanent audit firm that has been supporting the company since its incorporation. 

Purpose and Essence of an Audit 

The main objectives of an audit are to: 

• Verify the accuracy of the data contained in the financial statements;
• Assess whether the accounting practices comply with IFRS standards;
• Identify potential errors or manipulations;
• Produce an audit opinion/report, which is submitted along with the financial statements to government authorities and investors. 

The auditor checks the data presented in the financial statements against source documents, bank statements, contracts, and accounting records. Based on this, they issue a conclusion on the truthfulness and reliability of the submitted information. 

Consequences for Companies in Case of Non-Compliance 

An audit is not a formality — it is a serious legal obligation. Failure to comply with audit requirements can lead to a range of consequences: 

• The tax authorities may initiate an inspection;
• The company will be unable to submit the Annual Return (HE32) without audited financial statements;
• Fines may be imposed for failure to submit reports or for concealing material information;
• In the case of significant discrepancies (e.g., if the declared income is more than 25% lower than the actual amount), a 10% fine on the difference is applied. 

Beyond financial penalties, the company’s reputation is at risk, which can complicate relationships with banks, investors, and business partners. 

Expert Tip 

— To avoid problems, it is crucial to: 

– maintain proper accounting from day one of the company’s operations;
– work with a professional accountant and auditor familiar with Cypriot legislation;
– start preparing for the audit well in advance, rather than waiting until the last moment before the reporting deadline. 

— Tetiana Romaniuk 
Head of Finance, Taxus Law & Finance 

Planning for your audit or looking for a reliable support partner? 
Our specialists will help you establish proper accounting, prepare reports in accordance with IFRS requirements, and ensure a risk-free audit process.

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4. Corporate Law 

Why Corporate Compliance Matters 

After registering a company in Cyprus, the owner is responsible not only for financial and tax obligations but also for complying with corporate law. This includes maintaining an appropriate company structure, keeping registration details up to date, and managing corporate documents properly. 

These requirements are part of general compliance — ensuring alignment with applicable laws. Ignoring them may lead to fines, suspension of the company’s activities, or even forced removal from the Companies Register. 

Notifying the Registrar of Companies about Changes 

According to Chapter 113 of the Companies Law, companies are required to promptly inform the Registrar of Companies about any significant changes concerning their structure or operations. This includes: 

• Change of company name; 

• Appointment or change of directors or secretary; 

• Change of registered office address; 

• Changes in share capital (including transfer or sale of shares); 

• Registration of charges (pledges or other encumbrances) on company assets. 

These changes must be registered and also reflected in the company’s internal registers. All updates must be included in the Annual Return (form HE32). 

Maintaining Corporate Documents 

Every company must keep its corporate documentation properly organized, including: 

• Memorandum and Articles of Association — the primary documents outlining how the company is governed;
• Shareholders’ Register;
• Register of Directors and Secretaries;
• Register of Registered Offices;
• Minutes of shareholders’ and directors’ meetings. 

Having these documents complete and up to date is not just a formality — it is a legal requirement, which may be reviewed during audits, bank applications, or when dealing with investors. 

Conclusion 

Corporate compliance is not a one-time task — it is an ongoing process that requires attention and legal support. Timely updates to registries, proper documentation, and compliance with legal requirements form the foundation of your company’s smooth and secure operation in Cyprus. 

5. Anti-Money Laundering (AML) Legislation 

What Is AML and Why Is It Important? 

Anti-Money Laundering (AML) legislation is a set of requirements aimed at preventing the use of companies in schemes involving money laundering, terrorist financing, or tax evasion. 
In Cyprus, AML regulation is based on European Directives and the local Prevention and Suppression of Money Laundering and Terrorist Financing Law. 

These requirements apply not only to licensed institutions such as banks or financial companies. Even a regular business operating online must follow basic AML principles. 

Company Obligations Under AML 

Even if your company does not hold a financial license, you may still be required to implement internal AML procedures in certain situations, such as when: 

• You handle large volumes of funds;
• You provide B2B services within the EU;
• You work with high-risk clients (e.g., from non-EU countries or offshore jurisdictions);
• You open accounts in financial institutions. 

Key Elements of an AML Policy 

1. KYC (Know Your Customer)

• Collect passports, company registration documents, and proof of address.
• Check clients against sanctions lists, PEP (Politically Exposed Persons) databases, and adverse media. 

2. Risk-Based Approach 

• Categorize clients by risk level: low, medium, or high.
• Apply appropriate verification measures for each risk category. 

3. Recordkeeping 

• Client data must be retained for at least 5 years.

4. Suspicious Activity Monitoring 

• Keep an internal log of any suspicious transactions.
• Report any suspicious behavior to the regulator or financial institution. 

5. Appointment of an AML Compliance Officer 

• In more complex structures or higher-risk cases, it is recommended to appoint a dedicated person responsible for overseeing AML compliance. 

Inspections and Consequences of Non-Compliance 

• Financial institutions (banks, payment providers) may request documentation related to your counterparties — and may refuse service if your company lacks a proper AML system. 
• Violations of AML regulations can lead to: 
  • Fines,
  • Freezing of accounts, 
  • Exclusion from banking services, 
  • And in some cases — criminal liability. 

Practical Recommendations 

• Develop a basic AML policy, even if your company is not licensed.
• Implement templates for customer verification (KYC forms, checklists).
• Use specialized services to screen counterparties (e.g., Dow Jones Risk, World-Check, Sanctions Tracker, etc.).
• Conduct periodic reviews of existing clients. 

Conclusion 

AML compliance is not only a legal obligation, but also a way to build trust with banks, partners, and regulators. 
In today’s environment, transparency and compliance are a competitive advantage. 

6. Ultimate Beneficial Owner (UBO) Register 

What Is the UBO Register? 

This is a government system where companies are required to submit information about their ultimate beneficial owners — individuals who directly or indirectly own or control the company. 

 📌 A UBO (Ultimate Beneficial Owner) is a natural person who owns ≥25% of the company or exercises control through other means (e.g., via another legal entity, trust, or nominee shareholder). 

Company Obligations 

1. Submit UBO information electronically via the Ariadni portal.

2. Update the data if any changes occur.

3. Confirm the accuracy of information annually — between October 1 and December 31. 

What Information Must Be Submitted? 

For each UBO, the following must be entered: 

• Full name 
• Date of birth 
• Nationality 
• Country of residence 
• Type of control (direct ownership, through another company, etc.) 
• Ownership percentage 
• Supporting document confirming UBO status (passport, company registry, ownership structure, etc.) 

Submission via the Ariadni Portal 

To submit UBO information, the company must: 

1. Register on the Ariadni system: https://eservices.cyprus.gov.cy 

2. Obtain access for the director or secretary. 

3. Submit UBO data through the dedicated section. 

🔐 Registration on Ariadni is mandatory for many other filings (e.g., Annual Return, director changes), so it’s advisable to complete this immediately after company registration. 

Penalties for Non-Compliance 

• If a company fails to submit or update its data, it is subject to: 
  • A one-time fine of €200, and 
  • A daily fine of €100, up to a maximum of €20,000. 
• Fines are imposed by the Registrar of Companies. 

Conclusion 

The UBO Register is a crucial part of business transparency in Cyprus and a key component of AML obligations. Violating the requirements can be costly, so it is essential to set up the submission and update process right after company incorporation. 

7. Post-Registration Company Maintenance: What You Need to Know 

Registering a company in Cyprus is just the first step. To ensure that the company operates in compliance with the law and avoids fines, it must be regularly maintained — both from a legal and technical standpoint. 
Below are the key elements of ongoing company maintenance. 

1. Local directors / shareholders 

Appointing Cyprus-resident directors or shareholders helps to: 

• provide on-the-ground representation, which many banks and regulators require; 
• satisfy formal corporate-governance rules and demonstrate genuine business substance in Cyprus; 
• enhance counterparties’ trust and simplify dealings with government authorities. 

All persons acting on the company’s behalf must undergo mandatory AML checks and bear personal responsibility for the legality of their actions. 

2. Registered Office Address in Cyprus 

Every company is required to have a registered office address in Cyprus. 
This is the address: 

• that appears in the public registry, 
• where official correspondence is sent, 
• used for tax and legal purposes. 
   

📦 Often, this address is provided by the company’s service provider (e.g., corporate secretary or legal representative). 

3. Secretarial Services 

A Cypriot company is required to have a secretary — either an individual or legal entity — responsible for managing corporate documentation and liaising with authorities. 

Secretary’s responsibilities include: 

• Preparing and filing the Annual Return (HE32); 
• Maintaining registers of shareholders, directors, and beneficial owners; 
• Registering changes to the company structure (e.g., director or address updates); 
• Preparing meeting minutes and resolutions. 

📌 While the role of the secretary may seem formal, it is crucial for ensuring corporate compliance. 

4. Annual Corporate Documentation Updates 

At least once a year, the company must: 

• Update registers of directors, shareholders, and UBOs; 
• Review key corporate documents — Memorandum, Articles of Association, contracts; 
• Ensure the company has not lost its good standing. 

Many companies neglect this, which later leads to issues with banks, licensing, or audits. 

5. Ongoing Compliance Support 

Beyond formal maintenance, there are often requests such as: 

• Providing a certificate of good standing; 
• Preparing documents for a bank or business partner; 
• Making amendments to the Memorandum; 
• Adding new shareholders, and more. 

For this reason, it’s beneficial to have long-term support from a service provider, rather than handling documents on a case-by-case basis. 

Maintaining a company is an ongoing process that ensures the legal and tax integrity of your business.

TAXUS is a comprehensive provider that takes care of:

• your registered office address,
• secretarial services,
• filing of returns and structural changes,
• support with banking, audits, and the UBO Register.

This saves you time, reduces risk, and allows you to focus on growing your business.

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8. Working with Banks and Payment Systems 

After registering a company in Cyprus, many entrepreneurs face difficulties opening a bank account. Due to increased international financial monitoring, banks have become more cautious, and the account opening process is now longer and more formalized. 

Opening a Corporate Account: What to Expect 

Banks in Cyprus or the European Union may request the following documents: 

• Company certificates (incorporation, directors, shareholders); 
• Memorandum and Articles of Association; 
• Copies of passports of the beneficial owners and directors; 
• Proof of residential address (utility bill, bank statement); 
• Business plan or a description of company activity; 
• Agreements with key clients or counterparties; 
• Proof of income sources (proof of funds). 

📌 Important: The bank will evaluate not only the documents but also the realistic nature of the business, its connection to the declared countries, and the transparency of financial flows. 

An overview of account opening specifics for foreign beneficiaries and directors: documentation requirements, customer reliability criteria, and what influences the bank’s decision can be read in the article Cyprus Bank Account For non Residents. 

EMIs/PSPs as Alternatives 

Due to the complexity of dealing with traditional banks, many Cypriot companies opt for electronic payment systems: 

• EMIs (Electronic Money Institutions): Wise, Revolut, Payoneer, etc. 
• PSPs (Payment Service Providers): Paysera, iCard, Intergiro, etc. 

These providers also conduct KYC/AML checks, but the process is generally more streamlined than in traditional banks. 

We also recommend reading the article Cyprus Bank Account Opening Services. A comprehensive guide to the stages of account opening, bank requirements, and how to prepare for due diligence. Ideal for saving time and avoiding common mistakes. 

Factors That Influence a Bank’s or Provider’s Decision 

• Reputation of the beneficial owner and company structure; 
• Type of activity (high-risk areas like gambling, crypto, forex, adult can complicate account opening); 
• Transparency and proper documentation of operations; 
• Presence of a website, contracts, and real clients/counterparties. 

Recommendation: Prepare documents in advance and consult a professional provider with experience working with financial institutions. 

Opening a business account requires preparation and expertise.

We support our clients at every stage of working with banks and payment systems.

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Employee Reporting and Social Contributions 

If a company hires employees (including a director receiving a salary), it must register as an employer, register employees with social authorities, and monthly withhold and pay applicable taxes and contributions (PAYE, Social Insurance, GESY). 
Reporting is done through electronic systems, and compliance with labor law is required. 

If the company does not employ anyone, these obligations do not apply. However, a director cannot receive an official salary without registration. 

Key Takeaways: What to Remember After Company Registration in Cyprus 

Company registration is just the beginning. The real responsibility starts after obtaining the certificates and opening bank accounts. 

Keeping your company compliant and in good standing is a continuous process that includes: 

• Regular reporting (VAT, corporate tax, financial statements); 
• Updating corporate records (directors, shareholders, UBOs, constitutional documents); 
• Complying with AML and internal compliance standards; 
• Maintaining relations with banks or payment providers. 

Why it matters: 

• To avoid fines, account freezes, or removal from official registries; 
• To build a positive reputation with banks, partners, and investors; 
• To be ready for audits, inspections, or license applications; 
• To maintain “good standing” status. 

Tip: Work with experienced consultants who can take over the technical and legal responsibilities. 
This allows you to focus on business growth, not bureaucracy.