Company Limited by Guarantee in Cyprus

Company Limited by Guarantee · Formation from $265

Last verified: June 13, 2026

Corporate Tax

15.0%

State Tax

0.0%

Formation Cost

$265

Annual Fee

$22

Comparison Scores

Privacy, remote setup, banking, and tax efficiency

Privacy4/10

Remote Setup7/10

Banking6/10

Tax Efficiency8/10

Overall Score7/10

Calculate full formation cost

Break down one-time filing fees and recurring costs for any supported entity type.

Who Should Choose This?

Profiles that typically benefit from this entity

Founders establishing a charity, NGO, or philanthropic organization.
Professional bodies, trade associations, and industry groups.
Sports clubs, cultural societies, and community organizations.
Educational or research institutions that reinvest all surplus funds.

Who Should Avoid This?

Scenarios where another structure may be better

Entrepreneurs looking to build a profitable business and distribute dividends.
Startups seeking venture capital or angel investment (investors need equity/shares).
E-commerce, SaaS, or standard trading businesses.

Advantages

+Ideal legal structure for non-profits, charities, clubs, and professional associations.
+No minimum share capital required; members only guarantee a nominal amount (e.g., €10-€100).
+Can apply for tax-exempt status if officially recognized as a charitable institution by the Ministry of Finance.
+Strong credibility and recognized legal structure based on UK common law.
+Members have limited liability, protecting their personal assets from the entity's debts.
+Profits are strictly reinvested into the organization's mission, ensuring focus on the core purpose.

Disadvantages

-Not suitable for commercial, profit-making businesses since profits cannot be distributed as dividends.
-Requires a local registered office and a company secretary in Cyprus.
-Must prepare and file audited financial statements annually, which significantly increases maintenance costs.
-Opening a bank account for a non-profit in Cyprus can be time-consuming due to strict AML/KYC regulations.
-Applying for official charitable tax-exempt status is a separate, rigorous, and lengthy process.

Formation Steps

Name Approval: Submit the proposed entity name to the Cyprus Registrar of Companies for approval (takes 2-5 days).

Drafting the M&A: Prepare the Memorandum and Articles of Association, specifically outlining the non-profit objectives and the guarantee amount of each member.

Appoint Officers: Appoint a board of directors (management committee) and a local company secretary.

Establish Registered Office: Secure a physical registered office address in Cyprus.

Filing Documents: Submit the M&A, officer details, and registered office address to the Registrar of Companies (takes 5-10 days).

UBO Registration: Register the Ultimate Beneficial Owners (or senior managing officials for non-profits) with the Cyprus UBO Registry.

Tax Registration: Register the entity with the Cyprus Tax Department to obtain a Tax Identification Code (TIC).

Bank Account Opening: Open a corporate bank account, providing extensive KYC and details of the organization's purpose and funding sources.

Charitable Status Application (Optional): Apply to the Ministry of Finance for official recognition as a charity to obtain tax exemptions.

Cost Breakdown

Detailed breakdown of formation and ongoing costs

Item	Type	Amount
State filing fee (Registrar of Companies)	One-time	$180
Legal / Professional Formation Fees	One-time	$1,000
Registered Agent, Secretary & Office	Annual	$1,200
Annual Accounting & Audit (Basic)	Annual	$2,000
First year total		$4,380
Annual ongoing		$3,200

Real-World Examples

Typical use cases for this entity type

Cyprus Red Cross Society: Operates under a non-profit structure to provide humanitarian aid.
Professional Associations: Entities like the Institute of Certified Public Accountants of Cyprus (ICPAC) operate as guarantee companies.
Local Sports Clubs: Many Cypriot football and athletic clubs are structured as companies limited by guarantee to manage community assets without profit distribution.

Common Mistakes

Pitfalls to avoid during setup and operations

Choosing a CLG for a standard commercial business, not realizing profits cannot be distributed.
Underestimating the annual compliance costs, specifically the requirement for audited financial statements.
Assuming the entity is automatically tax-exempt without applying for charitable status from the Ministry of Finance.
Failing to register the senior managing officials in the UBO registry, leading to administrative penalties.
Not securing a local company secretary, which is a strict statutory requirement in Cyprus.

Other entity types

Other formation options in Cyprus

Private Company Limited by Shares (LTD)

Primary

Tax: 15.0%
Formation: $380

Public Company Limited by Shares (PLC)

Tax: 15.0%
Formation: $180

Branch of an Overseas Company

Tax: 15.0%
Formation: $410

General Partnership

Tax: 0.0%
Formation: $130

Limited Partnership

Tax: 15.0%
Formation: $140

Sole Proprietorship

Tax: 0.0%
Formation: $100

Variable Capital Investment Company (VCIC)

Tax: 15.0%
Formation: $180

Compare with Other Countries

Country / Type	Tax	Formation	Annual
🇨🇾 Company Limited by Guarantee(Company Limited by Guarantee)	15.0%	$265	$22

🇨🇾 vs 🇺🇸 United States 🇨🇾 vs 🇪🇪 Estonia 🇨🇾 vs 🇬🇧 United Kingdom 🇨🇾 vs 🇮🇪 Ireland All comparisons →

FAQ

What is a Company Limited by Guarantee in Cyprus?

It is a legal entity where members do not hold shares but guarantee to pay a nominal sum if the company is wound up. It is primarily used for non-profits, clubs, and charities.

Can a Company Limited by Guarantee distribute profits to its members?

No, any surplus income must be reinvested into the organization to promote its stated objectives. It cannot distribute dividends.

Is there a minimum share capital requirement?

No, there is no share capital. Members only agree to a guarantee amount, often as low as €10 to €100.

Do these companies pay corporate tax in Cyprus?

If they engage in taxable trading activities, they are subject to the standard 15% corporate tax rate (as of 2026). However, recognized charities approved by the Ministry of Finance are exempt.

Is an annual audit required for a non-profit in Cyprus?

Yes, all Cyprus companies, including Companies Limited by Guarantee, must prepare audited financial statements and submit an annual return.

Was the €350 annual company levy abolished?

Yes, the Cyprus government abolished the €350 annual company levy for all registered companies starting in 2024.

Can foreigners form a Company Limited by Guarantee in Cyprus?

Yes, foreign nationals can be members and directors, though having a local director is often recommended for tax residency and banking purposes.

How long does it take to register?

The registration process with the Registrar of Companies typically takes 1 to 2 weeks after name approval, but opening a bank account can take several weeks or months.

Detailed Tax Rates

Corporate Income Tax

From	To	Rate

The standard corporate income tax rate increased to 15% effective January 1, 2026. A Company Limited by Guarantee is subject to this rate on any taxable trading income, though non-profit activities may be exempt.

Personal Income Tax (Top rate: 35.0%)

From	To	Rate
$0	$22,000	0.0%
$22,001	$32,000	20.0%
$32,001	$42,000	25.0%
$42,001	$72,000	30.0%
$72,001	No limit	35.0%

Cyprus applies a progressive personal income tax system with a tax-free threshold of €22,000 as of 2026. Non-domiciled residents enjoy significant exemptions on dividend and interest income.

Capital Gains Tax

20.0%

Capital gains tax is levied at 20% exclusively on gains from the disposal of immovable property situated in Cyprus, or shares in companies that own such property.

VAT / GST

19.0%

Registration Threshold: EUR15,600

B2C digital services provided to EU consumers are subject to VAT at the consumer's local rate, which can be reported via the OSS scheme.

Withholding Tax

Dividends0.0%

Royalties10.0%

Interest0.0%

Cyprus generally does not levy withholding tax on outbound dividends and interest to non-residents. Royalties for rights used within Cyprus are subject to a 10% withholding tax, which may be reduced by tax treaties. Penalties apply for payments to EU blacklisted or low-tax jurisdictions.

Payroll & Social Security

Employer15.4%

Employee11.5%

For 2026, the total employer contribution is approximately 15.4% (including 8.8% Social Insurance, 2.9% GESY, and other funds). Employees contribute 11.45% (8.8% Social Insurance and 2.65% GESY). Contributions are capped at an annual salary of €68,904 for Social Insurance.

Other Taxes

Special Defence Contribution (SDC)

Imposed on dividend, interest, and rental income of Cyprus tax-resident and domiciled individuals. The 2026 reform reduced the SDC on actual dividends from 17% to 5% and abolished the deemed dividend distribution rule.

General Healthcare System (GESY)

A mandatory healthcare contribution levied on various types of income, capped at €180,000 annually. Rates include 2.65% for employees, 2.90% for employers, and 2.65% on passive income like dividends and rent.

Incentives & Support

Approved Charity Tax Exemption

Official recognition by the Ministry of Finance grants full exemption from corporate income tax, capital gains tax, and immovable property tax.

0% corporate tax on surplus income, 0% capital gains tax on property disposal, and donations received are tax-deductible for the donors.

Eligibility: Must be a non-profit entity (like a CLG) operating exclusively for charitable, educational, or public benefit purposes, and formally approved by the Cyprus Tax Department.

Formation Requirements

Minimum Capital

No requirement

No statutory minimum share capital. Members guarantee a nominal amount, typically €10 to €100, payable only if the company is wound up.

Local Director

Not Required

While not legally required, appointing a local director is highly recommended to establish tax residency in Cyprus and facilitate local bank account opening.

Registered Office

Required

Virtual office allowed. $350 - $600 per year

Notarization Required

Yes

Power of Attorney (Remote)

Required

Required if the founders are incorporating remotely through a local lawyer or corporate service provider. Must be apostilled.

Timeline

Standard: 5-10 business days days

Expedited: 1-3 business days days ($110)

Required Documents

1Certified Passport CopyApostille needed
2Proof of Residential Address (Utility Bill)
3Bank Reference Letter
4Memorandum and Articles of Association
5Signed HE1 Form (Statutory Declaration by Lawyer)

Compliance & Reporting

Annual Filings

Annual Return (HE32) & Audited Financial Statements

Penalty: €50 flat fee plus €1 per day of delay, capped at €150.

Within 28 days of the AGM (effectively March 31 of the second year following the financial year)

Corporate Tax Return (TD4)

Penalty: €100 fixed penalty plus accrued interest on unpaid taxes.

January 31 of the second year following the tax year (updated for 2026)

Audit Requirement

Required

All Cyprus companies, including Companies Limited by Guarantee, must submit audited financial statements regardless of turnover or size.

Accounting Standard

IFRS

Tax Return Deadline

January 31 of the second year following the tax year (e.g., 2026 returns due Jan 31, 2028).

VAT Filing Frequency

Quarterly

Data Protection

Must comply with the EU General Data Protection Regulation (GDPR). A Data Protection Officer (DPO) may be required depending on the scale of data processed.

Banking & Payments

Bank of Cyprus

The largest bank in Cyprus, offering comprehensive corporate services but requiring strict KYC and usually an in-person visit.

Hellenic Bank

A major traditional bank with a strong local presence, suitable for established non-profits needing full banking facilities.

AstroBank

Known for being slightly more flexible with foreign directors and offering a pragmatic approach to initial account opening.

Revolut Business

Remote-friendly

A popular EMI offering fast, fully remote account opening with multi-currency support, ideal for day-to-day international operations.

Wise Business

Remote-friendly

Excellent for low-cost international transfers and holding multiple currencies, though acceptance of non-profits depends on the specific charitable activities.

Payment Gateways

Stripe, PayPal, JCC Payment Systems, Braintree, Square

Currency

EUR

Multi-Currency: Supported

Account Opening

Opening a bank account for a non-profit in Cyprus can be challenging and time-consuming due to strict AML/KYC regulations. Traditional banks require extensive documentation regarding the source of funds and the organization's objectives, often necessitating an in-person visit or a local representative.

Practical Information

Timezone

UTC+2 (UTC+3 during DST)

Business Language

Greek and English

Legal System

Common Law

Ease of Doing Business

#54

IP Protection

Cyprus offers robust IP protection aligned with EU directives and international treaties like WIPO. The Cyprus IP Box regime also provides significant tax exemptions on qualifying intellectual property income.

Double Tax Treaties

68 countries

Notable treaties: United Kingdom, United States, Germany, United Arab Emirates, India, Netherlands

Visa & Residency Options

Cyprus Startup Visa

A 1-year renewable permit for non-EU founders establishing an innovative startup. Requires a solid business plan and a minimum of €50,000 in personal funds, offering a path to permanent residency after 5 years.

Cyprus Permanent Residency by Investment (Golden Visa)

Grants immediate permanent residency to non-EU investors who purchase real estate or company shares worth at least €300,000 and demonstrate an annual foreign income of €50,000.