Question:
Our company, originally founded in Vietnam, is currently in the process of setting up a new company in Cyprus. To achieve this, what do we need to adhere to specific procedures.
Answer:
When establishing a company in Cyprus, the following steps need to be taken:
Firstly, registering foreign investment at the Ministry of Planning and Investment according to Vietnamese law.
- The procedure for registering outward investment must be completed before establishing a company abroad and must be approved by the Ministry of Planning and Investment in Vietnam (Article 61 of the Law on Investment 2020).
- The Ministry of Planning and Investment issues an Outward Investment Registration Certificate within 15 days from the date of receiving a valid application dossier (Article 61 of the Law on Investment 2020).
- In cases where a company make outward investment without obtaining the Outward Investment Registration Certificate, it may result in administrative penalties ranging from VND 100,000,000 to VND 200,000,000 (Article 3 of Decree 122/2021/ND-CP).
Secondly, establishing a company in Cyprus
- Regarding the legal structure: In Cyprus, the most common business form for foreign investors is a private limited company. This structure allows limited liability for shareholders and is subject to a corporate tax rate of 12.5%, one of the lowest in the EU.
- Capital ownership rights: There are no restrictions on ownership rights for foreign investors in Cyprus companies.
- Minimum capital requirement: There is no minimum capital requirement for LLCs in Cyprus.
Thirdly, registering the transfer of funds abroad at the State Bank of Vietnam: Transferring funds from Vietnam to the company in Cyprus to support its business activities and operations must be registered in advance with the State Bank of Vietnam (clause 2 Article 14 of the Ordinance on Foreign exchange control).
