Entrepreneurs who intend to open an insurance company in Cyprus should be aware that such a business here requires a license to activate in this sector, under the articles 8 and 22 of the Insurance Law. Our lawyers in Cyprus can provide more details on the schemes available for foreign insurance companies which activate in this country.
Criteria for obtaining an insurance license in Cyprus
Local companies which intend to operate in the insurance business in Cyprus have to submit an application for a license on the prescribed form EA1, together with:
- A fee of CYP 3,000 (around EUR 5,170) for general insurance activities or CYP 5,000 (around EUR 8,620) for life insurance activities;
- The memorandum and the articles of association certified by the Companies Registrar;
- The initial balance sheet in its correct form, which confirms by the auditors of the company the minimum guarantee fund availability, as well as the share capital;
- A three-year business plan which outlines the risk nature, the guiding principles about reinsurance, the assets constituting the minimum guarantee fund and other information. Our Cypriot lawyers can provide thorough information on this issue;
- A written declaration of the date which was chosen for the accounting reference date;
- Details on all the directors, as well as academic qualifications, experience, which have to be completed by certificates related to each person proving that he or she has no criminal record and has never been bankrupt;
- Other documents: our attorneys in Cyprus can provide more details on what these other documents consist of.
Taxation for insurance companies in Cyprus
Companies which are located in Cyprus and activate in the insurance sector are subject to taxes. The income taxation in this country is 10%, being one of the lowest in the EU.
Furthermore, the Income Tax Law provides significant benefits for insurance companies in Cyprus, like:
- Dividends received by a resident business from another resident company are not taxed;
- Profits from security disposals are not subject to taxation;
- If the resident company owns at least 1% of the share capital of a foreign business, all dividends which are gained are not subject to taxation, except certain cases. Our lawyers in Cyprus can offer all the necessary information on what these cases can be.
If you would like to know more about the insurance business in Cyprus, or for assistance in setting up such a company in this country, please contact our Cypriot law firm.