Corporate Structuring
Economic Substance
Management and control, governance and the evidence file that supports tax residency.
What we do
We build the governance the management and control test looks at, and we keep the record of it. A resident board with real authority, a meeting calendar, papers before each meeting and minutes after it, sized to what the company actually does.
Cyprus does not treat incorporation as residency. It asks where the company is managed and controlled, and that is answered by conduct rather than by documents asserting it. Treaty access, the participation exemption and the intellectual property regime all rest on the answer, which is why it is worth building properly at the start and inexpensive to keep right afterwards.
What you get
- An assessment against your company's actual activity, value and risk, so the level is proportionate rather than copied from another company
- Cyprus resident directors with genuine authority over the decisions that belong to a board
- A board calendar, with agenda papers circulated in advance and minutes recording what was considered
- A business correspondence address, and dedicated premises where the activity warrants them
- Banking arrangements with Cyprus resident signatories and defined authority limits
- Payroll and employment arrangements where the company needs people here
- Contracts reviewed so agreements are approved in Cyprus rather than ratified here after the fact
- The evidence file built as events happen: minutes, resolutions, correspondence and supporting records
- Tax residency certificate applications, and a review each year as the business changes
How it works
There is no headcount threshold and no universal checklist, which is why the useful question is not how much substance is enough but which functions produce the income. Who negotiates the contracts, who sets pricing, who directs development, who accepts the commercial risk, who authorises payments. Where most of those answers currently sit outside Cyprus, the work is to move the functions rather than to add people around them, and establishing that early is what keeps the cost proportionate.
A passive holding company and an operating software business face different expectations. Applying one company's arrangement to the other produces either wasted cost or an exposed position.
The record is the deliverable. Minutes written at the time, recording what was considered and on what information, carry weight years later. A file assembled after the question arrives is visibly that.
Working with us
Four steps, and the first one is a conversation
A call
What the company does, where its decisions are taken today, and which reliefs the structure depends on. No charge for it.
A proposal in writing
Fixed fees, not estimates, scoped to the level your activity actually calls for, with the reasoning for it.
You accept
Engagement letter signed, then onboarding. Neither takes long.
The board starts working
Directors appointed, the first meetings held and minuted, and the calendar set for the year, so the record begins now rather than being reconstructed later.
Common questions
How many employees do we need?
None, as a matter of law. There is no statutory headcount in the management and control test. What matters is proportion: a company earning materially from Cyprus arrangements needs decisions genuinely taken here, people whose work explains the income, and premises consistent with both. For many holding structures that is a working board and nothing more.
Do the directors have to live in Cyprus?
A majority resident here is the usual arrangement, and residence is evidence rather than the test itself. A resident board that meets, considers and minutes supports the position. One that receives documents for signature contributes very little, and the difference shows in the records.
What does the evidence file contain?
Board papers circulated before meetings, minutes recording what was considered rather than only what was resolved, the address arrangements, employment records where there are people, and the decisions themselves in a form that shows where they were taken.
Who ever looks at this?
A tax authority in the country a founder came from, a bank during periodic review, a buyer's advisers during diligence, or the Cyprus Tax Department when a residency certificate is applied for. None of them give notice, which is the argument for having the record already.
We already have a company. Can this be fixed?
From the next board cycle, yes, and that is usually all it takes. The record exists for a period or it does not, so the sooner the cycle starts the shorter the gap behind it. Most companies we take on start from exactly here.
What follows
Substance runs on the same annual rhythm as everything else the company does. Corporate administration carries the statutory calendar around it and accounting and tax compliance the accounts and returns.
Where the founder is the person actually making the decisions, relocating the founder resolves the question more completely than any arrangement built around their absence.
| Test applied | Management and control exercised in Cyprus |
|---|---|
| Statutory minimum headcount | None. Substance is proportionate to the activity |
| Primary evidence | Board composition, meetings held in Cyprus, minutes, contracts, banking authority |
| What scales the requirement | Activity, value carried, risk, jurisdictions dealt with, relief claimed |
| When it is examined | Residency certificate applications, filings, bank reviews, foreign authority requests |
| Consequence of failure | Residency, treaty relief, participation exemption and IP Box lost together |
Also in Corporate Structuring
- Cyprus Company FormationExpedited incorporation with every mandatory registration, and the Registrar and government fees included in one fee.
- Cyprus Holding CompanyHolding structures using the participation exemption and Cyprus treaty network.
- Company RedomiciliationTransfer of an existing foreign company into Cyprus without breaking legal continuity.
- International Tax PlanningCross-border structuring against ATAD, Pillar Two and treaty tie-breaker rules.
Find out whether Cyprus fits your plans
It starts with three questions: where your revenue comes from, what you own, and where you are tax resident. From there, the conversation is about what you are building and where you want to take it. After the call, you receive a written proposal covering the recommended structure, the implementation roadmap, and a fixed fee quote.