Cyprus is entering 2026 with a rising momentum in company formations, an upswing that reflects more than just a statistical anomaly. Throughout 2025, the Cyprus Registrar of Companies recorded an impressive 18,858 new company formations compared to 14,908 for the same period in 2024. 

Such a sudden increase of 26.5% year-on-year (YoY) can hardly be called a mere coincidence. Rather, it reflects more C-suite executives, international groups of companies, and high-net-worth individuals acknowledging the island’s increasingly attractive business ecosystem, which only improves through the years.

At the heart of Cyprus’s attractiveness lies its tax framework that remains competitive even after the latest reform. The corporate income tax has been raised from 12.5% to 15%, effective January 1, 2026; nevertheless, it remains one of the EU’s lowest rates.

Even so, the reform reduced several key business taxes, extended the R&D Super-Deduction, and abolished stamp duty on most transactions while keeping the IP Box regime, an extensive double-tax treaty network, and zero capital gains tax unchanged.

Equally important is that even after a major overhaul, Cyprus’s tax system remains largely predictable; in today’s EU landscape, where abrupt changes are increasingly the norm, the stability is itself a competitive advantage.

Yet, Cyprus’s appeal extends beyond taxation. Located at the intersection of Europe, the Middle East, and Africa, Cyprus is undoubtedly an ideal hub for operating across multiple regions from a single stable base.

The process of Cyprus company formation is also notably efficient, making the entrepreneurs’ journey smooth like butter. Over recent years, Cyprus has invested significantly in modernizing its company incorporation process, making it fully digital and thus cutting processing times and reducing administrative uncertainty to zero. In most cases, setting up a company in Cyprus can now be done in 7-14 business days, assuming the necessary documentation is prepared in advance.

As founders look for jurisdictions combining competitive taxation with quick incorporation, Cyprus is outpacing a number of other EU hubs where the company registration process is slow and administrative decision-making remains opaque.

The island’s fundamentals are extremely solid, especially when it comes to broader macroeconomic stability. Namely, the island currently has the lowest inflation rate in Europe and, for now, is the only European country with a negative inflation rate , which is exceptionally rare.

With strong political stability, excellent quality of life, and a business-friendly ecosystem, Cyprus stands out as a jurisdiction entrepreneurs choose as part of their long-term strategy instead of a short stop before relocating elsewhere.

The 2025 surge to open a business in Cyprus is, therefore, unlikely to lose steam in 2025 and beyond. What makes Cyprus de facto a cornerstone of where entrepreneurs plan to incorporate is not a single incentive but a combination of such – all drawing firms away from other developed centers.

Importantly, however, treating the company incorporation “boom” as purely domestic is nothing but reading only the headline. In practice, identifying the full range of factors fueling the surge is only possible by looking beyond the borders.

All over across once-leading European and Asian hubs, the environment has evolved into a far more restrictive regime. Firms started facing higher corporate taxes, growing compliance obligations, and rising operating costs, all pushing them to take a fresh look and reassess their presence in the HQ base.

In certain regions, tightening rules is not the only concern, as political uncertainty and abrupt policy shifts all complicate long-term planning and destroy entrepreneurs’ confidence.

In light of this, a meaningful migration trend has emerged, with companies actively relocating or restructuring while not simply chasing the lowest tax rate but a balanced ecosystem such as the one Cyprus provides. Subsequently, firms constantly migrate to jurisdictions that appear to be a safer long-term bet.

Finally, Cyprus’s track record of drawing private wealth to the island is hard to ignore. One of Cyprus’s most attractive incentives is its generous exemption of up to 17 years on dividends, interest, and most other passive income for foreign entrepreneurs and investors, making the jurisdiction truly a standout.

Relocation rules are also alluring, with Cyprus offering a standard 183-day residency rule and a more flexible 60-day alternative for those who can meet certain criteria. Alternatively, under Cyprus legislation, non-EU nationals can secure Cyprus residency through a modest real estate investment, effectively opening a door for the ultra-wealthy.

Taken together, these factors position Cyprus as an ideal destination for both company formation and obtaining an EU residence.

Yet, despite being relatively seamless to some degree, the process of registering or relocating a company to Cyprus is not without complexity. Structuring, tax planning, licensing where applicable, and ongoing compliance involve multiple complexities and are rarely straightforward without specialized guidance, especially when banks and regulators keep firms under the radar.

With this in mind, there is a strong demand for highly qualified legal advisors to assist with company formation and beyond among the future Cypriot business founders. Ideally, it is best to approach firms like Inteliumlaw with strong international structuring expertise and a local presence in the region. Such consultants are the top-priority choice for their “know-how” in Cyprus company incorporation, industry-specific licensing, and ongoing legal support that keeps compliance robust as the business scales to unprecedented levels.

As Cyprus company formations now record over 25% growth, the island is clearly no longer just “another” option on the shortlist of destinations to start a business. Instead, it has become a go-to destination for businesses seeking stability, stronger credibility, and a competitive advantage. For businesses looking to ride this momentum, seasoned legal support from the early stages is typically indispensable for lasting and compliant growth.