Cyprus company
Cyprus is not a classical "straight" tax haven, like the classic offshore jurisdictions, such as Bahamas, BVI, and many others; rather it's a well-recognized tax-incentive country with a wide network of treaties for the avoidance of double taxation.
It found a very distinctive niche among Offshore Financial Centers.
Our clients' favorite applications for Cyprus International Business Companies (IBC's) are as follows:
- A powerful and respectful vehicle for withholding tax exempt investments, international holdings structuring, making entry into and gaining new markets. Nearly 40 double taxation treaties having been ratified by Cyprus may be efficiently used for the above purposes.
- Worldwide commerce, transit via the island's seaports.
- A headquarters' company for administration of multinational operations with a real office in Cyprus (special extra tax and customs duties exemptions apply). The expatriate officers would receive a residence permit and substantial personal tax/customs relieves.
- A shipping company (Cyprus is one of the top maritime nations: its merchant fleet ranks 6th in the world).
- A publishing business with its principal office in Cyprus. The IBC can have books, magazines, flyers, etc. cost-effectively printed in the country, distribute them abroad, and enjoy a favorable tax and customs treatment.
Suffice it to say, some of the above applications and/or features are just unique in the offshore world.
OUTSTANDING FEATURES:
Advantages
Low taxation - 10% tax of net profit (since 01.01.2003)
Has double tax treaties with the 33 countries. Hard constraint of confidentiality;
Has double tax treaties with the 33 countries. Hard constraint of confidentiality;
Disadvantages
Requirements:
-bank reference to real owner of the company;
-information about the shareholders: name, address, nationality, place of residence.
But this information is confidential.
-bank reference to real owner of the company;
-information about the shareholders: name, address, nationality, place of residence.
But this information is confidential.
Corporative legislation
Companies Act - 1968, modification of act - 1977, 1979, 1985, 1986, and 1990;
Type of the company
IBC;
Authorized business activities
All and any activities not prohibited by the law, except banking, insurance, reinsurance, financial services;
Prohibited activities
Can not trade with resident individuals or companies situated in Cyprus;
Taxation
This integration contains a uniform corporation tax rate of 10%, payable by local and international business companies alike starting from 1 January 2003. Active international business companies already operating from the island may retain the 4.25% rate until 2005 if their income in 2001 came entirely from sources outside Cyprus and continues to do so for the following four years.
The dividends paid to the Cyprian tax residents are subject to the taxation under the rate of 15 % basing on prospective distribution of 70 % from 90 % of the profit, which remain after paying the 10 % corporate tax. Dividends paid to foreign corporations and foreign individuals will be exempt from withholding tax;
The dividends paid to the Cyprian tax residents are subject to the taxation under the rate of 15 % basing on prospective distribution of 70 % from 90 % of the profit, which remain after paying the 10 % corporate tax. Dividends paid to foreign corporations and foreign individuals will be exempt from withholding tax;
Name of company
Name of the company must not be identical or confusingly similar to the existing ones;
The name must end on words Limited or Ltd;
The name must end on words Limited or Ltd;
Equity capital of the company
The minimum amount of declared equity capital makes
1000 CYP;
1000 CYP;
Recommended equity capital
5000 CYP, divided into 1000 shares par value 1 CYP;
Shares
Emission of registered shares with par value only;
Shareholders
- Minimum number
- Nominal shareholders
- Holders of trust equities
- Breakdown of shares when registering
- Minimum number
- Nominal shareholders
- Holders of trust equities
- Breakdown of shares when registering
One, natural or legal entity;
Permitted;
Permitted;
Minimum number two;
Permitted;
Permitted;
Minimum number two;
Does the law provide for non-disclosure of the information?
- About actual owner of the company
- About bank operations
- About actual owner of the company
- About bank operations
No;
Yes;
Directors
- minimum number
- nationality and citizenship
- status
- minimum number
- nationality and citizenship
- status
One natural or legal entity;
No requirements;
All the powers apart from those falling into the exclusive competence of members (determined by articles of association);
No requirements;
All the powers apart from those falling into the exclusive competence of members (determined by articles of association);
On the territory of Cyprus there has to be
- registered office
- registered agent
- local secretary
- registered office
- registered agent
- local secretary
Required;
Not required;
Required (one natural or legal entity);
Holding of the meeting of
-shareholders
-directors
-shareholders
-directors
Annual meeting required;
Not required;
Mandatory
- keeping of accounting records
- annual account
- presentation of auditors conclusion
- keeping of accounting records
- annual account
- presentation of auditors conclusion
Yes;
The company submits annual account to the Central Bank of Cyprus and declaration of profit to tax institutions;
Yes;
Information at disposal to the third party
Names and addresses of directors and shareholders, registration address, statute and memorandum, credit claim;
Documents held at registration office
Register of shareholders, directors and secretaries, credit claim;
Agreements on exemption from double taxation
All countries of CIS (except Georgia), Austria, Greece, Rumania, Bulgaria, Hungary, Canada, Ireland, Slovakia, Czech Republic, Italy, Sweden, Denmark, Kuwait, Great Britain, France, Norway, USA, Germany, Poland, lapsed Yugoslavia, China, Malta, Syria, Belgium, Egypt, Finland;
Currency control
No;
Term of incorporation
4 weeks;
Costs of registration of company
Look below
Financial year ending on:
In 60 days before the anniversary of incorporation/formation
Possibility to purchase a ready-made company
Yes
NOTE
- All financial statements data are kept in strict confidentiality by the Central Bank of Cyprus, and by Section 3 of the Central Bank Law 37, 1975 its employees are bound to secrecy.
- A Cypriot IBC is an effective tax planning vehicle when it is necessary to provide audited statements for some transactions and/or investments (i.e. tenders (bids), mergers and acquisitions, etc.)
Useful links: Central Bank of Cyprus
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Asset Protection s.r.o. is not a law firm and does not provide legal advices or legal services. We recommended to consult licensed professionals with regards to local tax and legal matters.
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