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July, 23 2018
July, 17 2018
Why register a Cyprus company. By: Chambersfield Economides Kranos
Cyprus is a country island situated in the Eastern Mediterranean area, at the heart of three continents; Europe, Africa and Asia thus rendering it a favourable choice.
It is a full member of the European Community and completely aligned with the EU regulations. Its currency is Euro and the official language is Greek while English is spoken by almost everyone and Russian by a significant percentage of the population.
In addition, Cyprus has one of the lowest crime rates in the world. It has an excellent transportation structure and infrastructure that support the entire spectrum of business activities which take place on the island. It has a trustworthy and advanced private banking and medical system. Cypriot people are well mannered and are famous for their hospitality.
The Legal System of Cyprus is based on Common Law. Its economy operates based upon an open, market driven principle, with favorable tax regimes for the incorporation of companies and investments. Moreover, Cyprus is characterized by a high per capita income and renowned as a European Union centre for foreign investments, offshore businesses and activities.
Also, it is important to note that the Government authorities of Cyprus are promoting heavily the incorporation and foreign investments, as well as, allowing the purchase / ownership of property under favorable conditions.
Consequently, Cyprus Government authorities engage in non – stop negotiations for forming double taxation treaties with non European countries, in order for the Cypriot active companies to enjoy an important competitive advantage. Currently, Cyprus is an affiliate to more than 50 double taxation treaties based on the OECD including the EU, China, India, Kuwait, Russia, Singapore, Thailand, USA, Azerbaijan, Lebanon, UAE, Georgia and other important hub countries.
Furthermore, other important advantages of Cyprus are the low corporation tax rate, the very short time frame for company registration, as well as, the low annual maintenance fees of corporations. Cyprus offers one of the lowest corporation tax rates in the EU, which is 12.5%. The time frame for the registration of a new company is very short, approximately 7-9 days.
Hence, Cyprus allows the use of nominee Directors, Secretary and Shareholders therefore there is no obligation of exposure of the Ultimate Beneficial Owner (UBO) in the public Company Registrar Record. Anonymity rights are fully safeguarded and there is no need for the owner to be present during the process of the incorporation or opening of a corporate bank account. Bank accounts can open between 2 – 5 working days with full online electronic banking and digital pass as well as a debit card.
Cyprus is considered to be the most well-known EU country for offshore company formation and Trusts. The Cyprus International Trusts are exempted from income tax, capital gains tax, special contribution or any other taxes. Additionally, there is no estate duty or inheritance tax in Cyprus, there is flexibility for relocation, there is no exchange control regulation and trusts can operate internationally with no disposal tax of securities. Thus, there are no withholding taxes on dividend payments, interest or royalties to non residents (subject to conditions).
In addition, the profits from the sale of shares in the stock exchange are tax free, whereas, the losses of a company can be carried forward opposed to future profits for an indefinite period. Besides those very important advantages, Cyprus is also offering the Group relief option, whereby the loss of one company can be covered by the profits of another since both of them are under the Cyprus residential tax scheme.
Moreover, Cyprus Permanent Residence and Citizenship Schemes are considered to be one of the strongest in the world since they provide several significant benefits to the investors, as well as, an advantageous flexibility towards the investors that are reside in non EU member states, which includes, their family members under 18 years old as well.
To sum up, Cyprus tax law is characterized by its simplicity, straight forward approach and effectiveness. Subsequently, entrepreneurs should consider Cyprus as a favorable market for incorporation or re - domiciliation of their business activities, since their companies will enjoy instantly, among other important advantages, low corporate taxation rates and annual maintenance corporation costs.
In addition, entrepreneurs will have the option of forming an offshore company or a trust so as to protect their assets, companies’ strategies and personal information by enjoying a very beneficial taxation regime with no exchange control regulation that would limit international operation.
Justifiably, Cyprus is considered to be an EU Tax Heaven island country. Cyprus companies enjoy safety, stability and flexibility, as well as, overall low tax rates while having the opportunity to trade not only in the EU but in other countries by enjoying the advantages of over 50 double taxation treaties.
Cyprus is globally an ideal investment and incorporation gateway, offering to the investors a market right of entry to more than 500 million EU citizens, the Middle East and China.