Company Formation
The tax legislation in Cyprus remains to the benefit of the investor. Cyprus Government and International Tax Planning Community aims for Cyprus to continue being a major international financial center.
Cyprus is likely to remain a great location for investment to and from Central and Eastern Europe.
Our practice provides full range of corporate services from start-up to completion of incorporation. We facilitate setting up new corporations; we help negotiate, draft and execute of shareholders’ agreements; we optimize accordingly the text of Articles of Association of companies, we administer the companies’ management and annual reporting, including capital increases, equity contribution, etc. In cases of conflict, we prepare and file claims and help reach a resolution either through negotiation or through litigation.
TYPES OF COMPANIES
An International Business company in Cyprus may perform a wide range of activities, the most common of which are itemized below.
Headquartered Companies
Cyprus offers great conditions for regional management and administrative centers of multinational companies with activities in the Middle East, North Africa and Eastern Europe, etc.
Trading Companies
There is a wide scope of activities for such companies in Cyprus, particularly related to trading activities in the region. This is confirmed by numerous trading companies registered in Cyprus, affiliated with international corporate groups. Such trading companies can be employed for implementing three-way trading transactions, and also as agency companies receiving commissions. The main advantage is that such a trading company will have a VAT number, so will be workable for export of goods and services from any country to any destination and also for transit trading activities.
Holding and Investment Companies
In view of the comparatively low withholding tax rates on interest or dividends, in accordance with the Cyprus bi-lateral treaties with other nations, a Cypriot company can be deployed very advantageously for deriving income while avoiding double-taxation with treaty member countries. Such IBC holding company can be registered as the corporate parent of a company (or companies) registered in other jurisdictions, as well as of Cyprus-registered IBC.
In view of the recent tax legislation, 10% – 12% uniform corporate tax rate, holding companies operating from Cyprus are now in a more beneficial position, as they enjoy the benefits of tax exemption, as well as of corporate tax benefits resulting from the recent tax legislation.
Service Companies
These are set up to provide various services, such as: marketing and sales promotion, consultancy, management and others.
Construction and Engineering Companies
Cyprus is an ideal jurisdiction for international construction and engineering companies — due to favorable tax treatment resulting from of the Cyprus bilateral tax treaties existing with other countries for avoidance of double taxation. Accordingly, foreign contractors or engineers do not pay tax in a partner-country — provided that a respective project does not exceed the duration specified in the applicable tax treaty.
Finance Companies
The Cyprus bilateral tax treaties with other countries are advantageous because it is possible to provide loans without being subjected to any withholding tax on interest income.
Royalty Companies
Due to the low withholding tax rates on royalty income, in most cases pursuant to bilateral tax treaties, establishing a royalty company in Cyprus can be a very attractive proposition.
Publishing Companies
Cyprus is becoming a regional publishing, printing and distribution jurisdiction of choice, mainly due to its low cost and high quality printing services, along with the available excellent telecommunications system. These advantages, along with the tax incentives offered, have led to the establishment in Cyprus of many offshore companies engaged in the printing and type-setting of books and periodicals for sale and distribution outside Cyprus.
Real Estate Companies
Such entities, established in Cyprus, can be used very advantageously for holding international investments in real estate properties, while capitalizing on Cyprus bilateral tax treaties with other nations. Particularly lucrative are investments in Sweden, Denmark, France, the UK and all Central and Eastern European countries.
Employment Companies
An IBC registered in Cyprus can be used to significantly mitigate the level of taxation to be paid by expatriates employed outside their home country.
Shipping Companies
The establishment of an open ship Registry, as well as other incentives provided by the government, signified and facilitated the development of Cyprus as a regional maritime centre.
Captive and General Insurance Companies
During the past decade Cyprus has evolved into a very attractive jurisdiction for registering offshore insurance and reinsurance companies operating internationally, and particularly in the Mediterranean region, as well as in Eastern Europe and the Middle Easte.
Per the tax incentives offered, along with special exemptions per Cyprus insurance legislation, compounded with swift registration procedure, low running costs and locally available expertise, Cyprus is a very convenient jurisdiction for establishing and operating an international insurance company.
Our firm provides various consultation services, including those associated with preparation of Shareholder Agreements and various other contracts, conflict resolution, litigation in Cyprus and abroad.
PROCEDURE FOR ESTABLISHING A COMPANY
Registration and maintenance of a Cyprus Company
An applications is to be submitted directly to the Department of Registrar of Companies and the Official Receiver. Our office will provide a full range of services for incorporation and annual maintenance of the Cyprus company, including the following:
- Fulfilling all the requirements of the Incorporation.
- Corporate Secretarial Services: maintenance of share registers, basic management and shareholder resolutions, amendments to Court register (KRS) data, AGM Resolutions, submission of financial statements and required year-end documentation.
- Fiduciary and Domiciliary Services: directorships, supervisory board appointments, nominee shareholding, trust services, provision of registered address and substance offices.
- Shelf Companies: availability of operational and newly established companies, including tax registration, statistical office registration and operating bank accounts.
- Accounting and Payroll Services: maintenance of accounting records, preparation and submission of monthly and annual tax returns, communication with the Tax Office, Statistical Office or National Bank of Cyprus, monthly management reports, preparation of financial statements under IFRS, as well as HR and social security services.
- Liquidation Services: full accounting and corporate secretarial support in facilitating the company liquidation process, notification to the Court and to the public, maintenance of accounting records, preparation of the required financial statements, and all the further required closing procedures.
- Virtual Office Services – designated telephone lines, fax numbers, mail forwarding, internet and email services.
Confidentiality
Absolute secrecy can be maintained through Trust Fiduciary Agreements, through nominee ownership. Confidentiality is safeguarded by the Advocates Law, which prohibits a legal counselor to disclose any sensitive information about a client.