Head of Corporate & Administration
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Cyprus, a Member State of the European Union since 2004 has developed into an ideal hub, swiftly becoming the international destination of choice for doing business.
This small but dynamic country has a long established reputation as a 'centre of excellence' for international business activities and retains unique clusters of expertise and service capability to support key growth sectors of the economy.
Cyprus offers possibly the most attractive tax system in Europe paid at a rate of 12.5% as well as one of the most appealing and simple systems in the world. The country provides an effective and transparent tax regime that is fully compliant with EU laws and regulations. In addition, the Organisation for Economic Cooperation and Development (OECD) includes Cyprus on its 'white list' as one of the 45 countries that have introduced and implemented the highest of internationally agreed standards on harmful tax practices.
Cyprus is a diversified, open-market economy, with a highly-educated workforce and a commitment to facilitate business in a cost-effective manner. Moreover, it offers ease of doing business in an investor friendly environment, which is connected to an efficient business infrastructure and a rich and sophisticated business culture, while pristine beaches and enviable weather perfectly blend a superb quality of life with maximum business benefits.
The island, which is famous for its warm, hospitable and welcoming people, has transformed itself into one of the most attractive foreign direct investments (FDI) destinations in the region where, among other advantages, market access to more than 500 million EU citizens is readily available.
The Cyprus Company
The Cyprus Company can provide a tax-efficient way to initiate international business. A Cyprus Company is taxed as described below and if correctly structured, can be designed to take advantage of the extensive tax treaty network signed by Cyprus.
Taxation - All companies that are tax residents of Cyprus are taxed at a rate of 12.5% on their income accrued or derived from all sources in Cyprus and abroad. A non-Cyprus tax resident company is taxed on income accrued or derived from a business activity which is carried out through a permanent establishment in Cyprus and on certain income arising from sources in Cyprus. Corporation tax is imposed on business profits, interest, discounts, rents, royalties, remunerations or other profits from property and net consideration in respect of trade goodwill (exemptions and deductions apply). Dividends to non-tax residents are tax exempted.
Shareholders - A minimum of 1 shareholder is required (no restriction on the nationality or residency). Shareholders may be corporate or individual. Details of the shareholders appear on public file, however licensed trust companies are permitted to hold shares on a fiduciary basis.The liability of the shareholders of a Cyprus Limited Liability Company is limited up to the unpaid amount of the shares they hold. There is no minimum capital requirements for a Cyprus Private Limited Liability Company.
Directors - A minimum of one Director is required, either corporate or individual, and details appear on the public file in Cyprus. There is no restriction on the nationality or residency of the directors. Please note that for tax residency purposes it is advisable for the majority of the board of directors to consist of Cyprus tax residents.
Annual Reporting - Companies must file an annual return, maintaining accounting records and must also prepare audited accounts.
Timeframe - Normally it will take approximately 1 week to incorporate a Cyprus Company after compliance procedures have been satisfied.
Restriction on Name and Activity - Names must end with the word “Limited”. There are few restrictions on the words which may be included within a company name but those indicating a connection with the banking or insurance industries can only be used when an appropriate license has been obtained.
Local Requirements - As a matter of Cyprus company law every Cyprus Company MUST maintain a registered office address in Cyprus and must also appoint a company secretary. If a licensed sservice provider is handling all the corporate work, it becomes legally liable for actions of the Cyprus company, so will naturally insist on being involved fairly closely in all business operations.
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Diclaimer: The above is intented to provide a brief guide only. It is essential that appropriate professional advice is obtained. XpertAdvice will be glad to assist you in this respect. Please do not hesitate to contact us.