Offshore Business

Cyprus is a country attractive for investments because of the liberal tax system. This island country is one of the pillars of offshore business in Europe. The beginnings of the establishment of preferential conditions for business has started in 2004, when the government abolished the limitation on Cyprus, among others, the contribution of the investment, which grew in the way foreign companies. Today Cyprus is a thriving country that can boast economic growth, stable coin, or low taxes. Since 2004, Cyprus has been  also a member of the European Union. Friendly jurisdiction of that State favors opening up here holding companies.

Benefits

1.) The lowest tax regime in Europe
2.) Cyprus has 32 Double Tax Treaty agreements which apply to 40 countries and which can be exploited to minimize tax
3.) Allow nominee shareholder and director structure – beneficiary owner’s identity can be hidden from public company record
4.) A fully member of EU (since 01st of May 2004)
5.) Well adopted British legal system as background
6.) Stable economy
7.) Excellent banking facilities

Types of Company

Cyprus Sole Proprietorship

The main characteristic of a sole proprietorship in Cyprus is that the company is run by a single member with full liability. It is a simple and informal type of business, but still has to register with the Registrar of Partnerships.

Cyprus Private Company Limited by Shares (LTD)

This type of company is the most popular in Cyprus. There is no minimum share capital required. It is necessary that one to 50 shareholders set up a LTD in Cyprus. They subscribe nontransferable shares and are liable to the company’s obligations only to the extent of their contribution. A private company which is entirely owned by foreign investors is also known as an offshore company or an International Business Company.

Cyprus Public Company Limited by Shares (PLC)

A Public Company Limited by Shares in Cyprus is quite similar to a private company limited by shares.  However, the difference is that the shares are freely transferable and there can be as many shareholders as wished. The incorporation of a public company limited by shares requires at least 15,000 CYP as an initial capital.

Division / Holding

Cyprus offers a friendly tax rules for holding companies -no withholding tax on income from dividends received from subsidiaries received abroad

Requirements
To register  a company you need to provide the following documents:

  • Application form (HE1)
  • The form regarding the address of a company (HE2)
  • Details of secretary and directors of the company (HE3)
  • The agreement and the status of the company,
  • Registration fee,
  • approx. time to register a company – 1 month

Taxation

An individual

  • Dependent on the size of the income,
  • Tax-free allowance 19 500 €
  • tax thresholds

Legal person

  • Legal persons resident in Cyprus are subject to unlimited liability to tax
  • Company – non-residents are taxed in respect of income earned in Cyprus,
  • CIT rate is 12.5%
  • Dividend income received in Cyprus is exempt from tax exempt

Legal regulations

Creating a Cyprus company is governed by the the act of Companies House Law (1951), which is a copy of the English Companies Code from 1948.

Cyprus signed an agreement on the exchange of tax information with: Armenia, Austria, Belarus, Belgium, Bulgaria, Canada, China, Czech Republic, Denmark, Egypt, Finland, Estonia, France, Germany, Greece, Hungary, India, Ireland, Italy, Kuwait, Lebanon , Lithuania, Malta, Mauritius, Moldova, Montenegro, Norway, Polish, Qatar, Romania, Russia ,, San Marino, Serbia, Seychelles, Singapore, Slovakia, Slovenia, South Africa, Spain, Sweden, Syria, Tajikistan, Thailand, Turkmenistan, Ukraine , UAE, UK, USA.

Cyprus signed an agreement on avoidance of double taxation with Austria, Bulgaria, Belarus, Belgium, Canada, China, Czech Republic, Denmark, Egypt, France, Germany, Greece, Hungary, India, Ireland, Italy, Kuwait, Malta, Mauritius, Norway, Polish , Romania, Russia, Singapore, Slovakia, Slovenia, South Africa, Sweden, Syria, Thailand, UK, USA, with the countries of the former Yugoslavia, Azerbaijan, Armenia, Kyrgyzstan, Moldova, Uzbekistan and Ukraine.

Accounting and Auditing

  • Limited liability companies are required to prepare annual financial statements and subject them to examination by the auditor
  • Capital companies are subject to the submission of annual statements to the Registrar of Companies and the annual audited by the auditors transmission of annual reports to the relevant department of the Ministry of Finance (Department of Inland Revenue)

Bank accounts and banking

In order to maintain the confidentiality, the best solution is to appoint the nominal director / shareholder.

The list of banks:

  • Bank of Cyprus
Company registration form