The island’s coherent legal system, high standard of professional services and the tax advantages that companies enjoy, make it one of the most financially attractive places to register a company.
After the accession of Cyprus into the European Union on 1 May 2004, new legislation has been enacted to enable the alignment of International Business Companies with local companies and the two categories are now treated almost identically. With the new legislation Cyprus has enhanced its role as the ideal location for investments to and from Russia, Central and Eastern Europe, and other parts of the EU. It has the lowest tax regime in the EU and there are various tax exemptions that greatly benefit companies.
The island has signed a number of double tax treaties that offer the opportunity for international tax planning. The treaties aim to avoid double taxation of income earned in countries other than Cyprus. The general effect of these treaties is that Cyprus-registered offshore entities that have tax exemptions in Cyprus will have the same exemptions in the treaty countries. Countries that have double-tax treaties with Cyprus are, amongst others, Austria, Belgium, Bulgaria, Canada, China, Czech Republic, Egypt, Fed. Rep. of Germany, France, Greece, Hungary, India, Ireland, Italy, Mauritius, Poland, Romania, Russia, Slovakia, Sweden, Syria, United States, United Kingdom and Yugoslavia (Serbia and Montenegro).
Other advantages include the following:
- Cyprus is a member of the European Union
- favourable tax regime regarding corporation tax
- simplified administrative procedures
- low set up and operating costs
- freedom of movement of foreign currency
- free market economy
- availability of freezone area
- efficient legal, banking and accounting services
- excellent telecommunications.
Tax incentives:
- A uniform corporate tax rate of 10%
- Dividend income is exempt from tax provided certain conditions are satisfied. When it does not apply 15% defence tax is payable but credit for foreign tax suffered is given irrespective of the existence of a treaty.
- Interest income is 50% exempt from corporate tax. If it is received in the ordinary course of business it is taxed like normal trade income.
- Profit from the disposal of securities is exempt from tax in Cyprus.
- Profits of a permanent establishment maintained abroad are exempt from Cyprus tax.
- There is no withholding tax on dividends paid to non-resident shareholders.
- There is no withholding tax on the payment of royalties derived from outside Cyprus.
- There is no withholding tax on interest payments made abroad.
Types of Companies,
- Company registered under the Companies Law: Company limited by shares, Company limited by guarantee, unlimited company
- Groups of companies
- Partnership established under the Partnerships Law
- Branch of an overseas company registered in any foreign country
For the registration of a company, the following particulars should be provided:
- Name of the company – approval of the proposed name
- Share capital expressed in Euro
- Shareholders: name, nationality, address, profession, passport copy, number of shares to be taken up. Shareholders who wish to remain anonymous may appoint nominees to act for them as shareholders. The actual and beneficial ownership remains with the anonymous shareholder.
- Directors: min. one director should be appointed – full name, nationality, address, profession and copy of passport. Residency of director/s is an important factor in determining the residency of the company.
- Secretary : full name, nationality, address, profession and copy of passport.
- Registered office : in Cyprus.
- Main objects : main activities that the Company will be carrying on and a general main business description.
- Company’s Memorandum and Articles of Association
Procedure,
Drafting, preparation and submission of the relevant documents to the Registrar of Companies. After the registration full sets of registration documents can be received from our law office or sent via courrier. The registration procedure can take an approximate period of 10 to 40 working days from the date upon which full instructions will be received.
It is possible to buy ‘ready-made ‘shelf’ companies. This may save time but will be more costly if substantial alterations are to be made to the memorandum and articles of association.
The package includes the following,
- The registration of your private limited company within 40 working days
- Company name availability, conformation and reservation
- Payment of initiation fees
- Payment of the first year’s registration fees
- Appointment of your own candidate to the positions of director, secretary and shareholders
- Registration of your authorised share capital
- Drafting, preparation and submission of the Memorandum and Articles of Association of your company
- A local registered office address and a local registered agent
- The first year’s fee for a registered office address and registered agent.
- Full registration documents will be sent to you via courier.
For any inquiries or if you demand a specialised advice please contact us directly by email at margarita@papantoniou-law.com or by phone on +357 22 767636.
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Company/Coprporate law