Cyprus is an island situated in the north eastern Mediterranean Sea at the crossroads of Europe, Asia and Africa. The capital city is Nicosia, which has a population of about 200,000 people. Cyprus gained independence from Britain in 1960 and adopted a presidential system of Government with elections for the President taking place every 5 years. In 1974 Turkey invaded Cyprus and has since occupied the northern 40% of the island. There are ongoing and longstanding negotiations to reunify the island. The official languages are Greek and Turkish but English is widely spoken and is the language mostly used in business, government and the courts. Laws are based on the English legal system and company law is modelled on the UK Companies Act 1948. Cyprus has been a full member of the European Union since 2004 and adopted
\nthe euro as its currency in 2008. Communications are excellent.<\/p>\n
A Cyprus company is defined as a limited liability company incorporated in the Republic of Cyprus. Cyprus companies have the following characteristics:<\/p>\n
The main features of the Cyprus tax regime are as follows:
\n\u2022 A uniform corporate tax rate of 12.5% is applied to all companies.
\n\u2022 Dividend income is exempt from tax in Cyprus. It is also exempt from the special defence contribution of 20% provided that the company paying the dividend either engages directly or indirectly in activities that give rise to more than 50% non-investment income or the burden on the dividend paying company\u2019s income is not lower than 5% irrespective of its source, provided certain conditions are satisfied. Credit for foreign tax suffered is given irrespective of the existence of a treaty.
\n\u2022 Dividend income is exempt from tax in Cyprus.
\n\u2022 It is also is exempt from the special defence contribution of 20% provided that the company paying the dividend either engages directly or indirectly in activities that give rise to more than 50% non-investment income or the burden on the dividend paying company\u2019s income is not lower than 5% irrespective of its source, provided certain conditions are satisfied. Credit for foreign tax suffered is given irrespective of the existence of a treaty.
\n\u2022 Interest income is exempt from corporate tax, unless it is received in the ordinary course of business in which case it is taxed like normal trade income. A special defence contribution of 30% is payable by tax residents but credit is given for foreign tax suffered irrespective of the existence of a treaty.
\n\u2022 Profit from the disposal of securities is exempt from tax in Cyprus.
\n\u2022 Profits of a permanent establishment maintained abroad by a Cyprus company are exempt from tax in Cyprus subject to certain conditions.
\n\u2022 There is no withholding tax on dividends paid to non-resident shareholders.
\n\u2022 There is no withholding tax on interest payments made abroad.
\n\u2022 There is no withholding tax on the payment of royalties derived from outside Cyprus.
\n\u2022 Various reliefs are introduced on company reorganisations.
\n\u2022 Group relief is introduced.
\n\u2022 Losses can be carried forward 5 years from 1\/1\/2013.
\nThe above benefits, coupled with the fact that Cyprus has an extensive tax treaty network with more than 50 countries, provide an environment in which very advantageous tax structures can be put in place using a Cyprus company.<\/p>\n
A minimum of one shareholder is required and details appear on the public file but anonymity can be
\nretained by the use of nominee shareholders. Bearer shares are not permitted.<\/p>\n
A minimum of one director is required and details appear on the public file but anonymity can be retained
\nby the use of third party directors. There is no legal requirement that the directors be Cyprus resident but in
\norder to obtain relief under the taxation treaties signed by Cyprus it is likely that the company would need
\nto be seen to be Cyprus resident and therefore have a majority of the directors based in Cyprus.<\/p>\n
Companies need to comply with the following filings annually:
\n1. Submission of the company annual return to the Registrar of Companies
\n2. Submission of audited financial statements in Greek to the Registrar of Companies
\n3. Submission of an annual company income declaration to the Income Tax Authorities
\n4. Submission of provision tax returns on 31st July in the tax year and final tax returns on 31st December of
\nthe year following the end of the tax year to the Income Tax Authorities<\/p>\n
Normally it will take approximately 5 working days from the receipt of due diligence documentation on
\nthe beneficial owners for incorporation to be achieved. In special circumstances an accelerated process is
\navailable which would allow incorporation in 2-3 working days after receipt of those references. Ready
\nmade companies, whilst not generally available, can be provided on request.<\/p>\n
As a matter of local company law the company MUST maintain a registered office address within Cyprus
\nand must also appoint a company secretary who, for practical reasons, must be resident in Cyprus. We
\nwould normally provide these services as part of our domiciliary service fee.<\/p>\n","protected":false},"excerpt":{"rendered":"
Synopsis Cyprus is an island situated in the north eastern Mediterranean Sea at the crossroads of Europe, Asia and Africa. The capital city is Nicosia, which [\u2026]<\/span><\/p>\n","protected":false},"author":9,"featured_media":0,"parent":3329,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_exactmetrics_skip_tracking":false,"footnotes":""},"class_list":["post-3539","page","type-page","status-publish","hentry"],"yoast_head":"\n