The Advantages of a Cyprus Company
- Cyprus is a low tax country and not a tax heaven country
- Cyprus is not a black listed country
- Cyprus is an EU country enjoying a high degree of respect
- Flat 12,5% corporate income tax on net profits after deducting business expenses
- Capital allowances available
- Foreign employees working outside Cyprus do not pay income tax while at the same time receiving their salary through Cyprus
- No contributions to local security schemes are payable in respect of foreign employees
- Large network of double tax treaties
- No exchange control regulations
- Residence and work permits can easily be obtained for expatriate personnel and their dependents
- No withholding tax on dividends, royalties or interest paid to non residents
- Excellent banking services
- Common law system
- Easy accessibility by air or sea
- Strategic location
- Low professional costs
- Low costs for the set-up and the administration of companies
- Complete anonymity of shareholders
- Nominee services available
- English and Russian languages widely used
- Highly qualified professionals
Since 1st January 2003 a Cyprus incorporated company is considered as being Cyprus tax resident for tax purposes if management and control of the company is carried out in Cyprus.
Management and control means that all-important decisions for the running of the company are taken in or from Cyprus, the majority of the Board of Directors are Cyprus residents and all meetings of the board of Directors take place in Cyprus.
Companies incorporated after the 1.1.2003 have been subject to flat corporate income tax 10%.
As of 1.1.2013 Cyprus Parliament has increased corporate tax from 10% to 12,5%. No other changes on tax system affecting foreign investors have been implemented.
All Cyprus companies need to be audited annually and to submit financial and tax statements to the Inland Revenue and the Registrar of Cyprus Companies.
The audit must be carried out by a Cypriot firm of auditors in accordance with the International Accounting and Auditing Standards.
Work and Residence Permit
Expatriate personnel of companies and their dependants can obtain a temporary work and residence permit in Cyprus relatively easy.
The permit is renewable every five years provided that the terms are not violated in any way by the permit holder or by the company he/she works for.
Companies in Cyprus are not subject to any exchange control restrictions. Thus the companies are not restricted with regards to their bank accounts which may be held in any country and currency. Should the company wish to have a bank account in Cyprus. This may be operated freely with no necessity for prior approval.
The Registrar of Companies must approve the name of the company before the whole registration procedure commences. Any names that are similar to existing company names are not approved. Also, names with a ‘general meaning’ and names including works such as ‘Royal’, ‘King’, ‘Saint’, ‘Queen’, ‘Commonwealth’ are not accepted.
The time needed for the approval of the company’s name is usually 15 to 20days unless an ‘accelerate’ application is made where an approval is given within 5 days. Cyprus companies are compulsory to end with the word ‘Limited’ or ‘LTD’.
A list of approved names by the Registrar of Companies is available upon request by us in order for the registration of the company to commence immediately.
Under the Cyprus Companies Law Cap 113 companies must have minimum one share and at least one shareholder.
Whether a company has an office in Cyprus or not, a minimum share capital of EUR 1000 is required.
The share capital of the Company can be in EUROs or at any other currency and it may also be subdivided into denominations. The shares that may be issued can be either ‘ordinary’ or ‘preference’. ‘Preference shares’ are rarely used though.
The minimum number of ‘registered shareholders’ and ‘beneficial shareholders’ is one. In a Cyprus company, shareholders may be legal corporate entities or individuals. Trusts may also be shareholders in a Cyprus company.
For the benefit of beneficial shareholders, shares can be held by trustees in orders to preserve anonymity. The interest of the beneficial shareholders may be safeguarded by signing the Trust Deed. Our company can provide trustee services.
Shareholders appointing a nominee trustee can keep their identity confidential.
A bank reference is a requirement by our company for the beneficial shareholder of the company. Upon request, a sample of the bank reference is available. The bank references should ideally be obtained from the country in which the beneficial shareholder resides or carries out his/her business. Requirement of the passport of the beneficial shareholder and a proof of his/her address is also required.
The minimum number of directors required is one. The directors can be either Cypriot individuals or foreigners. For the purposes of the company being a Cyprus tax resident and therefore gaining all benefits of the Cyprus tax regime it is recommended to appoint local directors. A corporate entity can also act as director.
We can provide nominee director services.
It is necessary to appoint an individual or a secretarial company. Our company is regularly appointed to act as secretary.
The registered office of the company must be operating in Cyprus. The address of the registered office is the official address of the company where registers, statutory books and the seal of the company must be kept. Service of summons or writs is made at the company’s registered office. Our company’s office address is regularly used as the registered office of the client companies.
Absolute confidentiality and anonymity of the shareholders can be achieved with the use of trustee shareholders together with the appointment of nominee director(s).
Time needed for registration
A Cyprus company usually takes up to 1 month to be formed. However, an accelerated service is available at the Registrar of Companies whereby companies can be incorporated within 10-15 days, provided that the name of the company has been approved.
Shelf or ready-made companies are available at our company. Transfer of shares can be effected by application to the Registrar of Companies.