| Setup And Maintenance
Costs Incorporation
(Setup) Costs - US$3,800
The fee is all inclusive (company formation,
registered office, nominee director, secretary, shareholders, POA for one person
and courier delivery). No hidden costs. Annual
Maintenance Costs - US$1,700
The fee is payable after the first
year and covers registered office address, nominee secretary, director and shareholders.
No hidden costs. Our Cyprus
corporate kits are delivered with the following documents:-
- Certificate of
Incorporation
- Certificate of Directors and Secretary
- Certificate of
Shareholders
- Certificate of Registered office address
- Certified true
copy of the Memorandum and Articles of Association
- Blank instrument of share
transfer by the nominee shareholder
- Declaration of Trust by the nominee shareholder
-
Power of Attorney(s) to the beneficial shareholder
- Share certificate(s)
-
Company stamp
- Stationery (Letterheads and Invoices)
Company
Information
Type of Company for International
Trade and Investment Companies incorporated under the
Companies Law, Cap 113, as amended, who have obtained
Exchange Control permission from the Central Bank of
Cyprus to acquire IBC company status.
Procedure
to Incorporate
By submission of the Memorandum and Articles of Association
to the Registrar of Companies, together with an affidavit before a Court and the
appropriate registration fee. Restrictions
on Trading
Cannot undertake to the business of banking, insurance or the
rendering of financial services to the public unless special permission is granted.
Companies cannot trade with resident individuals or companies situated in Cyprus
other than in relation to the maintenance of premises, banking and professional
services, unless they have special permission from the Central Bank of Cyprus.
Powers of Company
The powers and objects of a Cyprus company are contained within the Memorandum
of Association and have to be specific. Language
and Legislation of Corporate Documents
English and Greek. Registered
Office Required
Yes, must be maintained in Cyprus. Shelf
Companies Available
Yes. Timescale
to Incorporate
Approximately 5 days, subject to name approval. Name
Restrictions
Any word that the Registrar considers undesirable. Any name
that is identical or similar to an existing company. Any name that implies illegal
activity or implies royal or government patronage, the following words or their
derivatives: asset management, asset manager, assurance, bank, banking, broker,
brokerage, capital, credit, currency, custodian, custody, dealer, dealing, deposit,
derivative, exchange, fiduciary, finance, financial, fund, future, insurance,
lending, loan, lender, option, pension, portfolio, reserves, savings, security,
stock, trust or trustees. Language
of Name
Names may be expressed in Greek or any language using the Latin
alphabet if the Registrar is in receipt of a Greek or English translation and
the name is not considered undesirable. Names
Requiring Consent or Licence
The following names or their derivatives:
bank, trust, building society, insurance, assurance, reinsurance, their foreign
language equivalents or any name that the Registrar considers may have a connection
with the aforementioned. Suffixes
to Denote Limited Liability
Limited or Ltd. Disclosure
of Beneficial Ownership to Government Authorities
Yes, only to the Central
Banks of Cyprus where strict confidentiality is legally protected.
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Compliance Authorised
and Issued Share Capital
The share capital must be expressed in Cyprus
pounds. The usual authorised share capital of a Cyprus IBC company is CYP 5,000
and the minimum issued and paid up capital is CYP 1,000. For companies wishing
to establish a physical presence in Cyprus, the minimum is CYP 10,000. Classes
of Shares Permitted
Registered shares of par value, preference shares,
redeemable shares and shares with no voting rights. Taxation
By virtue of special provisions in the Cyprus Income Tax Laws, the net chargeable
profits of Cyprus IBC Companies are taxed at a rate of 10%. Double
Taxation Agreements
Cyprus has concluded 33 double tax treaties with:
Austria, Bulgaria, Belarus, Belgium, Canada, China, the Czech Republic, Denmark,
Egypt, France, Germany, Greece, Hungary, India, Ireland, Italy, Kuwait, Malta,
Mauritius, Norway, Poland, Romania, Russia, (including most of the CIS countries,
i.e. Azerbaijan, Armenia, Kyrgyzstan, Moldova, Uzbekistan and Ukraine), Singapore,
Slovakia, Slovenia, South Africa, Sweden, Syria, Thailand, United Kingdom, USA
and the former Yugoslavia. Licence
Fees
Not applicable. Financial
Statement Requirments
Audited financial statements have to be submitted
to the Cyprus Taxation Authority and to the Central Bank of Cyprus annually. Directors
The minimum number of directors is One. They may be natural persons or bodies
corporate, be of any nationality and need not be resident in Cyprus. Company
Secretary
All Cypriot companies must appoint a company secretary, who
may be a natural person or body corporate. It is advisable to appoint a resident
company secretary. Shareholders
The minimum number of shareholders is One. Holding
Companies
Cyprus' a well established international centre, has been critically
assessed of constituting an attractive location for holding companies from a tax
perspective, among others. This is due to the accession of Cyprus to the European
Union (EU) and the enactment of the new Cyprus tax legislation, which is now compatible
with the acquis communautaire. Cyprus laws and practices are now harmonised with
the EU Laws and Directives, the Code of Conduct and the Organization for Economic
Cooperation and Development's recommendation on Harmful Tax Corporation. Tax
Regime
Unlike other countries in Europe, a Cyprus Holding Company must
only hold at least 1% of the share capital of a foreign subsidiary in order to
receive the tax benefits awarded by the new tax reform. New
Tax Legislation
A uniform 10% corporate tax rate, applicable to the worldwide
income, is now levied on all resident companies from the 1st of January, 2003.
This is the lowest corporate tax rate in the European Union and thus the most
advantageous standard rate of corporation tax for Cyprus. The new taxation status
on Company is residence-based. A company is only 'resident in the Republic' if
its business is centrally managed and controlled in Cyprus. Therefore, under the
new rules, a resident corporation is taxable on its worldwide income accrued or
arising from sources both within and outside Cyprus if it is managed and controlled
from Cyprus. In view of the new tax legislation, the Holding International Business
Companies operating from Cyprus are now in a much more beneficial position because
they can enjoy the benefits deriving from the tax exceptions as well as the corporate
tax benefits by virtue of the new tax legislation. Tax
Exemptions
50% of interest receivable. In view of the new tax legislation
50% of interest received by corporation is tax exempt, excluding interest received
from the recipient's ordinary course of business or closely connected with the
recipient's ordinary business. Dividends
received Dividends received from abroad are
now totally exempt from corporation tax by virtue of the new tax legislation.
Furthermore, they are also exempt from the 15% defence contribution provided that
the direct holding is at least 1% of the share capital of the overseas company. Restructuring
provisions In view of the incorporation of
the EC Merger Directive 90/434/EEC into the new tax law, there are tax exemptions
on the transfer of assets (including shares) under a reorganisation (merger /
de-merger / transfer of assets). Gains
on shares and Capital Gains Tax Profits from
buying and selling shares are exempt from tax. Furthermore, there is no capital
gains tax except for the 20% capital gains tax applying on gains accruing from
disposal of immovable property held in Cyprus and shares in non-listed companies,
which own immovable property in Cyprus. The
profits from a permanent establishment abroad are
exempt from taxation. The exemption does not apply if (i) the Permanent establishment
directly or indirectly engages in more than fifty per cent (50%) in activities
that produce investment income, and (ii) the foreign tax burden is substantially
lower than that in Cyprus. Cyprus
Branches of Companies With the accession of
Cyprus in the EU, double taxation relief will be available to all Cyprus branches,
of companies resident in other member states in the European Union, since there
is no discrimination between the companies' resident in a Member state and the
branches of such companies' residence in another member state. Distributions
by Cyprus Holding Companies Dividends paid
to non-resident shareholders are exempt from withholding tax. In fact, Cyprus
does not impose withholding taxes on payments of dividend, interest and royalties
(provided the intellectual property rights are not used in Cyprus) to non-resident
recipients. Corporate
Tax Benefits
Carry forward of Losses Tax losses for the year 2000 onwards
may be carried forward indefinitely. Losses incurred abroad by a permanent establishment
of a Cyprus company can be offset against profits of the Cyprus Company. Group
relief The Group relief rules are now enacted, providing for group relief of tax
losses between a holding Company and its subsidiaries in the event where the Holding
Company owns at least 75% of the Subsidiary directly or indirectly and/or otherwise
among companies of the same group for the whole year. However, losses brought
forward will not be available for Group Relief. By virtue of the said rules a
company is considered as a member of a group if it is at least a 75% subsidiary
of the other, or both companies are at least the 75% subsidiaries of a third company. Net
of Double Tax Treaties
Cyprus combines a low-tax regime with a network
of double tax treaties. It has concluded the highest number of double tax treaties
compared to any other offshore jurisdiction, particularly with Central and Eastern
European Countries and a number of Middle Eastern countries. Most of the Treaties
follow the OECD model and all of them have the impact of reducing or eliminating
the normal withholding taxes imposed by the Contracting states on dividends, interest
and royalty payments. This is beneficial for trade with certain Eastern European
Countries and Russia because foreign investors investing in Eastern Europe have
the opportunity to channel their investments through a country, such as Cyprus,
which has a treaty with the investment recipient country allowing for a reduction
and in some cases elimination of the withholding taxes. Conclusion
Cyprus, one of the smallest European low tax jurisdictions, is a suitable
place for locating an intermediary company due to the island's combination of
tax treaties and low-tax regime. Dividends can flow through the Cyprus company
totally tax free and the company can be used to take advantage of the extensive
network of double tax treaties.
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General
Information
Cyprus is at the north-eastern
end of the Mediterranean Sea at the crossroads of Europe
and Africa. It covers an area of 9,251 sq km and lies
65 km south of Turkey, 96 km west of Syria, 385 km North
of Egypt and some 980 km south-east of Athens. The principal
topographical features of Cyprus are the two mountain
ranges running along the centre and north-east of the
Island, separated by a wide and fertile plain. Cyprus
has a pleasant climate with dry, hot summers and mild
winters.
Population
The population of Cyprus is about 758,000 (2000 est.). Greek Cypriots form
the largest ethnic community representing approximately 78%, Turkish Cypriots
comprise the second largest community representing 18% and the remaining 4% representing
other minorities. Political
Structure
Cyprus became an independent Republic in 1960. The political
system is modelled on Western democracies in which individual rights are respected
and private enterprise is given every opportunity to develop. Under its Constitution,
Cyprus has a presidential system of Government. The President is the Head of State
and is elected for a five-year term of office. The executive arm of the Government
is the Council of Ministers to which the President appoints members. The Ministers
are responsible for the administration of all matters falling within the domain
of their ministries and for the implementation of legislation. Legislative power
is in the hands of the House of Representatives, which consists of 56 elected
members who hold office for a period of five years. A multi-party system operates
in Cyprus and the electoral system is based on proportional representation. The
legal system is based on that of the United Kingdom and all statutes regulating
business matters and procedure are based on English Law. Most laws are officially
translated in to English. Infrastructure
and Economy
Cyprus is readily accessible by air and sea. The major port
facilities are those of Limassol and Larnaca, situated along the south coast of
the Island. The economy of Cyprus is based on a free enterprise system. The Government's
role is limited to regulation, planning and the provision of public utilities.
During the last fifteen years, the economy of Cyprus has demonstrated spectacular
growth and its currency has enjoyed relative stability.
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