Cyprus is a Mediterranean island with an advantageous geopolitical position at the crossroads of three continents, Europe, Asia and Africa. The island is a member of the European Union, the Eurozone as well as the European Economic Area and a commonwealth country.
The most common type of company in Cyprus is the Limited Liability Company. To establish a Limited Liability Company in Cyprus it is necessary to submit the application for the name approval (which will be approved within 3 working days) and to apply for the company registration (which will be approved within 8 working days). Once this process is complete, the Registrar of Companies will issue a certificate of incorporation containing the registered address, members and shares of the Company.
Registered companies in Cyprus can transfer their registered address to or from the Republic of Cyprus at any time. This enables companies to have their registered address in another country and be a national and Cyprus tax resident. The process of registering a company in Cyprus is fast, easy, straightforward and gives the privilege to the company to receive nominee services from resident parties e.g Firms facilitating the company registration.
Some of the advantages of registering a Company in the Republic of Cyprus are:
· Lowest tax rate in the EU at 12.5% on profits.
· 0% tax on the distribution of dividends, or payment of interest and patent rights (when used outside Cyprus) to non-tax residents of Cyprus.
· Dividends are not taxed among Cypriot companies, with tax deductions and foreign investment. dividends (on criteria that are easily met), provided that the share of the investment exceeds 1%.
· 0% tax to the profits from the sale of titles (including shares), dividends received, trading of securities (including bonds, shares, debentures etc), liquidation, company reorganisation.
· 0% Estate Duty is payable on the inheritance of shares.
· 12.5% rate tax on interests that come from or are related to the ordinary course of the business (eg interest on commercial debtors).
· Capital gains tax is imposed only on real estate located in Cyprus or on shares of a private company owning real estate in Cyprus.
· A Cyprus resident company is taxed on profit obtained within or outside the Republic of Cyprus.
· A company that doesn’t have residence in Cyprus is only taxed on profits obtained within Cyprus.
· Free movement of capital.
· Directives and Agreements are applicable against double taxation with more than 55 countries.
· The Laws and Regulations provide opportunities to the investors, businessmen and foreign companies to become tax residents of Cyprus.
Businesses from all over the world take the initiative and capitalise on this corporate-friendly tax system to expand their operations and set up a gateway into the EU market. Businesses that desire to register their company in the Republic of Cyprus are not obliged to reside, obtain Cypriot nationality or limit the operations of the company to Cyprus.
Advocate of the High Court of Cyprus
Consultant
Maria@impetuslaw.com
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