FOR ONCE YOU CAN BE FORGIVEN FOR NOT KNOWING YOUR GEOGRAPHY
AFTER ALL IT’S EUROPE’S BEST KEPT SECRET

"Cyprus offers a strategic location, favourable tax environment, educated work force, excellent telecommunications, modern banking and legal infrastructure which make the country the perfect business bridge for the European Union and the Middle East"

Source: Wall Street Journal.

"Building on decades of steady development, underpinned by a formidable reservoir of professional and administrative talent and blessed by one of the sunniest climates in the world, the Republic of Cyprus is becoming known as a place where money works and things get done"

Source: Forbes 2005 Investing Guide.

"... accession to the EU has prompted many important structural reforms, helping to lay the foundation for sustained economic growth into the future"

Source: International Monetary Fund (IMF), executive board concludes.

"Supported by robust productivity and employment growth, Cyprus’s real GDP growth was among the highest in the EU over the last decade"

Source: Council of the European Union opinion on the convergence programme of Cyprus.

"Of the 42 countries where offshore enterprises may be registered less than one third can be described as major business centres, in the sense that they provide a complete range of facilities for the conduct of commercial, professional, financial and maritime activities worldwide. Cyprus is included among countries such as Hong Kong, Luxembourg, Switzerland, United Kingdom and United States of America"

Source: Offshore Investment magazine.

Fiscal considerations of a Cyprus International Business Company and their expatriate personnel, which derive, from domestic Cypriot legislation and from Cyprus’ double tax treaties can be summarised as follows:

Tax on company profits is subject to tax at only 10 per cent and the business is not subject to any exchange control restrictions.

Capital gains tax is not payable on the sale or transfer of shares in an offshore company and no estate duty on the inheritance of shares in such a company.

Offshore branches of overseas corporations which are managed and controlled from abroad as well as offshore partnerships of individuals are totally exempt from corporate or income tax.

Beneficial owners of offshore companies, branches and partnerships are not liable to additional tax on dividends or profits over and above the amount paid or payable by the respective legal entities.

International tax planning is the arrangement of one’s financial and business affairs in such a manner as to attract either locally or abroad the minimum tax, without the contravention of any law or without defrauding the revenue by not declaring profits or by other deceitful means. Cyprus holds an important position in international tax planning due to its favourable tax regime and its wide network of double tax treaties.

Company respectability will not suffer from identification with an obvious "tax haven" country. In this respect, a Cyprus International Business Company is indistinguishable from any other company registered in any developed country in the world.

Type of International Business Companies registered in Cyprus and their operations are being carried out smoothly, without undue problems. The following are some of the types of companies currently operating in Cyprus.

Trading companies are mainly acting as the middlemen involved in the marketing of goods from, i.e., Europe to the Middle East or other developing countries. In addition to the traditional movement of trade in recent years trading with Eastern bloc countries, the Far East and with Western Europe is developing at a very fast rate.

The process of re-invoicing, whereby profits accrue in the trading company, is a specialised service which involves the handling of documents under letters of credit and where necessary, the legalisation of documents at the Chamber of Commerce and Embassies and Consulates. In view of the advanced facilities offered to enable re-invoicing, Cyprus has become a very popular and efficient centre for these services. Such facilities include the banking services, availability of Embassies and Consulates and the professional staff to service such companies.

Holding and investment companies can be the parent of a number of International Business Companies registered in Cyprus or companies registered abroad. This is of particular interest where a number of investors are participating in International Business Companies, or where companies registered abroad wish to control and direct their investment through a holding company. Such companies may often be used advantageously in conjunction with the Cyprus double tax treaties.

Trust and fund management companies can be set up in Cyprus for the management of investments, pension funds and trusts.

Service and consultancy companies are becoming a much-preferred location for the establishment of service and consultancy companies mainly by British and European architects, engineers, quantity surveyors and other consultants with activities in the Middle East and Africa.

Shipping and ship management companies in Cyprus has been developed into a major shipping centre and its importance in the shipping world is evidence by the fact that for the last two years Cyprus has been named third in the world in registration of ships with a total of over 23.000.000 tons gross with over 2.400 vessels.

Real estate companies are used extensively and advantageously both for investment and for dealing in land and buildings. In particular, such companies may be used in conjunction with the Cyprus double tax treaties and can be of special interest for investment in real estate in the UK, France, Denmark and Sweden.

Zero profit making company - Reimbursement of expenses an administrative/marketing office that operates as a liaison between group companies and customers/suppliers may operate on a reimbursement of expenses basis whereby a group company reimburses all expenditure resulting in a no profit-no loss situation. Such operations, which are normal for administrative/marketing offices, incur no company taxation. Such a company may be a branch or a subsidiary of a group company. In the case of a branch company there are special reporting requirements, which include the presentation of the Registrar of Companies of the head office accounts duly, translated into Greek.

Formalities and Registration Procedures for Registering an International Business Company
Instructions for the Formation of a Cyprus Holding Company