Areas of Practice

Cyprus, with a population of approximately 850,000, is an attractive location to conduct business and a favourable jurisdiction to register a company, for the following factors:

• Member of the European Union
• OECD White List: Cyprus is included in the Organisation for Economic Cooperation and Development (OECD) White List
• Strategic location: Cyprus is situated between three continents: Europe, Asia and Africa
• Languages: English is widely spoken and many Cypriots are multilingual, speaking also German, French, Russian and other languages
• The legal system is largely based on UK common law and EU Directives and Regulations, making it a reliable and stable jurisdiction
• Excellent legal, accounting and professional services
• The incorporation of a company is simple and straightforward. A company may have only one director and shareholder. The name of the company must be approved by the Registrar of Companies. The necessary corporate documents are then filed with the Registrar of Companies for registration. An English translation of the corporate documents may also be filed at an extra fee.
• The annual fee to the Registrar of Companies is €350 per year
• Audited Accounts: Cyprus companies are required to file audited accounts with the Registrar of Companies every year.
• The International Accounting Standards are applicable in Cyprus
• Bank Accounts: A corporate bank account may be opened with a Cyprus bank on submitting an application, together with the relevant corporate documents, resolutions and KYC documents
• The Directors: do not have to be nationals or permanent residents of Cyprus
• A company is considered as tax-resident in Cyprus if its business is managed and controlled in Cyprus, irrespective of the residence and the nationality of the ultimate beneficiaries-shareholders, who do not have to be a resident in Cyprus
• Beneficial tax regime for re-organisations of companies: no tax is imposed on divisions, profits earned from subsidiaries abroad (with some exceptions), transfer or mortgage of assets, or exchanges or sale of shares (except if related to immovable property in Cyprus, capital gains tax is imposed)
• Intellectual property royalties paid to non tax-resident companies bare 0 tax (except for intellectual property licenced and used in Cyprus)
• Income from the liquidation of a company is not taxed with capital gains
• Imports from and exports to other EU countries are completed without VAT

Tax Benefits of Tax-Resident Companies

• One of the lowest taxes in EU: Cyprus has one of the lowest corporation tax rates in the EU at 12.5%
• No withholding tax on dividends and interest and no capital gains tax on sale of shares (unless related to immovable property in Cyprus) and securities
• No capital gains tax for assets located outside Cyprus
• Cyprus has signed over 60 double taxation avoidance treaties with other countries, supporting international tax planning

http://mof.gov.cy/en/taxation-investment-policy/double-taxation-agreements/double-taxation-treeties

Voluntary wind up

In the event that a company has no further operations and has no liabilities, it may easily proceed for a voluntary winding up. A decision of the board of directors and the members is required and a liquidator is appointed. The proceedings are filed at the Registrar of Companies and when complete, a Certificate of Dissolution is obtained.

The above is only informative and does not constitute legal or tax advice.