Cyprus

Cyprus offshore company formation

Under new legislation worldwide income taxation of foreign-controlled Cyprus offshore companies will no longer depend on where they are registered but on where they are managed and controlled.

Companies registered in Cyprus but managed and controlled from abroad, will only be taxed in Cyprus on their income generated in Cyprus. Offshore company in Cyprus will enjoy exemption from tax on foreign dividends and interest and income from any permanent establishment abroad, as well as all foreign tax credits and offsets of losses incurred abroad. They will not be entitled to benefits under the double taxation treaties, but will not be subject to the exchange of information rules under such treaties. So offshore company in Cyprus can be referred to as an international business companynowadays.

Cyprus as an international business centre

A number of factors contributed to Cyprus' establishment as one of the most attractive and established international business centres worldwide:

•  Member of the European Union and the European Monetary Union
•  Stable macroeconomic, political, legal and taxation environment
•  A favourable taxation system, with the lowest level of corporate tax in the EU at 10%
•  Wide network of double tax treaties
•  Advanced legal, accounting and other professional services
•  Robust and effectively supervised banking system
•  Strategic location at the crossroads of Europe, Asia, the Middle East and Africa and optimum time zone
•  Excellent infrastructure, transportation and telecommunication systems
•  Highly educated, professional workforce

Cyprus New Tax Legislation - important for Cyprus company formation

The new legislation came related to company registration in Cyprus into force on 1 January 2003.

Under the new law Cyprus tax is imposed:

• A company is considered resident if it has its management and control in Cyprus. Therefore any company that carries out operations outside Cyprus and belongs to non-residents of Cyprus and has its majority of the board of directors outside Cyprus is not liable to taxation in Cyprus. This means that non-resident - offshore companies in Cyprus cannot take the benefit of any double tax treaties involving Cyprus but at the same time will not be subject to the exchange of information rules under such treaties.
• On the other hand, if a Cyprus company wishes to take advantage of the double tax treaty network of Cyprus it is highly advisable to have the majority of the directors in Cyprus and to provide that all board meetings of the company shall take place in Cyprus (we can employ our Cyprus nominees for this purpose).

Summary

Worldwide income taxation of foreign-controlled or offshore companies will no longer depend on where they are registered but on where they are managed and controlled. Companies registered in Cyprus but managed and controlled from abroad, will only be taxed in Cyprus on their Cyprus-source income. They will enjoy exemption from tax of foreign dividends and interest and income from any permanent establishment abroad, as well as all foreign tax credits and offsets of losses incurred abroad. They will not be entitled to benefits under the double taxation treaties, but will not be subject to the exchange of information rules under such treaties.

Key Information for Cyprus company formation

Approval of Cyprus company names            

• Names may be expressed in Greek or any language using the Latin alphabet. The following words will be unacceptable: 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.

Shareholders & Directors 

• The minimum number of directors is one. They may be natural persons or bodies corporate; they do not need to be Cyprus residents. Minimum number of shareholders is one.

Registered Address (included into our fee).

• All companies incorporated in Cyprus must have a registered office in Cyprus

Company secretary (included in our fee)      

• All Cypriot companies must appoint a company secretary, who may be a natural person or a corporate body.

Authorized share capital   

• The share capital must be expressed in Cyprus pounds. The minimum authorized, issued and paid up share capital of an offshore company in Cyprus is € 1,000. For companies wishing to establish a physical presence in Cyprus, the minimum is € 10,000.

IMPORTANT NOTE

• Payment of the capital can be extended in time for offshore company in Cyprus.

Tax number         

• Every offshore company in Cyprus is obliged to have a tax number. The number should be stated on the company invoices after Company registration in Cyprus.

Financial Statement requirements 

• Audited financial statements have to be submitted to the Cyprus Taxation Authority and to the Central Bank of Cyprus annually. We will be able to provide the auditors, if required.

Services and Fees

• Formation, registration of a non-resident (offshore) company in Cyprus. Provision of a registered office, secretary for a Cyprus company formation €2.650
• The cost of the annual accounts preparation for the company depends on the amount of transactions. We cooperate with practicing auditors and accountants who can provide these services at very reasonable costs, which are always agreed in advance with the client

Additional Services:

• Apostilling of the documents (may be required by foreign banks and authorities if the company documents will be used outside Cyprus) EURO 150
• Virtual office for an offshore company in Cyprus including mail forwarding and fax/phone line - please ask for deails.
• Next and subsequent years payments for the offshore company in Cyprus registered office address and secretary €2.000
• An annual fixed duty of €350 is to be paid to the Registrar by 30 June. The duty is not applicable to dormant companies (i.e. companies with no turnover in current year) and to those not owning any assets. The Company Director must make a declaration in either case. If the duty is not paid on time but is paid within 2 months from due date then there will be a penalty of 10%. If it is paid within 5 months from due date, there will be a penalty of 30%. If the duty is not paid within 5 months from due date, the Companies Registrar will strike off the company from Registry.

Please Contact Us if you would wish to proceed with Cyprus company incorporation and registration.