Cyprus: Why Register A Cyprus Company

Last Updated: 11 March 2019
Article by Michalis Economides

Business nowadays operates in an interconnected world, without any boundaries or limitations to protect brands and companies from the merciless competition.

In our era, due to technological breakthroughs, competition is thriving and multi-attacking companies and brands from various channels of communication; therefore entrepreneurs find themselves in the difficult position of searching and finding the most favorable path to follow, for the achievement of economies of scales.

Currently, many entrepreneurs are in the process of searching various ways on how they can maximize their productivity and enhance their profitability by minimizing their operational costs. One of the main scenarios they examine, due to its endless possibilities, is the reincorporation or re domiciliation of their business activities in favorable markets. Even thought this practice is very common, entrepreneurs should cautiously consider their options, since this path can be very costly, multifaceted and time consuming.

Consequently, when entrepreneurs decide to pursue this course of action not only do they have to prepare their business plan but they also have to include the nature of activities and purposes of their company and simultaneously proceed with the political, economical, social and technological environment analysis of the target market.

Additionally, they should examine important economical parameters of the targeted country such as the taxation regime scheme, processing time of company formation or re domiciliation and the terms and conditions of the exchange regulations, as well as, the transaction flexibility, assets, personal information protection and requirements for opening corporate bank accounts etc.

In summary, entrepreneurs should thoroughly assess the business law frame work under which their company will operate.

Even though various countries are renowned for their favorable tax regime scheme, Cyprus is considered to be one of the most reputable and strongest jurisdictions for many types of company formation, incorporation, trusts and investment offering one of the lowest corporate tax rates in Europe.

Cyprus is a country island situated in the Eastern Mediterranean area, at the heart of three continents; Europe, Africa and Asia thus rendering it a favorable choice.

It is a full member of the European Community and completely aligned with the EU regulations. Its currency is Euro and the official language is Greek while English is spoken by almost everyone and Russian by a significant percentage of the population.

In addition, Cyprus has one of the lowest crime rates in the world. It has an excellent transportation structure and infrastructure that support the entire spectrum of business activities which take place on the island. It has a trustworthy and advanced private banking and medical system. Cypriot people are well mannered and are famous for their hospitality.

The Legal System of Cyprus is based on Common Law. Its economy operates based upon an open, market driven principle, with favorable tax regimes for the incorporation of companies and investments. Moreover, Cyprus is characterized by a high per capita income and renowned as a European Union center for foreign investments, offshore businesses and activities.

Also, it is important to note that the Government authorities of Cyprus are promoting heavily the incorporation and foreign investments, as well as, allowing the purchase / ownership of property under favorable conditions.

Consequently, Cyprus Government authorities engage in non – stop negotiations for forming double taxation treaties with non European countries, in order for the Cypriot active companies to enjoy an important competitive advantage. Currently, Cyprus is an affiliate to more than 50 double taxation treaties based on the OECD including the EU, China, India, Kuwait, Russia, Singapore, Thailand, USA, Azerbaijan, Lebanon, UAE, Georgia and other important hub countries.

Furthermore, other important advantages of Cyprus are the low corporation tax rate, the very short time frame for company registration, as well as, the low annual maintenance fees of corporations. Cyprus offers one of the lowest corporation tax rates in the EU, which is 12.5%. The time frame for the registration of a new company is very short, approximately 7-9 days.

Hence, Cyprus allows the use of nominee Directors, Secretary and Shareholders therefore there is no obligation of exposure of the Ultimate Beneficial Owner (UBO) in the public Company Registrar Record. Anonymity rights are fully safeguarded and there is no need for the owner to be present during the process of the incorporation or opening of a corporate bank account. Bank accounts can open between 2 – 5 working days with full online electronic banking and digital pass as well as a debit card.

Cyprus is considered to be the most well-known EU country for offshore company formation and Trusts. The Cyprus International Trusts are exempted from income tax, capital gains tax, special contribution or any other taxes. Additionally, there is no estate duty or inheritance tax in Cyprus, there is flexibility for relocation, there is no exchange control regulation and trusts can operate internationally with no disposal tax of securities. Thus, there are no withholding taxes on dividend payments, interest or royalties to non residents (subject to conditions).

In addition, the profits from the sale of shares in the stock exchange are tax free, whereas, the losses of a company can be carried forward opposed to future profits for an indefinite period. Besides those very important advantages, Cyprus is also offering the Group relief option, whereby the loss of one company can be covered by the profits of another since both of them are under the Cyprus residential tax scheme.

Moreover, Cyprus Permanent Residence and Citizenship Schemes are considered to be one of the strongest in the world since they provide several significant benefits to the investors, as well as, an advantageous flexibility towards the investors that are reside in non EU member states, which includes, their family members under 18 years old as well.

To sum up, Cyprus tax law is characterized by its simplicity, straight forward approach and effectiveness. Subsequently, entrepreneurs should consider Cyprus as a favorable market for incorporation or re – domiciliation of their business activities, since their companies will enjoy instantly, among other important advantages, low corporate taxation rates and annual maintenance corporation costs.

In addition, entrepreneurs will have the option of forming an offshore company or a trust so as to protect their assets, companies' strategies and personal information by enjoying a very beneficial taxation regime with no exchange control regulation that would limit international operation.

Justifiably, Cyprus is considered to be an EU Tax Heaven island country. Cyprus companies enjoy safety, stability and flexibility, as well as, overall low tax rates while having the opportunity to trade not only in the EU but in other countries by enjoying the advantages of over 50 double taxation treaties.

Cyprus is globally an ideal investment and incorporation gateway, offering to the investors a market right of entry to more than 500 million EU citizens, the Middle East and China.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions