Why choose Cyprus for international business.
Interest in the establishment and operation of companies in Cyprus is increasing, as more and more entrepreneurs and individuals are becoming aware of the benefits they can derive from doing business in Cyprus. Cyprus combines a credible business center within the European Union, suitable for international activities, with low taxation, with an advanced banking system, with high quality professional support services at a reasonable cost, with a stable and advanced legal system, with strong tax incentives and with a wide network of Double Tax Avoidance Treaties with very favorable provisions between Cyprus and more than 55 states including all the countries of Central and Eastern Europe. All this leads to preferring Cyprus from other international business centers.
We guide and advise clients at all stages of the process of setting up a new company or relocating their existing business in Cyprus, or form a complex corporate structure that may include Cypriot companies and companies from other countries. We can also provide, after formation, the necessary services for the stable and uninterrupted operation of the new company.
The tax benefits of a company based in Cyprus are directly related to where it is “tax resident”. In turn, this depends on the place of effective management and control of the company, which must be in Cyprus in order to have all the tax advantages of Cypriot companies. This practically means, among other things, that the majority of directors must reside permanently in Cyprus and that Board meetings should also be held in Cyprus.
Therefore, if businessmen or investors who are not resident in Cyprus wish to establish a company with tax residence in Cyprus, they need to appoint directors and secretary who have permanent residence in Cyprus and who meet the qualitative criteria for these positions.
We can provide this type of service to our clients, and can undertake all necessary functions of management and administration of our client's companies. Our executives and managers, supported by our lawyers, accountants and tax consultants, ensure that our clients comply fully with all their legal and tax obligations.
Cyprus Tax Avoidance Treaties with other countries
Cyprus maintains an extensive network of double tax avoidance treaties, which are largely in line with the OECD Model Convention for the Avoidance of Double Taxation on Income and Capital. Coupled with the tax advantages that Cypriot companies enjoy, these make Cyprus the country of choice for international business transactions, and especially those related to the former Soviet countries and Eastern Europe.
The stable and effective legal framework and especially the attractive tax system of Cyprus have been a catalyst for the country's fast-growing economy in recent decades.
Competitive advantages of a Cypriot company
Net profits from companies based in Cyprus are subject to income tax at a rate of 12.5%, which is one of the lowest rates of taxation within the EU Member States.
There is no withholding tax on dividends, interest and royalties declared by companies for shareholders who are not resident in Cyprus.
There is a full tax exemption on the profits of companies acquired outside Cyprus if management and control is exercised outside Cyprus.
There is a complete tax exemption on profits from dividends from abroad or profits from permanent establishments in other countries under certain circumstances.
There is a tax exemption on profits arising from the disposal of shares and other collateral / securities.
There is a tax exemption of 80% of the profits generated by the exploitation or licensing as well as on the profits resulting from the disposal of Intellectual Property.
There is a full tax exemption on capital gains for the transfer or sale of shares to a company, unless that company owns real estate in Cyprus.
Cyprus has a large Double Tax Avoidance Network covering more than 55 countries.
There is unilateral tax relief in Cyprus for amounts paid for tax and for tax amounts withheld abroad.
There are no CFC rules and regulations.
There is no inheritance tax.
Company formation – the essential first steps
· Company Name: you will provide us the name you propose for your new Company and two alternatives, so that we check availability.
· Scope - Intended Activities: A brief description of the company’s intended activities, to enable us draft the Memorandum and Articles of Association.
· Registered Office: A Cyprus company must have its registered office address in Cyprus; we shall provide you with a Registered Office (address and work space) at our facilities, should you need one. Alternatively, we can assist you to lease your own office space in Cyprus, according to your budget and particular requirements.
· Secretary: A Company Secretary (legal entity or natural person) is required by law for all Cyprus companies; we can offer to you a Secretary appointed by us.
· Director: There must be at least one Company Director, whom we will provide to you if required as part of our basic service. A director can be either Cyprus resident or foreign, legal entity or natural person. If tax residence of the Company is intended to be established in Cyprus, the Directors must be local, so as to prove that management and control of the company is exercised in Cyprus.
For each Director and bank account signatories appointed by the shareholders the following documents are required: Passport copy, residential address documentation (recent utility bill) occupation and bank reference letter for each individual or legal entity.
· Shareholder: A minimum of one shareholder is required to form a company. If anonymity is preferred, then the shares may be held by a nominee shareholder or trustee. We can provide you (the beneficial shareholder) with a trustee or nominee shareholder upon request. For each beneficial shareholder the documents required are the same as the ones listed above for the Directors.
Time frame for Company formation
Upon approval of the Company’s Name, it will take 5 to 8 working days to complete the Company incorporation procedure.
On incorporation you will receive the following for your new Company:
· A certified copy of the Memorandum & Articles of Association in Greek language, together with an English copy as translated by us.
· The following certificates from Companies Registrar, in Greek and/or English: Certificate of Incorporation, Certificate of Shareholders, Certificate of Directors and Secretary, Certificate of Registered Office.
· Share Certificates in Greek or English.
· The Company Stamp.
· In case nominee shareholders and/or directors are appointed, the beneficial shareholders also receive signed share transfer documents and signed resignation letter by nominee shareholder and directors respectively, and signed declaration of Trust and Indemnity Letters, whereby the beneficial owners indemnify the nominees for their actions.
Services for the administration / operation of a Cypriot company
We make life easy for our clients who wish to set up and operate their company in Cyprus. We facilitate the Company's management and control as necessary, by providing all required administrative services, a secretary, professional (nominee) directors, nominee shareholder(s), by creating and managing Trusts, and by assisting in hiring personnel and managers for the new company.
Provision of registered office, company secretary, local director(s)-nominee director(s) to attend all Board meetings (billed annually).
Services offered optionally: registration of the company in the Cyprus tax register (one-off), for the opening of the Company's bank account (one-off, per account), for bookkeeping and accounting (annually), HR/payroll related services (annually).
Of utmost importance for establishing the tax domicile of the client's business is the "place of effective management of the company". This is determined by where day-to-day management and decision-making is taking place, the place of general assembly of shareholders, the place of keeping the books and records, the venue of the BoD's meetings, and the tax residence of the members of the Board of Directors.
We will take care to assist our clients that wish to have their tax residence in Cyprus, in tax planning of their activities, to ensure that the place of effective management of their company will be in Cyprus.
Companies with tax residence in Cyprus will provide stability and increase the profitability and enterprise value over time. Any solution adopted will be designed taking into account the concept of tax residence as defined in the relevant tax codes, but also by references and reports from the Organization for Economic Cooperation and Development (OECD ).
SERVICES FOR OPENING A BANK ACCOUNT
These services are aimed at helping the customer to apply in Cyprus and / or other countries to open a bank account with web banking facilities.
We provide services to facilitate the management and administration of our client's company, that will relieve the entrepreneur from routine issues, so he/she can devote his/her time and focus on the development of his / her business, having the peace of mind that a competent, experienced team of professionals takes care of the rest.
BUSINESS SUPPORT - ACCOUNTING, TAX AND LEGAL, COMPLIANCE
We support our clients with any needed services related to accounting, tax and legal matters, by acting as a one-stop-shop in cooperation with external partners and / or other specialized companies, as required, to provide a full range of accounting, tax and legal services. These services are useful in cases where client companies do not have sufficient in-house staffing for these functions and wish to outsource them. We offer these services in close cooperation with each client; we help prepare and submit all the various documents required by the competent authorities and related to the particular business practice of our client.
The services offered include: Bookkeeping and Financial Statements, Training and Submission of Tax Information and Statements, Tax Planning and Advisory Services etc, HR/payroll support for the employees, Audit and Assurance,legal services and other advisory services as required by the client.
Key features of Cypriot Private Limited Company (Limited)
Share capital: No minimum or maximum is set and no minimum paid.
Shareholders: At least one required. Trustees (nominee shareholders) are allowed - they must be licensed by the competent authorities.
Directors / Managers: At least one is required. In some cases, the Director may also act as Secretary of the Company. It may be either a natural person or a legal entity. They are not required to be residents of Cyprus, however this is recommended if the desired tax residence of the Company is in Cyprus.
General Assembly of Shareholders: At least one General Meeting of Shareholders per year. The General Meetings of the Shareholders, in addition to the Annual General Meeting, may be carried out by means of a written resolution.
Company Secretary: May be a natural person or legal entity.
Registered office: Required to be in Cyprus.
Information on the taxation of Cypriot companies
Corporate income tax rate: 12.5% of earnings.
Tax-based residence based on the place of management and control. Companies with a tax office in Cyprus are subject to tax on their worldwide income. Companies that do not have their tax domicile in Cyprus are subject to tax only for income arising in Cyprus.
Withholding tax on dividends, interest and royalties: No tax on companies that do not have their tax domicile in Cyprus.
Taxation rules: Based on the interpretation of the Law.
Double tax relief.
Double Taxation Avoidance Agreements - over 55 countries.
Taxation of profits on sales of shares and other securities: Exemption from any tax (unless the shares belong to an unlisted company that owns real estate in Cyprus).
Tax losses / losses: They can be transferred for a period of five years - but they cannot be carried back.
Special Tax Schemes: Shipping Companies, Intellectual Property, Cyprus International Trust, AIF's - Funds, Expatriates
Accounting data and books of a Cypriot company
Each Cypriot company is required to prepare financial statements that are audited by an independent auditor in accordance with the relevant provisions of the Cypriot legislation (Companies Law C. 113) and the International Financial Reporting Standards, as well as submit them annually to the Registrar of Companies. The main features are below.
Accounting Standards: IFRS
Submission of accounts: Necessary / Required
Consolidation: Yes - exemptions for parent companies of larger groups but also for small groups.
Why can you trust us?
Because our executives know what you need to do to set up and operate a Cypriot company based on your own particular needs, which will bring maximum benefit to you and your international business.
Data to be collected from our clients (and maintained current) for whom due diligence is required by law:
“Know Your Client” information needs be submitted to us, so that we get to know our clients and understand his desired business goals, the main activities of the company and how they are performed.
Shareholders, Directors and the Secretary should all provide a copy of their identity or passport and proof of permanent residence in the form of a utility bill or a bank account. In addition,
each beneficiary shareholder and director should complete a reference document and provide us with a brief CV.
Services provided shortly after the establishment and registration of the Company.
Following the formation, we proceed with the VAT / VIES registration of the Company so that it is ready to act immediately.
COMPANY ADMINISTRATION AND MANAGEMENT
If the real management of the company is based in Cyprus, it will also have its tax residence in Cyprus. This leads to significant economic benefits, since the chances of future disagreements with tax authorities of other countries regarding the actual tax residence of the company, the income tax and the taxation of dividends, are minimized or eliminated. Recently, initiatives are being stepped up around the world against companies set up for the sole purpose of tax exemption such as "de-offshorisation" in Russia, per reports of the Organization for Economic Co-operation and Development. Our company will advise clients to adopt the appropriate corporate structure with sufficient resources in relation to the type and volume of business intended.
Cyprus is a European state and attractive corporate jurisdiction for companies that need a EU headquarter, due to the low corporate tax rate, favorable treatment in certain activities and infrastructure and know-how in general.
We aim to offer our customers an innovative, unique and complete solution for the operation of a Cypriot company with real administration and headquarters in Cyprus.
There are significant benefits of deploying your IT systems in the cloud versus the legacy on-premises infrastructure. SME's are reluctant of moving to the cloud because it is unknown territory to them. We would be happy to discuss with you what it takes to create from scratch, or migrate your existing, IT infrastructure and apps to the cloud and help you implement it in the most efficient way. Would you like to know more? Ask us for a free IT security and infrastructure consultation, and we will be more than happy to go through the risks and rewards with you.
Today’s businesses are -almost invariably- relying on IT systems for their operations, marketing, internet presence, customer relationship management, inventory, and resource management. So no matter in which sector of the economy you are active, you will be leveraging information technology and systems to run your business and make it grow. For your IT operations, you need servers, digital storage and networking to host your applications. Traditionally, SMEs procured such IT infrastructure and installed them on premises, in a dedicated server room with appropriate power and cooling. This has all changed now, as companies of all sizes, from startups to SMEs to large enterprises, have turned to the public cloud instead of building and maintaining on premise IT infrastructures.
There are good reasons for this change of preference in recent years. On average, the on premise IT infrastructure life is 3 to 5 years when used and maintained properly. This means that any existing physical, on premise hardware that you may be using now will need replacement at some point, sooner or later. There is an obvious need to frequently backup the apps and data, but also prudent to consider migrating all servers, apps and data to the Cloud. We can assist you with this task. The cloud is perfectly safe and secure, it will not die on yoυ, but chances are that the on premise infrastructure will at some point.
Let’s share some facts and figures: The average cost for an SME to procure and deploy an on premise server lies between 3,000 to 5,000 euro (storage, networking and operating systems are extra). If you choose a leading cloud service, running this will require minimal management effort. The monthly cost of a cloud server with full management can be as low as 100 euro, whereas the average operation cost of an on premise server per month, including staff costs to manage the server 24x7, can be 15 times higher.
It takes much longer to procure and setup an on premise server and costs way more. It takes just minutes to acquire and set up a VM-Windows server on the cloud, compared to days and hours for an on premise solution. This saves significant time and money. In addition you will have to pay power and cooling costs for the οn premise infrastructure, as well as someone to monitor and maintain the infrastructure. It can be expensive having to replace disks and building-in some kind of redundancy to avoid loss of data.
If you migrate to the public cloud, you do not need to worry about disks dying or paying for redundancy. The cloud providers have built in redundancy and charge no extra costs to keep your data safe. This means you do not have to pay for an IT professional to monitor for any hardware or failures saving you even more money.
It can be time consuming and costly if a on premise server goes down or offline: an IT professional needs to attend to the matter, and can take hours if not days to bring it back up with the apps and data, for your business to continue as usual. Compare this to the leading cloud service providers, who guarantee 99.9% server uptime. If something does go wrong with a cloud server, your IT staff, as long as they have an internet connection can fix the issue within minutes. Moving to the cloud makes so much more sense. Can your business afford to not be working for hours or even a day?
SME's tend to spend minimal resources for security for their On-Premise servers causing a massive risk to their business. Risks include data loss, viruses, malware, trojans, worms, spyware, ransomware and much more. Back in 2014, it was estimated that antivirus technology only caught about 45 percent of known malware cyber-attacks. That was 3 years before –among many others- the UK NHS was hit by the WannaCry ransomware.
Microsoft spends over $1 billion annually on security R&D, for technology deployed on their Microsoft (Azure) Cloud Services. The other major public cloud providers (Amazon, IBM) spend similar amounts. That implies that if your IT systems were in the public cloud, you would have the same level of cyber security as Microsoft, IBM or Amazon, as this is already included in their service price. You wouldn’t have to worry much about security software costs, as well as security management effort.