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Frequently Asked Questions about Cyprus


The following are some of the most frequently asked questions about Cyprus Company formation:

What makes Cyprus an attractive jurisdiction in which to incorporate a Company?
Cyprus has a stable government, economy and legal system and joined the European Union in 2004. Cyprus-resident Companies also pay a corporate tax rate of just 10%. In addition, a Cypriot Company can be 100% foreign-owned.
What specific tax breaks are available to a Cyprus Company?
Non-resident Cyprus Companies are tax-free (although it may be liable to pay tax in the country in which it makes strategic decisions). Dividends, interest and royalty payments have no withholding tax, while there is no capital gains tax. Cyprus has also signed double taxation treaties with more than 40 countries. In addition, losses incurred by a Cypriot-resident Company can be set against profits in the future years.
How is a Cyprus-resident Company defined?
A Company is deemed Cyprus-resident if i) strategic decisions about the Company are made in Cyprus and ii) if the majority of the board of directors members are resident in Cyprus for more than 183 days a year.
Is it possible to incorporate a Cyprus offshore Company?

Yes. Formerly known as a Cyprus Offshore Company, the Cypriot offshore structure is now known as an International Business Company (IBC).

Are there any restrictions on the activities of a Cyprus IBC?
A Cyprus IBC cannot undertake any business in Cyprus.
Do Cyprus residents enjoy any additional tax incentives?
No. Worldwide income is taxable for Cyprus-resident individuals and corporations.
What are the reporting requirements for a Cypriot Company?
A Cypriot Company must submit a set of accounts to the Cyprus Central Bank as well as Registrar of Companies and tax authorities within 18 months of incorporating in Cyprus. Annual submission of accounts is required thereafter.
Is Cyprus viewed as a tax haven?
No. Cyprus enjoys a relatively good reputation and international image.
Is Cyprus a secure long-term jurisdiction in which to invest?
Yes. However, note that Cyprus has agreed to share information about savings held in Cyprus banks by EU nationals with the account-holders' countries.
What are the best uses for a Cypriot Company?
A Cypriot Company is an ideal holding and investment Company.
What makes a Cyprus Company a good holding Company?
Groups investing outside Cyprus may throughflow income streams which are exempt from tax in Cyprus and do not pay withholding tax upon leaving Cyprus. However, a Cyprus holding Company must produce financial statements of consolidated accounts.
What makes a Cyprus Company a good investment Company?
Securities transactions are not taxed in Cyprus, even if this is the Company's core activity.
Are there any restrictions on the number of directors and shareholders in a Cypriot Company?
A Cyprus Company must have a minimum of one shareholder and maximum of 50. When incorporating in Cyprus via an IBC, the shareholder can be an individual or corporation of any nationality. A Cyprus Company must have at least one director.
Does the Cypriot government offer any specific incentives to investors in the country?
No specific incentives, although 100% foreign ownership is allowed, and non-EU investors can invest in Cyprus without capital restriction.
Are there any sectors restricted for investment?
Non-EU investors cannot invest in Cypriot property.

 

Contact Us

For more information on any of our Cyprus corporate services, email email@healyconsultants.com or telephone us at (+65) 6735 0120.

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