Cyprus is a large island located in the Eastern Aegean area of the Mediterranean at the hub of 3 continents that links, Middle East, Africa & Asia. It is 4 hours from London, 3 hours from Moscow & Dubai and an hour away from Athens, by air.

Fiscal Advantages

• Provides the lowest corporate tax rate in the European Union at 12.5%
• No tax on dividends or interest payments to non-residents
• No withholding taxes on royalty payments, or tax on capital gains
• Tax free repatriation of profits and capital
• Low income tax
• No tax on profits of a permanent establishment abroad and on salary earned abroad, under certain conditions
• No foreign exchange controls
• No estate duty
• Foreign sourced dividends are generally exempt from tax in Cyprus, when received by a Cypriot tax resident companies

Regulatory Advantages

• An IBC is treated like any other formation and taxed similar to any regular company, and is allowed to trade within the Cyprus territory
• Permits to reside in Cyprus for work and residential purposes are made easily available
• Double taxation treaties with over 43 countries
• Broad range of quality financial and business services - legal, tax, accounting and investment
• Simple administrative procedures
• Stable tax legislation & regulation

Limitations

• Legal advice to be taken before buying a Cyprus property
• The rate of Capital Gains Tax (CGT) is 20% on the sale of property located in Cyprus
• Profits from the sale of shares owned by a company that owns property in Cyprus are also taxed at 20%

• Company (private or public)
• General or Limited Partnerships
• European Company
• Branch of Overseas Company
• Sole Proprietorship
• Trusts

The Companies Law, states that,

• A private company requires one or more founding members, a maximum of 50 shareholders. It is not allowed to issue shares to public or even transfer shares
• A public company on the other hand, requires a minimum of 7 members and it can issue shares to the public

International Trust, is defined by law as a trust wherein:

• The Settlor is not a tax resident in Cyprus during the calendar year, which precedes the year of creation of the trust
• At least one of the Trustees from time to time is a tax resident in Cyprus during the trust period and
• None of the Beneficiaries are tax residents in Cyprus during the calendar year, which precedes the year of creation of the trust

A Cyprus company formation is an excellent, tax-efficient way to conduct legitimate international business, conforming to EU directives and on the OECD's white list of jurisdictions, which have substantially implemented the internationally agreed standards for tax cooperation. Cyprus is also an ideal location to set up a company for investment to the EU, Europe, Russia and CIS, Middle East and Africa. 

A minimum capital is not required to register a company. Company registration takes approximately 3 working days or lesser depending on document submission. Shelf companies are allowed in Cyprus and are ready to be incorporated. 

A copy of the annual financial statements must be attached to the annual return, with an auditors report. The documents filed with the Registrar of Companies must be in Greek (or Turkish) and are open to public inspection. By concession, the financial statements filed with the Annual Return may be in English. 

Accounting, audits & tax need to be conducted regularly through an independent firm resident in Cyprus. Accounting year-end is deemed to be 31^st December, unless notice of another date is given.

• Company Name
• Objects of the Company
• Proposed Capital Structure
• Proposed Shareholders
• Corporate Shareholders
• Passport & other documents
• Address proof of the Registered office
• Details of Directors & Secretary
• Memorandum & Articles of Association
• Fee applicable for Incorporation

• Tax resident individuals of Cyprus are taxed on all chargeable income accrued or derived from all sources in Cyprus and abroad
• Individuals who are not tax residents of Cyprus are taxed on certain income accrued or derived from sources in Cyprus
• An individual is tax resident in Cyprus if he spends in Cyprus more than 183 days in any one calendar year
• Foreign taxes paid can be credited against the personal income tax liability
• Special contribution for defence is imposed on dividend income, ‘passive’ interest income and ‘passive’ rental income earned by Cyprus tax residents
• Non-tax residents are generally exempt from special contribution for defence

There are lots of other tax exemptions in Cyprus. All of the following are free of income tax:

• Interest received by individuals
• 50% of interest income of companies
• Dividends
• Profits of permanent establishments carrying on a trade abroad
• Profits from the sale of shares
• Income from employment services provided abroad to a non-resident employer

• Corporate tax rate in the European Union is taxed at 12.5%
• Tax resident companies in Cyprus, are taxed on their income accrued or derived from all chargeable sources in Cyprus and abroad
• A non-Cyprus resident company is taxed on income accrued or derived from business activity through permanent establishments in Cyprus and on certain income arising from sources in Cyprus
• Companies that are managed and controlled in Cyprus is termed as a Cyprus resident company
• Foreign taxes paid can be credited against the corporation tax liability
• VAT rates are applicable, it is imposed on the supply and acquisition of goods and services

The Republic of Cyprus is a Member State of the European Union and a member of the Eurozone. Cyprus is an independent, sovereign Republic with a presidential system of government and a written constitution, which safeguards the rule of law, political stability, human rights and the ownership of property. Cyprus is a member of the British Commonwealth, Council of Europe, IMF, UN, World Bank and WTO and is signatory to many international conventions and treaties. 

The European Union regulations play a role in the strong legal framework of Cyprus. Having been a British Colony, the English common law has influenced the legal structure of Cyprus, making it a leading international finance centre.

The following authorities regulate Cyprus Financial Institutions:

1. The Central Bank of Cyprus
2. The Cooperative Societies Supervision & Development Authority
3. The Superintendent for Insurance Control
4. Cyprus Securities & Exchange Commission

Cyprus is a member of the United Nations and most of its agencies, as well as the Commonwealth of Nations, World Bank, International Monetary Fund and Council of Europe. In addition, the country has signed the General Agreement on Tariffs and Trade (GATT) and the Multilateral Investment Guarantee Agency Agreement (MIGA). 

Licences or permits are required for certain business activities in Cyprus, with the licensing authority depending on the activity. The costs of business licences will vary according to the activity being undertaken, as will the licensing authority. For construction projects, the town planning permit costs EUR 3,251 and a building permit EUR 3,500.