Cyprus Offshore Companies, Firms. Incorporation, formation, registering of off-shore companies in Cyprus

Cyprus as an offshore business center

Cyprus used to be a major offshore incorporation centre with thousands offshore companies incorporated annually. Cyprus has become one of the major business centres of the world due to its favorable tax legislation and wide network of double tax treaties. Since 2004 Cyprus will have the lowest tax regime in Europe and will stand out as a prestigious tax - incentive EU country and will be free from suspicions usually associated with "tax-havens" which have zero tax.

Advantages of incorporation in Cyprus

Under new legislation worldwide income taxation of foreign-controlled 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. They 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.

Cyprus New Tax Legislation

The new legislation came into force on 1 January 2003. Under the new law Cyprus tax is imposed:
a) On the worldwide income of all residents of Cyprus, and
b) On the income generated in Cyprus by any non-residents of Cyprus.

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 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 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 shall take place in Cyprus (we can employ our Cyprus nominees for this purpose).

Summary

Worldwide income taxation of foreign-controlled (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

Approval of 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	All companies incorporated in Cyprus must have a registered office in Cyprus (included into our fee).
Company secretary	All Cypriot companies must appoint a company secretary, who may be a natural person or a corporate body. The secretary is included into our fee.
Authorized share capital	The share capital must be expressed in Cyprus pounds. The minimum authorized, issued and paid up share capital of a Cyprus IBC company is CYP 1,000. For companies wishing to establish a physical presence in Cyprus, the minimum is CYP 10,000. IMPORTANT NOTE. Payment of the capital can be extended in time.
Tax number	Every IBC is obliged to have a tax number. The number should be stated on the company invoices.
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.

Services provided	Fee
Formation, registration of an offshore company in Cyprus. Provision of a registered office, secretary for a Cyprus offshore company.
TOTAL for the first year	EURO 1 500
Additional Services. Certified translation of the Memorandum and Articles into English (could be required for opening a bank account outside of Cyprus or for other purposes)	EURO 170
Application and obtaining a tax number	EURO 70
The legalisation of company documents at court and with Ministry of Justice	EURO 90
Next and subsequent years payments for the registered office address and secretary	EURO 390
The cost of the annual accounts preparation for the company depends on the amount of transactions and is about EURO 700 for a company with the annual activity level of 20 transactions.	EURO 700

If you are ready to order an IBC in Cyprus please fill in the order form here