Each year thousands of new companies are registered with the Registrar of Companies in Cyprus.
In 2010, 19278 new companies were registered and 2011 looks set to top that figure. Year on year the number of annual registrations on the island increases, taking the total current number of registered companies in Cyprus to over 250.000 companies. Clearly Cyprus holds great attraction as a business venue for investors – Michael Chambers explores why so many international businesses entities are drawn to Cyprus and how you can take advantage of the venue yourself.
Favourable Taxation At the heart of the attraction to the island is certainly the favourable tax regime in Cyprus. Companies which are resident in Cyprus (inother words “managed and controlled” on the island) are taxed in Cyprus on income made both inside and outside the Republic. The rate of corporate income tax offered in Cyprus is highly attractive and one of the lowest in Europe offered by a non-tax haven and is just 12.5%. Interest income, dividend income and profits from disposal of securities are all exempt from the imposition of corporation tax. Corporate re-organization (transfer of assets and liabilities between companies) can also be undertaken without tax consequences.
Double Taxation Treaties Underlying the advantageous corporation tax system is a developed network of Double Taxation Treaties (of which there are over 45 with more under negotiation) which help to ensure businesses are not taxed twice in different jurisdictions on the same income. For a list of those countries with which Cyprus has agreed double taxation treaties, please refer to the end of this article.
Low and Operation Costs Cyprus is a relatively cost effective venue for incorporation. Procedure through the Registrar of Companies is straightforward and quick and a company can be tailor made or bought “off the shelf”, which speeds up the process further. Bureaucracy is kept to a minimum and ongoing costs for operating and maintenance the company are highly competitive.
A Developed System Having refined its laws during its time as a British Colony, the Cypriot laws on companies are heavily influenced by the British legal system and the applicable legislation is well developed and effective. The system is further empowered with a modern banking and finance sector which is able to support multinational enterprises operating on the island and offers a secure and well regulated environment to businesses.
Geographical Location At the crossroads of Europe, Asia and Africa, Cyprus is, strategically, a significant location for international business. Easily accessed from a multitude of international business locations, the island boasts two newly renovated airports which operate regular flights worldwide. Cyprus has also been a member of Europe since May 2004 and acceded to the Euro in January 2008.
Workforce The island attracts an educated and sophisticated workforce with a higher than average university attendance. Well trained and professional staff are readily available and the English and Russian languages are widely spoken by professionals operating in business.
How to Take Advantage “Management and control” in Cyprus does not depend on the nationality of the person in whose name the company is registered and does not require a company to limit its commercial operations in any way to the Republic of Cyprus, meaning that 100% foreign ownership of a Cypriot company is legitimate and it has never been easier for international entities to take advantage of the benefits that the Cypriot system has to offer. If you are interested in taking advantage of the tax benefits that a Cypriot company has to offer then contact us to discuss your individual requirements in detail and the services that Michael Chambers & Co. LLC can offer.
Some of the countries Cyprus has entered into Double Taxation Treaties follow, although some have yet to be ratified:
- CIS (ex-USSR)
- Czech Republic
- Kingsdom of Bahrain
- San Marino
- South Africa
- The States of Guernsey
- United Arab Emirates
- United Kingdom
- United States