Cyprus is a major offshore and onshore business centre, with a prosperous economy, excellent business facilities and thousands of offshore companies are registered here. There are 50 double tax treaties signed between Cyprus and other countries.
The existence of these treaties, combined with the low tax paid by a Cyprus company offer the possibilities for effective international tax planning. The main objective of the double tax treaties is to avoid the double taxation of income earned in any of the two contracting countries.
This is done through the tax sparing provisions whereby tax is credited against the tax that must be paid in the contracting state.
Book a Free Consultation1. Company Limited by shares which is subdivided into:
(a) Public companies and
(b) Private companies which are also sub-divided into:
i. Exempt Private Company
ii. Limited Private Company
2. Company Limited by Guarantee:
The Partnerships and Business Name Law, Chapter 116, also provides for two general types of Partnerships:
(a) General Partnership
(b) Limited Partnership
Further, section 347 of the companies Law Chapter 113 provides for the registration in Cyprus of foreign companies under the form of a branch.
The International Business Company is considered as non-resident for exchange control purposes and it can operate freely foreign currency bank accounts with any bank in Cyprus or abroad.
The net profits of the company are liable to income tax at the rate of 12.5%.
The beneficial owners of International Business Companies are not liable to additional tax on dividends or profits over and above the amount paid or payable by the respective company.
The first step in the process is the choice of the name of the company. An application is filed to the Registrar of Companies with the requested name. The period for the approval of the name is 4-7 business days.
Once the name is approved, the Memorandum and Articles of Association of the company are prepared and submitted for registration to the Registrar of Companies together with the information regarding the officers and shareholders of the company.
The Registrar of the Companies usually gives a registration number within 4-5 working days and then the corporate certificates are issued either in English or in Greek.
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