Registration of companies & enterprises in Cyprus PDF Print E-mail

 

“Expert SM”, an international law & consulting company, assists in registration offshore companies in Cyprus.

 

Under new legislation worldwide income taxation of foreign-controlled Cyprus 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. Offshore company in Cyprus 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. So offshore company in Cyprus can be referred to as an international business company nowadays.

 

Cyprus New Tax Legislation - important for Cyprus company formation

 

The new legislation came related to company registration in Cyprus into force on 1 January 2003. Under the new law Cyprus tax is imposed:

 

On the worldwide income of all residents of Cyprus, and

No requirement for audited accounts therefore no need for an auditor;

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

 

Summary

 

Worldwide income taxation of foreign-controlled or 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 for Cyprus company formation

 

Approval of Cyprus 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 an offshore company in Cyprus 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 for offshore company in Cyprus.

Tax number: Every offshore company in Cyprus is obliged to have a tax number. The number should be stated on the company invoices after Company registration in Cyprus.

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.