Cyprus Company Registration: The tax effective solution for international investment
If you are about to invest and looking for offshore tax efficient jurisdiction, Cyprus company registration is the right procedure to add to your options.
If you are about to invest and looking for offshore tax efficient jurisdiction, Cyprus company registration is the right procedure to add to your options.Cyprus being the second smaller member of EU, is an onshore European jurisdiction with compelling offshore tax advantages. These offshore advantages, transformed Cyprus to a major European business center with Cyprus company registration favored by a vast community of investors. Adding to the equation of success are the professionalism of Cyprus legal services providers and the high standard of Cyprus fiduciary services provided by Cyprus law firms.
Cyprus, always part of the international tax planning sheets, now experiences more growth due to the fact that in 2004 it acceded the EU and in 2008 adopted Euro, transforming the island to an international business centre, rather than a cheap tax shelter. Contrary to other isolated offshore tax shelters, black listed in most developed countries, Cyprus has a network of 45 treaties for the avoidance of double tax, which together with the full implementation of all EU common market directives make Cyprus the most networked low tax jurisdiction in the world.
The corporate tax rate in Cyprus is just 10%, which is the lowest corporate tax rate in EU. The real “offshore advantages” however, come with proper advice on structuring, utilizing the blanket tax exemptions offered for international transactions, where the effective tax for specific structure might be as low as 0%. As an example one of the most efficient uses of Cyprus companies is the Cyprus Title Trading company. The Cyprus Title Trading company takes advantage of a tax exemption in Cyprus tax legislation providing that title trading activities of a company are fully exempted from capital gains tax. In the category of “Titles” almost anything that is traded is included like shares, bonds, debentures etc. The use of Cyprus company registration and Cyprus company administration for investment purposes in this respect is widespread.
More often than not, such tax structures are facilitated through Cyprus company registration carried out by one of the law firms headquartered in Cyprus. The Cyprus law firm instructed will usually provide Cyprus company administration services to complement the registration and advise and provide the smooth operation of the Cyprus company for the years to come. The provision of nominee or trustee shareholders, the setting up and maintenance of a shareholders trust and other banking facilitation services are usually provided by the Cyprus law firm undertaking the incorporation through is Cyprus fiduciary services department. The provision of ad hoc legal services, tax advice and structuring advise will also be undertaken by the instructed law firm.
A fundamental part of the provision of the services would be the explanation and understanding by the interested investor of certain aspects relating to the formation of the company and the legal and tax issues which are incidental to Cyprus company registration.For instance one aspect that needs to be explained and thoroughly understood is the extend of confidentiality that is enforced in Cyprus. In general fishing expeditions are not allowed in Cyprus and there must be a specific incident investigated in order to raise the confidentiality principle in relation to a Cyprus company beneficial shareholders. This is especially true where the trusts to shareholders is on a lawyer or lawyer related interests where confidentiality is incidental to their profession, and virtually impossible to raise. These issues and many others need to be explained during the company incorporation process.
LLPO Law Firm is a Cyprus law firm regulated and licenced by Cyprus Bar Association. LLPO Law Firm maintains presence in London, UK, Athens, Greece and Bucharest, Romania and we are active successfully in the fields of Cyprus company registration and Cyprus company administration for 13 years. Our Cyprus fiduciary services and offshore tax services maintain the highest standards of provision aiming to a smooth and seamless operation of our clients companies.
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Michael Ioannides. Michael Ioannides is the author of this article on cyprus company registration. Find more information on Cyprus Companies here |