Cyprus Company IncorporationChristos Paraskevas
Lawyers in Cyprus, a Cyprus portal for Cyprus lawyers published an article of our law firm in relation to the Incorporation of a Cyprus Company. You may read the full article here. Extracts are reproduced below.
The incorporation of a Cyprus Company can be effectively utilised by entrepreneurs for International Tax Law Planning purposes and at the same time enjoy the status of being located at a reputable business centre within the European Union.
The low Cyprus tax law regime coupled with the wide network of double tax treaties that Cyprus has signed with many countries, makes the idea for incorporating a Cyprus Company more attractive in the following tax planning structures.
A Cyprus Company is one of the most popular and effective method of tax planning. A Cyprus company can either be resident in Cyprus (provided its management and control is in Cyprus) or it can be non-resident (if its management and control is outside Cyprus).
The key condition of incorporating a Cyprus Company by a non-resident is the presence of the treaties for the avoidance of double taxation between the country of registration and the countries where the Cyprus Company or its subsidiaries will have activities.
The existence of these treaties, combined with the low tax paid by a Cyprus company offer the possibilities for effective international tax planning.
Tax Advantages of a Cyprus Company
- A uniform corporate tax rate 12,5%
- Dividend income participation exemption
- Exemption on disposal of securities (e.g. shares, bonds, debentures)
- No withholding taxes on dividends, interest and royalties (provided the intellectual property rights are not used in Cyprus) to non-residents of Cyprus.
- No capital gains tax
- No succession taxes
- Attractive IP regime
- Attractive tax regime for shipping companies
- Many double tax avoidance treaties
The registration procedure of a Cyprus Company:
1. Name of the Company
The first step in the process is to obtain approval of the proposed name of the company from the Registrar of Companies. The name must include the word “Limited” or its abbreviation “Ltd” to signify limited liability status.
2. Company’s Memorandum and Articles of Association
This is the constitutional charter of the Company and is drafted by a local advocate.
3. Share Capital
The share capital can be expressed in any currency and there is no minimum paid up capital. Authorised or Nominal Capital is the total capital, which the Company is allowed to issue to shareholders. Both Authorised and Paid up Capital may be increased very easily at any time by a Resolution of the Shareholders and as provided in the Company’s Articles of Association.
The minimum number of directors is one, who can be either an individual or a legal entity. The same requirement is provided for the shareholders. The difference is that the nationality of the directors is crucial, while the nationality of shareholders is immaterial.
The appointment of the secretary is made by the directors and the articles of association should normally contain an appropriate provision to this effect. The existence of a secretary is a requirement of the law. For practical purposes a body corporate (i.e. a company) may be appointed secretary. A number of secretarial companies which can act as secretaries to Cyprus companies are available and operate satisfactorily.
6. Registered office
Every company must have a registered office from the day it commences business or from the fourteenth day after its incorporation, whichever is earlier. The registered office is usually the place where the company’s Register of Members is kept, unless the company informs the Registrar of Companies of another place.
For more information about Cyprus Companies you may visit the site of the Registrar of Companies and Official Receiver of the Republic of Cyprus here .
For further information about the incorporation of a Cyprus Company you may visit our law firm’s homepage here
Our law firm may assist you with the incorporation of a Cyprus Company and advice on structure of cross-border operations in a tax efficient manner.
For further information on the subject please contact Christos Paraskevas LLC law firm at email@example.com or call us at +35722432800