Cyprus

Predominant features and benefits of utilising Cyprus IBC:

  • A limited Liability Company is the most popular type of Cyprus offshore companies.
  • Local companies and International Business Companies are taxed at the same corporation tax rate, the lowest corporate Income Tax in Europe of 12.5%.
  • Cyprus resident an International Business Company (IBC) will pay a tax of 12.5% on its net profits. An IBC is resident if its management and control is in Cyprus. Management and control is usually determined by the place of residence of the majority of the directors and the place where board meetings take place. Full advantage of the Cyprus double-tax treaty network can be taken by resident IBCs.
  • Tax Exemptions: the following are exempt from corporate income tax in a while amount: Interest income arising in the ordinary course of business including interest closely connected with the carrying on of the business, and interest earned by open-ended or close-ended collective investments schemes, is not considered interest income and is not exempt; Dividend income/ Gains from the disposal of securities including the redemption of units or other ownership interests in an open-ended and closed ended collective investment scheme; /Profits from permanent establishments maintained outside the Rep. of Cyprus / Rent of Preserved building.
  • Deductions: All expenses incurred wholly and exclusively for the production of income are deductible from taxable income, including: Interest incurred for the acquisition of a fixed assets used in the business/ Expenditure for the maintenance of buildings under preservation order/Donations/Profits from exploitation of products of intellectual property (%80), Employer’s contribution to approved funds on employees’ salaries.
  • The confidentiality and anonymity of beneficial owners is effectively protected (their true identity is only disclosed to local banks if a local account is opened. No information is disclosed to any third parties, except in the case of a duly authorized criminal investigation (into drugs, terrorism, etc.)).
  • It is not necessary for you to come to Cyprus to establish your International Business Company if you employ nominee services. Nominees can also open bank accounts on your behalf.
  • If you do not use nominee services, you will need to come to Cyprus to incorporate a Cyprus IBC. This is another reason why it is advantageous to use nominees.
  • There is no minimum capital requirement. The money for the company’s share capital does not have to be paid in a bank account of the company.
  • Advantageous tax regime for Cyprus holding entities, including no tax on consolidation. When a Cyprus holding company disposes shares to the subsidiary or another one of the associated companies there is no tax liability.
  • No taxation on inward or outward dividends and no Capital Gain Tax (CGT) on sales of securities.
  • Entities are required to file every year and have an audit completed.

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Taunton Somerset
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