|Cyprus is an island situated at the North-Eastern corner of the Mediterranean Sea at the cross-roads of Europe and Africa. It lies some 385 kilometers north of Egypt and some 980 kilometers southeast of Athens. The population of Cyprus is approximately 750,000 + inhabitants. Greek Cypriots form the largest ethnic community followed by the Turkish Cypriots. Cyprus became an independent republic in 1960. Greek and Turkish are the official languages although English is widely spoken and understood, particularly in government and commercial sectors. All statutes regulating business matters and procedure are based essentially on English Law. Most laws are officially translated into English. The basic unit of currency is the Cyprus pound (1.75 CYP equals US$1). The Turkish lira (TRL) is the currency of the island’s Turkish sector. Cyprus has been a full member of the European Union since 2004 and adopted the Euro as its currency in 2008.
Cyprus has a long history as an International Financial Center. Cyprus is an OECD white listed country.
The economy of Cyprus is based on a free enterprise system. Agriculture and manufacturing provide the largest portion of the income for the national economy. Tourism is also an important source of income.
Cyprus enjoys the lowest corporate tax rate in Europe – there is a 10% corporate tax levied on the resident companies based on the worldwide income. Although Cyprus companies fully owned by foreign companies are not subject to this tax.
Cyprus has an extensive range of Double Tax Avoidance Agreements (DTAA) with a large number of countries (44), especially within the European region and including India.
Capital Gains tax arises only on property situated in Cyprus. Transactions where the subject matter is situated outside Cyprus are exempt from taxation.
International businesses may be operated in Cyprus under a number of legal structures
- Cyprus Company – the most widely used corporate vehicle
- International Trustee Services Company
- International Financial Services Company
- General or Limited Partnerships
- Branch of an overseas Company
A Cyprus International Business Company (‘IBC’) is defined as an otherwise normal Cyprus company which is owned by non-residents of Cyprus and does business exclusively outside the island. Cyprus companies can have either a resident and non-resident status.
Highlights of Cyprus
- Strong reputation in the international market
- Favorable tax laws in respect to off-shore transactions
- Extensive double taxation agreement (DTAA) with other countries
- Confidentiality on beneficial shareholders and directors information through use of nominees
- Well developed professional infrastructure and financial services sector
- Establish reputation globally
- No exchange controls
|Type of Company||IBC (Private Ltd and Public Ltd)|
|Minimum Director||One (has to be resident of Cyprus for tax benefits)|
|Bearer Shares Permitted||No|
|Disclosure of Ownership||Yes (although use of nominee shareholders allowed)|
|Disclosure of Directors||Yes (although use of nominee directors allowed)|
|Corporate Seal Required||Yes|
|Annual accounts filing||Yes|
|Annual returns filing||Yes|