|(1) MAIN FEATURES OF CYPRUS INTERNATIONAL BUSINESS COMPANIES (IBCs)|
We would like to point out at the outset, that as you may know, an International Business Company, is a private company limited by shares, governed by the provisions of the Companies Law Cap 113, which is identical to the English Companies Act of 1948.
For our clients, we have already reserved a number of company names with the Office of the Registrar of Companies in order to facilitate immediate establishment/incorporation of such an IBC. The available names are:
– The activities of IBCs, other than management are confined worldwide.
– The share capital may belong to shareholders of any nationality.
– Any profit made can be derived from activities anywhere in the world
– Minimum capital of a Cyprus IBC is CYP 1,000 or CYP 10,000 in case a fully fledged office is required. From 01.01.2008 the capital of an IBC should be expressed in Euro only.
– the tax regime applicable form whatever sources is at the rate of 10% on the net profits of the company.
– Dividends paid out of profits taxed at the reduced rates are not liable to any further tax, neither can a refund be made.
– Cyprus IBCs must have a registered office in Cyprus. They are usually structured with nominee directors, secretary and shareholders. The beneficiaries details are confidential and are not placed on any public file. The beneficiaries could be natural persons or corporate bodies. It is through these confidentiality requirements that Cyprus companies enjoy a greater international reputation amongst business persons than companies in other jurisdictions.
– Foreign employees pay income tax at rates from 0 to 6% if working outside Cyprus and receive the salary through Cyprus, and from 0 to 30% if working in Cyprus. Foreign employees working outside Cyprus are totally exempt from Cyprus income tax as long as they receive their salaries in Cyprus.
– No exchange control restrictions regarding movement or operation of foreign currency accounts.
– Duty free allowances are provided to Cyprus IBCs so as to import duty free vehicles, office equipment and other items necessary for their business.
– Like all other Cyprus companies, Cyprus IBCs , are required to have their accounts audited by auditors authorized by the Minister of Finance. The aforesaid audited accounts should be given out to the Income Tax authorities and to the Central Bank of Cyprus.
– Management services of the company including provision of nominee shareholders, directors, secretarial services, as well as special Banking services including operation of bank accounts, arranging letters of credit, invoicing e.t.c.
(origin of non Cyprus Company)
(provision of services by non-Cyprus company)
(Cyprus IBC’s invoice)
B) International general trading can also enjoy the very Low Corporate Tax Benefit. In such an occasion the engagement of the Cyprus offshore company in international trading does not require for the goods be transported through Cyprus, but can be transported directly from the supplier to the purchaser.The goods are transported directly from the supplier to the purchaser and the relevant purchase/sales invoices shall be issued on the name of the Cyprus offshore company, and the profits made under the agreement shall be taxed at the rate of 10%.The money transactions relating to the aforesaid business actions are being made via Bank Accounts belonging to the Cyprus offshore company, held in (interest is not taxable on money deposited and held in Cypriot Banks) or outside Cyprus and can be transferred by
(Cyprus IBC’s invoice)
(origin of non-Cyprus Company)
(supplier/purchaser of the
|(4) ADVANTAGES OF CYPRUS International Business Companies (IBCs)|
|a) a great degree of respectability amongst companies registered in other tax incentive or tax haven countries. (Cyprus is not black listed in any country in the world)b) Cyprus is not considered to be a tax haven or “laissez faire” country but a tax incentive countryc) no withholding of tax on dividendsd) no capital gains tax (except on sale of immovable property situated in Cyprus)
e) freely transferable accounts of any currency may be kept either in Cyprus or anywhere abroad without any exchange control restrictions
f) no exchange control restrictions
g) all expenses incurred for the earning of income as well as annual allowance on fixed assets are allowed as deductions
h) company’s foreign employees working in Cyprus are liable to personal income tax at a rate from 0 to 20% and if working outside Cyprus but receiving their salary through Cyprus at a rate from 0 to 2%
i) the foreign employees are exempt from social insurance contributions
j) the net profits of the company are subject to a corporate tax at the flat rate of 10% and if such profits are derived from dividends received from another Cyprus IBC, then no further tax is payable other than the flat rate of 10% paid only by the distributing company.
This rate is paid irrespective of whether they are managed and controlled from Cyprus or elsewhere
k) shareholders are not liable to an additional tax on dividends over and above the amount of corporate tax paid by the company
l) exemption from stamp duty on any contracts entered into by offshore entities
m) no estate duty on the inheritance of the shares provided the deceased was not domiciled in Cyprus
A Cyprus IBC is entitled to open any external accounts in any currency with any bank in Cyprus but it should open and operate the so called local disbursement account wherefrom all payments of the company in Cyprus (if any) should be effected. Our Firm can arrange the opening of such A/C (or A/Cs) with ANY Cypriot Bank
We are also at your service to arrange the opening of bank accounts with any other Offshore Banking Unit operating in Cyprus.