Cyprus IBC Offshore Company Information
| Key Company Features | |
| Type of entity | IBC |
| Type of law | Common |
| Shelf company availability | Yes |
| Our time to establish a new company | 5 days |
| Minimum government fees excluding taxation | Not applicable |
| Corporate taxation | 10% |
| Double taxation treaty access | Yes |
| Share capital or equivalent | |
| Standard currency | Cyprus pounds |
| Permitted currencies | Any |
| Minimum paid up | CYP 1,000 |
| Usual authorised | CYP 5,000 |
| Directors or Managers | |
| Minimum number | One |
| Local required | No, but advisable for purposes of tax residency |
| Publicly accessible records | Yes |
| Location of meetings | Anywhere, but Cyprus advisable for purposes of tax residency |
| Members | |
| Minimum number | One |
| Publicly accessible records | Yes |
| Location of meetings | Anywhere |
| Company Secretary | |
| Required | Yes |
| Local or qualified | No, but Cyprus advisable for residency and compliance |
| Accounts | |
| Requirement to prepare | Yes |
| Audit requirements | Yes |
| Requirement to file accounts | Yes |
| Publicly accessible accounts | No |
| Other | |
| Requirement to file annual return | Yes |
| Change in domicile permitted | No |
Setup And Maintenance Costs
Incorporation (Setup) Costs - US$4,500
The fee is all inclusive (company formation, registered office, nominee director, secretary, shareholders, POA for one person and courier delivery). No hidden costs.Annual Maintenance Costs - US$2,400
The fee is payable after the first year and covers registered office address, nominee secretary, director and shareholders. Cyprus companies must file audited accounts. We can provide the service from US$1,000.
Our Cyprus corporate kits are delivered with the following documents:
- Certificate of Incorporation
- Certificate of Directors and Secretary
- Certificate of Shareholders
- Certificate of Registered office address
- Certified true copy of the Memorandum and Articles of Association
- Blank instrument of share transfer by the nominee shareholder
- Declaration of Trust by the nominee shareholder
- Power of Attorney(s) to the beneficial shareholder
- Share certificate(s)
- Company stamp
- Stationery (Letterheads and Invoices)
Company Information
Type of Company for International Trade and Investment Companies incorporated under the Companies Law, Cap 113, as amended, who have obtained Exchange Control permission from the Central Bank of Cyprus to acquire IBC company status.
Procedure to Incorporate
By submission of the Memorandum and Articles of Association to the Registrar of Companies, together with an affidavit before a Court and the appropriate registration fee.Restrictions on Trading
Cannot undertake to the business of banking, insurance or the rendering of financial services to the public unless special permission is granted. Companies cannot trade with resident individuals or companies situated in Cyprus other than in relation to the maintenance of premises, banking and professional services, unless they have special permission from the Central Bank of Cyprus.Powers of Company
The powers and objects of a Cyprus company are contained within the Memorandum of Association and have to be specific.Language and Legislation of Corporate Documents
English and Greek.Registered Office Required
Yes, must be maintained in Cyprus.Shelf Companies Available
Yes.Timescale to Incorporate
Approximately 5 days, subject to name approval.Name Restrictions
Any word that the Registrar considers undesirable. Any name that is identical or similar to an existing company. Any name that implies illegal activity or implies royal or government patronage, the following words or their derivatives: asset management, asset manager, assurance, bank, banking, broker, brokerage, capital, credit, currency, custodian, custody, dealer, dealing, deposit, derivative, exchange, fiduciary, finance, financial, fund, future, insurance, lending, loan, lender, option, pension, portfolio, reserves, savings, security, stock, trust or trustees.Language of Name
Names may be expressed in Greek or any language using the Latin alphabet if the Registrar is in receipt of a Greek or English translation and the name is not considered undesirable.Names Requiring Consent or Licence
The following names or their derivatives: bank, trust, building society, insurance, assurance, reinsurance, their foreign language equivalents or any name that the Registrar considers may have a connection with the aforementioned.Suffixes to Denote Limited Liability
Limited or Ltd.Disclosure of Beneficial Ownership to Government Authorities
Yes, only to the Central Banks of Cyprus where strict confidentiality is legally protected.Compliance
Authorised and Issued Share Capital
The share capital must be expressed in Cyprus pounds. The usual authorised share capital of a Cyprus IBC company is CYP 5,000 and the minimum issued and paid up capital is CYP 1,000. For companies wishing to establish a physical presence in Cyprus, the minimum is CYP 10,000.Classes of Shares Permitted
Registered shares of par value, preference shares, redeemable shares and shares with no voting rights.Taxation
By virtue of special provisions in the Cyprus Income Tax Laws, the net chargeable profits of Cyprus IBC Companies are taxed at a rate of 10%.Double Taxation Agreements
Cyprus has concluded 33 double tax treaties with: Austria, Bulgaria, Belarus, Belgium, Canada, China, the Czech Republic, Denmark, Egypt, France, Germany, Greece, Hungary, India, Ireland, Italy, Kuwait, Malta, Mauritius, Norway, Poland, Romania, Russia, (including most of the CIS countries, i.e. Azerbaijan, Armenia, Kyrgyzstan, Moldova, Uzbekistan and Ukraine), Singapore, Slovakia, Slovenia, South Africa, Sweden, Syria, Thailand, United Kingdom, USA and the former Yugoslavia.Licence Fees
Not applicable.Financial Statement Requirments
Audited financial statements have to be submitted to the Cyprus Taxation Authority and to the Central Bank of Cyprus annually.Directors
The minimum number of directors is One. They may be natural persons or bodies corporate, be of any nationality and need not be resident in Cyprus.Company Secretary
All Cypriot companies must appoint a company secretary, who may be a natural person or body corporate. It is advisable to appoint a resident company secretary.Shareholders
The minimum number of shareholders is One.Holding Companies
Cyprus' a well established international centre, has been critically assessed of constituting an attractive location for holding companies from a tax perspective, among others. This is due to the accession of Cyprus to the European Union (EU) and the enactment of the new Cyprus tax legislation, which is now compatible with the acquis communautaire. Cyprus laws and practices are now harmonised with the EU Laws and Directives, the Code of Conduct and the Organization for Economic Cooperation and Development's recommendation on Harmful Tax Corporation.Tax Regime
Unlike other countries in Europe, a Cyprus Holding Company must only hold at least 1% of the share capital of a foreign subsidiary in order to receive the tax benefits awarded by the new tax reform.New Tax Legislation
A uniform 10% corporate tax rate, applicable to the worldwide income, is now levied on all resident companies from the 1st of January, 2003. This is the lowest corporate tax rate in the European Union and thus the most advantageous standard rate of corporation tax for Cyprus. The new taxation status on Company is residence-based. A company is only 'resident in the Republic' if its business is centrally managed and controlled in Cyprus. Therefore, under the new rules, a resident corporation is taxable on its worldwide income accrued or arising from sources both within and outside Cyprus if it is managed and controlled from Cyprus. In view of the new tax legislation, the Holding International Business Companies operating from Cyprus are now in a much more beneficial position because they can enjoy the benefits deriving from the tax exceptions as well as the corporate tax benefits by virtue of the new tax legislation.Tax Exemptions
50% of interest receivable. In view of the new tax legislation 50% of interest received by corporation is tax exempt, excluding interest received from the recipient's ordinary course of business or closely connected with the recipient's ordinary business.Dividends received
Dividends received from abroad are now totally exempt from corporation tax by virtue of the new tax legislation. Furthermore, they are also exempt from the 15% defence contribution provided that the direct holding is at least 1% of the share capital of the overseas company.Restructuring provisions
In view of the incorporation of the EC Merger Directive 90/434/EEC into the new tax law, there are tax exemptions on the transfer of assets (including shares) under a reorganisation (merger / de-merger / transfer of assets).Gains on shares and Capital Gains Tax
Profits from buying and selling shares are exempt from tax. Furthermore, there is no capital gains tax except for the 20% capital gains tax applying on gains accruing from disposal of immovable property held in Cyprus and shares in non-listed companies, which own immovable property in Cyprus.The profits from a permanent establishment abroad are
exempt from taxation. The exemption does not apply if (i) the Permanent establishment directly or indirectly engages in more than fifty per cent (50%) in activities that produce investment income, and (ii) the foreign tax burden is substantially lower than that in Cyprus.Cyprus Branches of Companies
With the accession of Cyprus in the EU, double taxation relief will be available to all Cyprus branches, of companies resident in other member states in the European Union, since there is no discrimination between the companies' resident in a Member state and the branches of such companies' residence in another member state.Distributions by Cyprus Holding Companies
Dividends paid to non-resident shareholders are exempt from withholding tax. In fact, Cyprus does not impose withholding taxes on payments of dividend, interest and royalties (provided the intellectual property rights are not used in Cyprus) to non-resident recipients.Corporate Tax Benefits
Carry forward of Losses Tax losses for the year 2000 onwards may be carried forward indefinitely. Losses incurred abroad by a permanent establishment of a Cyprus company can be offset against profits of the Cyprus Company. Group relief The Group relief rules are now enacted, providing for group relief of tax losses between a holding Company and its subsidiaries in the event where the Holding Company owns at least 75% of the Subsidiary directly or indirectly and/or otherwise among companies of the same group for the whole year. However, losses brought forward will not be available for Group Relief. By virtue of the said rules a company is considered as a member of a group if it is at least a 75% subsidiary of the other, or both companies are at least the 75% subsidiaries of a third company.Net of Double Tax Treaties
Cyprus combines a low-tax regime with a network of double tax treaties. It has concluded the highest number of double tax treaties compared to any other offshore jurisdiction, particularly with Central and Eastern European Countries and a number of Middle Eastern countries. Most of the Treaties follow the OECD model and all of them have the impact of reducing or eliminating the normal withholding taxes imposed by the Contracting states on dividends, interest and royalty payments. This is beneficial for trade with certain Eastern European Countries and Russia because foreign investors investing in Eastern Europe have the opportunity to channel their investments through a country, such as Cyprus, which has a treaty with the investment recipient country allowing for a reduction and in some cases elimination of the withholding taxes.Conclusion
Cyprus, one of the smallest European low tax jurisdictions, is a suitable place for locating an intermediary company due to the island's combination of tax treaties and low-tax regime. Dividends can flow through the Cyprus company totally tax free and the company can be used to take advantage of the extensive network of double tax treaties.General Information
Cyprus is at the north-eastern end of the Mediterranean Sea at the crossroads of Europe and Africa. It covers an area of 9,251 sq km and lies 65 km south of Turkey, 96 km west of Syria, 385 km North of Egypt and some 980 km south-east of Athens. The principal topographical features of Cyprus are the two mountain ranges running along the centre and north-east of the Island, separated by a wide and fertile plain. Cyprus has a pleasant climate with dry, hot summers and mild winters.
