Generally speaking, there are many advantages to having a Cyprus company structure created:

The rate of corporate tax in Cyprus stands at 12.5% and it is one of the lowest in the European Union;

Tax Benefits are offered / expected under all of the following circumstances:

• For non-domiciled employees with a minimum required salary of EUR 55.000 per annum, a 50% tax exemption for 10 years is expected to be granted;
• A 50% tax exemption for investment in certified innovative companies to corporate investors is expected to be granted;
• An increased deduction of 120% for research and development costs is expected to be granted;

There is Nil imposition of withholding taxes on the outbound dividend and interest payments;

Dividend incomes are exempt from corporation tax, unless they classify as hybrid instruments;

Cyprus companies are exempt from taxation on foreign exchange (FX) gains, with the exception of FX gains arising from trading in foreign currencies and related derivatives;

Profits from permanent establishments situated outside of Cyprus are exempt from corporation tax (subject to conditions);

A Cyprus company under the IP Box regime can have an effective tax rate of up to 2.5% on income derived from intellectual property;

Eligible companies which enter the fast-track mechanism are able to hire non-EU staff and obtain work permits for employees;

The share capital of the company does not have to be fully paid in cash at the time of incorporation – it can be paid up at a later stage;

Cyprus does not impose income or capital gains on profits and gains derived from the disposal of securities, irrespective of whether the profits and gains are considered to be of revenue or a capital nature;

An EU VAT registration number can be obtained within 48 hours;

Since Cyprus is an EU Member State, the company structure will automatically qualify as an EU company, and as such it is acceptable by all countries and serious companies in the EU, and of course all over the world;

Annual corporate and maintenance costs are quite low; we offer a very comprehensive management package which includes administrative, legal and accounting services;

A company incorporated in Cyprus is eligible to establish a banking relationship with any financial institution provided that the Company complies with the internal policy of the Bank it is introduced to and the regulatory framework of the jurisdiction the Bank is established at;

A company can be incorporated without having to physically visit Cyprus, even if one is going to be a Director;

A virtual office can be maintained in Cyprus as the business headquarters of the company, with a dedicated telephone line, fax, email account and office space to meet clients;

A Cyprus company can be closed down under several procedures;

A Cyprus company can be managed remotely, from the comfort of one’s office, in their own country;

Incorporation of a Cyprus company gives the right to the (third country nationals, not EU citizens ) Real Owner and employees to relocate to Cyprus and obtain a long stay visa for two years (renewable) and a work permit if they have physical offices and operate in Cyprus;

Family members can get a family reunification visa for one year and this can be later renewed for 2 years at a time, and in 7 years this might be renewed to a Cyprus – EU passport; However, there is currently a proposal under revision for a new law, which will give third country nationals the right to apply for a Cypriot passport within 4 years’ time if they speak Greek, or within 5 years’ time if they don’t. The law has not been voted yet but is under review;

A Cyprus company can be re-domiciled abroad to any other country;

Cyprus has signed dozens of Double Taxation Avoidance Treaties all over the world;

If you need to relocate to Cyprus, you will enjoy a beautiful country with a mild climate, no crime rate, hospitable population, plenty of human recourses for your needs, and a fantastic cuisine.

The information provided by A.G. Paphitis & Co. LLC is for general informational purposes only and should not be construed as professional or formal legal advice. You should not act or refrain from acting based on any information provided above without obtaining legal or other professional advice.

For more in-depth and professional information on Cyprus Company Formation and on the different types of Cyprus Company Structures available, please contact us.