Cyprus

Situated in the eastern Mediterranean, Cyprus is often but by no means exclusively used for business emanating from Europe, Africa and the Middle East.

Although the official language is Greek, English is widely spoken, particularly in business.

Largely based on UK company law, the main feature of Cypriot company law relating to International Business Companies (IBCs) have been as detailed below. 

It must be remembered however that the special tax status of “offshore” companies has now largely ceased with Cyprus’ ascension to the EU.An IBC is taxed according to the same principles as a regular company.

With EU membership there is the exchange of information between Cyprus and other EU jurisdictions as well as the signing of further double tax treaties with OECD member countries.

Capital

-The minimum share capital requirement for an offshore company is C£1,000  however a minimum capital of C£10,000 is required if the company intends to  have any of the following:
         i)a working office in Cyprus,
         ii)duty-free facilities for either the company or its employees,
         iii)temporary work permits for its expatriate employees.

-Shares must have par value and be denominated in Cypriot pounds.
-Companies must have at least two shareholders although they may have the  same beneficial owner.
-Bearer shares are not permitted.
-In the past, where the shares were held either by nominees or by a trust,  beneficial ownership had to be disclosed to the Central Bank of Cyprus and a  foreign (non-Cyprus) bank reference provided.With the implementation of the  new tax measures, the identities of beneficiaries have to be disclosed to the  tax authorities when the company is registered or change of ownership takes  place.
-Annual general meetings of the shareholders are required.

Officers

-The minimum number of directors is one.
-Corporate directors are not permitted.
-Meetings may be held anywhere in the world.
-A Company Secretary (either individual or corporate) must be appointed.
-Annual returns must be filed.
-Audited annual financial statements must be filed with the Central Bank of  Cyprus along with their Greek translation.

Incorporation

-As the name approval process takes a week, incorporation can take up to 3  weeks.There is, however, an acceleration process for which extra fees are  charged.
-The company must have a registered office in Cyprus.
-Company names in any language are permitted.Restricted words include
 “Royal”, “King”, “Queen”, “Commonwealth”, “Bank”, “International”, “Saint”.

Taxation

With the Income Tax Act No.118 (1) of 2002, a uniform 10% corporate tax rate has been introduced for both onshore and offshore companies.Offshore companies in existence before the end of 2002 can use the previous 4.25% corporation tax rate until 2006 if they wish but they must not trade in Cyprus.

Cyprus has a network of double taxation treaties with a large number of countries including North America, some of Scandinavia, many EU countries, eastern European countries and Russia.Where there is no treaty, relief is unilaterally applied by Cyprus in that foreign tax is an allowable deduction against local tax liabilities.

There are no exchange controls for offshore companies.

Useful links : Cyprus Government - http://www.cyprus.gov.cy

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