Company registration on Cyprus
The offshore company registration on Cyprus is especially popular among Russian and Ukrainian residents. This is due to the close geographical location and popularity of this place among CIS residents as a resort. Low taxes made this islandic state a very demanded place for offshore company registration and allocation of capital. The fact that Cyprus became first country, where Russian citizens can register their offshore, also played its role.
Cyprus is not a classic offshore jurisdiction with complete lack of taxes. But among European countries it has the lowest income tax. Since 1997 the tax rate has been slightly higher than 4%. After Cyprus joined EU, the rate increased but still remained the lowest in the region.
The main establishers and shareholders of the companies-offshores on Cyprus are citizens of Eastern and Western Europe and CIS countries. This is due to the fact that there is an agreement between these countries and Cyprus about avoidance of double payment of taxes. This means that by paying a tax at low rate on Cyprus, the company is completely dismissed from paying taxes in its own country. Among other advantages of Cyprus as an offshore zone are the following:
- Size of minimal charter capital is not regulated;
- No control of foreign exchange operations;
- Data confidentiality.
Cyprus legislation is aimed at attraction of foreign capitals and creates beneficial conditions for commercial activity. Offshore companies are liberated from dividends taxes, percentage taxes and some other taxes.
Peculiarities of registering offshore companies on Cyprus and requirements to its registration
Commercial activity of Cyprus was greatly influenced by its entrance into EU. The legislation in this area strives to make the business activity as transparent as possible. Every offshore company on Cyprus has to provide to corresponding bodies the annual audit report. The term from registration moment to provision of the first report like that should not exceed more than 1,5 years. The offshore companies have to take this requirement very seriously- for not following it there is serious liability and even criminal responsibility.
Anyone can register an offshore on Cyprus- there are no requirements concerning residentship of directors and shareholders. It can be an individual or legal entity. The registration procedure is standard and takes from few days to few weeks. There has to be minimum one director and one shareholder in the registered company. The secretary is compulsory, and if there is only one director, he cannot combine the two positions. The optimal choice for the company is to find a local secretary, whose responsibilities will include timely provision of necessary records to the local control bodies from the name of the company.
Financial situation on Cyprus has been unstable lately. Financial crisis of 2012-2013 has significantly reduced credibility of Cyprus as an offshore zone. For a period of time the bank system activity of the country was stopped and all accounts frozen. Due to the liquidation of a number of banks and few government decisions, many foreigners lost part of their capital. Today the offshore company registration on Cyprus causes certain anxiety among many entrepreneurs. In order to avoid any problems, obtain full consultation and support while registering an offshore abroad, including Cyprus, contact our company Goldblum and Partners.