Cyprus is one of the most famous resorts, but businessmen know this country as a zone in which you can open a company to reduce taxation. There is no need to have a huge amount of start-up capital – 2 thousand euros is enough to register here.
The advantages of opening a company in Cyprus:
- the lowest tax rates in all of Europe (about 12.5%);
- avoidance of double taxation;
- access to profitable cooperation with European partners;
- there is no need to pay taxes on dividends paid to shareholders who are residents of Cyprus.
Registration of offshore companies in the Cypriot territory allows you to register any form of activity – partnerships, LLCs, or branches of companies owned by foreigners. Most often, LLCs are registered here with the ability to conduct international commercial activities.
Requirements for opening an offshore company in Cyprus
Several requirements apply to those wishing to open an offshore company in Cyprus. Compliance with these requirements is imperative for everyone. The first condition concerns the name of the future company, which must be approved by the registrar. It is impossible to register names that sound similar to those already in force, or those that may be misleading. We are talking about the prohibition of the use of names of well-known brands and brands, as well as religious messages.
The second condition concerns the availability of capital. Its size is determined only by the minimum limits, and there are no restrictions on the maximum amount in euros. Share capital is classified into authorized and issued. The first is indicated during registration, the amount can be changed at a meeting of shareholders. The second is allowed for operations. Any person, regardless of citizenship, can become a shareholder.
The next condition is the presence of a manager (director). It can be an individual or a legal entity from any country. The best option would be to nominate a Cypriot citizen as the head, and then the company will enjoy the benefits of tax benefits in the country. Additionally, the staff must have a secretary who can provide information to the citizens of Cyprus about the activities of the company. On the island of Cyprus, an offshore must have an office, otherwise, the registration authority will refuse to process the documents. All data about the company will be stored in electronic files on a confidential basis – they are not available even to the judicial authorities of the Russian Federation.
Every company registered here is charged a small fee annually, the due date is June. There is a penalty for late payments, the amount of which is reviewed every year.
Cyprus offshore and taxation
The current taxation of offshore companies in Cyprus is considered to be the most thoughtful and fair to the owners of companies. Taking into account the nature of the registration, the status of the company can be non-resident or resident. Tax residents run the company directly in the country. This requires that the board of directors is attended by persons with local citizenship.
The agreement on the avoidance of double taxation is fully valid here and applies to 48 countries, including Russia. Firms that are not residents of Cyprus are exempt from income tax if they are received outside the zone to which Cyprus offshore applies.
Among the taxes to be paid here are the following:
- income. Charged from persons with income in the country. Legal entities pay 10%, and when selling property, 20% is charged;
- stamp. Charged for any transactions, including registration and purchase of shares. The amount is 2 cents;
- for the issue of shares. Established concerning LLC;
- for the social fund of unity. Provided for citizens who are paid wages in the country. The amount does not exceed 2% of the funds received during the reporting period. If foreigners work for the company, no tax is levied;
- VAT. Paid for each product sold or service rendered in Cyprus. There are 3 options for the VAT rate – standard (up to 15%), reduced (5%), and zero.
You can buy an offshore company in Cyprus or register a company from scratch, and each case has its own advantages and characteristics. Buying a ready-made business is much more expensive, so it is not used so often. With regard to registration, a number of activities have to be completed:
- Choose a suitable name. According to local laws, 2 organizations with the same name cannot function in the country. Therefore, if the chosen name is already listed in the state register, you will have to come up with something else. A compliance check is carried out within 2–3 days.
- Legalization of corporate documents. The process takes about a week.
- Opening an account for a company in a local bank. The procedure lasts about a week, but the details are usually issued a day after the application was submitted. Despite the presence of the details, it is impossible to carry out financial transactions until the official opening of the current account is confirmed.
- Choosing a legal address in the country.
After that, it remains only to wait for the receipt of documents confirming the registration of the company. This is the Charter, a set of certificates and a set of seals for them.