Cyprus Tax Haven. Benefits of Opening a Company in Cyprus
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General Information about Cyprus Tax Haven
Cyprus is a popular tourist destination island to millions of people every year. The island is found in the Mediterranean Sea and is popular for its wonderful weather and beautiful white sand beaches. Cyprus is also a very well developed country with an admirable offshore financial sector that attracts a lot of foreign investors. Being a member of the European Union, Cyprus has the capacity to offer businesses and individuals a variety of services including company formation and offshore insurance.
The greatest asset that attracts financiers to Cyprus is its tax haven. Cyprus tax haven attracts businesses and individuals to transact in the island. Various businesses and investors come to Cyprus to benefit from its low taxes.
Why is Cyprus a tax haven?
Cyprus tax haven has been a great attraction to many foreign investors. The country’s stable economy and strict laws that protect the financial sector enables investors to benefit from this tax haven. Other factors like having a simple company registration process also makes Cyprus the go-to place for thousands of businesses and individuals.
Having established itself as an internationally recognised financial centre, the country offers a corporation tax rate that cuts across. Both foreign and local companies adhere to this tax rate. All businessmen and individuals want financial plans that will considerably reduce their expenditure and enable them to save in a secure economic environment.
Here are some of the terms that have made Cyprus tax haven:
1. Unless for purposes of a criminal investigation the anonymity of companies and individuals transacting their money in Cyprus tax haven is closely safeguarded. Personal information and other details are only shared with local banks upon opening of an account. However, these banks do not have the liberty to share this information with third parties. People outside Cyprus can also not access this information.
2. Cyprus made tax treaty agreements that enable businesses to get reduced tax rates. They country has made over 32 tax treaties that enables them to bargain for better taxes when carrying out transactions in these countries.
3. If you run an international company which is not considered a resident company in Cyprus, then you will not pay any tax. Thus, the zero tax rules apply to your company. Companies which have their operations and management outside Cyprus are the only ones allowed to enjoy this advantage.
4. No tax charges are made to companies conducting amalgamations, acquisitions, reorganisations or mergers. This process can be carried out successfully to the end without the companies suffering any tax implications.
5. Businesses and individuals need not worry about tax-losses. In Cyprus Tax Haven, these tax losses can be carried forward to a later date when the business can pay against profits.
6. Foreign companies are allowed to open up bank accounts in any currency within Cyprus. This lack of restriction on foreign currencies makes Cyprus a preferred investment destination in comparison to other countries. This also means that companies and individuals will not lose their money due to currency exchange.
7. Foreign companies and individuals only pay a tax of 12.5% of their net profits. International companies that are resident in Cyprus enjoy the double tax treaty.
8. Under specific conditions international companies operating in Cyprus do not pay tax for dividend income.
9. Payment of royalties, dividends and interest by foreign companies and individuals does not attract any withholding tax.
10. Foreign companies that earn profits from businesses that run abroad o not attract a corporation tax on their profits when they deposit their money in Cyprus.
11. Individuals and international companies are exempted from paying gains tax. However, this law does not apply to money they make when they sell immovable property that is located within Cyrus.
12. For companies that function as a cohort and can be referred to as a group company, Cyprus offers group relief. Group relief entails one company can set off losses for another company within the same group against its taxable profits.
13. Cyprus residents do not have to pay taxes from profits they make from shares they have disposed off.
Benefits of Cyprus Tax Haven
There are a variety of benefits of undergoing a company formation in Cyprus. Businessmen and companies are always looking for ways to cut down on the costs involved in carrying out business processes. Some of the benefits of doing a company formation in Cyprus tax haven include:
– The fact that Cyprus is a tax haven is already an advantage for companies who are looking to undergo formation. A Cyprus company will be liable to tax exemptions and other privileges enjoyed at Cyprus tax haven.
– Being a member of the European Union, Cyprus enjoys a number of advantages. As an EU country, Cyprus has the freedom to move capital. There are also a number of other regulations, treaties and directives that benefit a Cyprus company. This factor attracts investors to the country especially those who carry out most of their activities within Europe.
– Cyprus has a clean sheet with all countries including OECD. Even countries known to have strict jurisdiction offer Cyrus beneficial treatment because of its clean financial record. This works to the advantage of any company which undergoes formation to become a Cyprus company. Unlike other countries which had previously assumed to be tax havens only to later develop a negative stigma, Cyprus continues to offer the much needed safety and stability it promises.
– In compliance with American and European Union standards, Cyprus has developed its legislative framework against money laundering. Harmonizing it with that of the USA and EU, the framework applies beyond boarders. This factors has enables Cyprus to wade of businessmen who have a bias to illegal dealings. criminals tend to shy away from Cyprus because of its elaborate financial system that has no place for criminal businesses and transfers.
– Cyprus’ remarkable tax system has assured companies from all over the world that it is the best place to undergo company formation. Cyprus has gone further to develop a task force to ensure that all the rules and regulations related to tax systems apply to all transactions within the country. The Unit for Combating Money Laundering works together with the Central bank, the exchange commission, Cyprus securities and the Cyprus bar association.
– Companies that undergo formation in Cyprus enjoy a low income tax rate of 12% on their global trading income. 10 – 15 days after companies have undergone formation according to the Cyprus Tax Authority, the companies are handed a tax residency certificate.
– Companies which undergo formation in Cyprus have the privilege of remaining anonymous in their dealing. Businesses which for one reason or another prefer to stay anonymous choose to become a Cyprus company. Under an international trust, companies have the power to own property and operate in anonymity.
– Individuals who benefit directly from a company can also choose not to be named as shareholders of the company. This factor also attracts many businesses to undergo formation in Cyprus. The individual owner is therefore protected from dealing directly with issues affecting the company. The responsibility of running business operations is solely left to the directors of the company.
– The fact that Cyprus has not changes its tax rates since 2004 is encouraging to any company looking to undergo formation in the country. This stability assures a company that they will not meet unpleasant surprises in the future after undergoing formation. This assurance helps a Cyprus company to plan ahead while expected only few eventualities in terms of fluctuating tax rates.
These are just of the few benefits that companies will enjoy when they undergo formation in Cyprus. Depending on the kind of business that a company is involved in, they are also liable to many more benefits. Cyprus tax haven has proven to be the best destination for international companies looking to undergo formation.
Who can benefit from tax benefits in Cyprus
Both residents and non-resident companies consider Cyprus a tax haven. Resident international companies enjoy double tax treaties. Non-resident international companies do not enjoy this benefit. A company is considered an international resident company when it has its management and operation in Cyprus. On the other hand, a company is considered a non-resident international company when its management and operations are not within Cyprus.
A Cyprus company that sets up offices within the country is allowed to bring its staff. The foreign staff will be awarded work permits to work within the country. However, foreign staff is only allowed to take high positions within the foreign company if persons with similar skills cannot be found within Cyprus. The foreign staff working in such a company will be liable to tax. For non-resident employees that have not lived in Cyprus for more than 183 days will be taxed using normal tax rates. These are the rates that apply within Cyprus. This tax will only apply to only the money they make while they are within Cyprus.
The terms of employment of the members of staff will also determine whether they will pay tax within Cyprus. If the person is employed from another country but deployed to work in Cyprus, then they will not pay tax. Cyprus has proven to provide a good working environment for expatriates. This is also a factor that encourages companies to undergo formation within Cyprus.
Other benefits of Cyprus Tax Haven
Apart from the tax benefits of undergoing a formation in Cyprus, companies can also enjoy other advantages of carrying out business transactions in the country. Cyprus is strategically located as a great financial resource. Getting a company to operate from Cyprus expands the potential of a business to countries within EU and the USA.
The government of Cyprus has also provides a very conducive environment for companies to run their businesses. This assures investors that they have little to worry about. Foreign companies are assured of being protected from harassment and imposing of heavy taxes. Companies are also assured that any expatriates they hire will enjoy a good working environment. Companies also have the confidence of importing their own expertise for high positions. The transparency that has been ensured on the tax systems of the country indeed defines the country as a tax haven.
Cyprus tax haven continues to grow as many more companies set up their companies in the country. Individuals are also not worried of saving their money in Cyprus. Cyprus will continue to have a competitive edge if it maintains its tax system. A good tax system is one that benefits a country but at the same time does not victimize businesses.
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Services related Cyprus Tax Haven | Setting Up a Company in Cyprus
Worldwide Incorporation Services provides the following services related Cyprus Tax Haven | Opening of a Company in Cyprus:
- Set Up a Company in Cyprus
- Registered Office Services
- Secretarial Services
- Nominee Shareholder / Nominee Director
- Opening of Bank Accounts in Cyprus
- Full Cyprus Offshore Company Administration Services
- Mailing Address in Cyprus
- Virtual Office in Cyprus
- Book Keeping & Audit
- VAT Registration
- EORI Registration
- Trademark Registration
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