Cyprus – The Wisest Choice for Company Incorporation
The past few decades have seen the rapid rise of Cyprus as an internationally sought-after trade and business destination. An enormously beneficial tax system along with international repute for reliability and transparency, something that is often missing from most tax-haven jurisdictions, means that Cyprus has the best of both worlds.
There are the obvious advantages of being a European Union member along with the additional legitimacy provided by being in the OECD (Organization for Economic Co-operation and Development) White-List. The White-List only includes countries which have made firm commitments of transparency and international cooperation for tax matters, thereby solidifying the international reputation of the country and facilitating in smoother tax and trade treaties. Here are some of the main advantages of incorporating your next venture in Cyprus.
Friendliest Tax Regime
Cyprus tax system is one of the most advanced and favourable tax systems in the European Union. While meeting all EU regulations it still caters one of the lowest corporate tax rates in EU at a meagre 12.5%. The provision for Capital Gains Tax is absent except when an immovable property is sold in the country’s jurisdiction. This applies to gains from disposal of qualified securities like listed shares, making them 100% exempt from taxation. There’s no tax liability accrued on disposal of shares from a parent company to a subsidiary. The same is true in case of dividends paid out to the shareholders of the company and for the dividends received by the company from a subsidiary. Withholding tax is exempt in case of interests and dividends and only applicable to royalties when the intellectual property is used within the jurisdiction of Cyprus. Foreign exchange gains are not taxed unless they are a result of trading in such foreign currencies.
Furthermore, there’s no capital gain tax on disposing of an immovable property outside the jurisdiction of the country. There’s no tax of any sort on liquidation of a company owned by a non-resident. There’s also provision for a company to carry the losses forward for immediate five years for set-off. A corporate entity can transfer its domicile without incurring any tax liability at all. Finally, there is no tax on inheritances or gifts.
Double Tax Treaties
One of the ways in which Cyprus is truly unlike all other low tax jurisdictions is its achievement in forming double tax treaties with an enormous number of countries. Double tax treaties protect corporations against double taxation by assuring them the same tax benefits in partner countries which they have in the off-shore country. Cyprus has more than 55 double tax treaties, some of them with the biggest economies like the United States, China, India, United Kingdom etc.
Ease of Carrying Out Formalities
Cyprus offers one of the smoothest & most efficient registration procedures and formalities. Incorporating a company is relatively cheaper, can be done in as few as 5 days and without visiting the country personally. Meanwhile, an EU VAT registration number is available in 2 days. Opening a bank account for a Cyprus Company is unrestricted and can be done in any other country of one’s choice. Another option for the fastest route could be to take over a ready-made company which can start to function and trade in as little as 24-48 hours. Companies are also permitted to have virtual offices and be managed remotely. The process of voluntary liquidation of a company is fairly simple and hassle-free.
Legal Framework & Infrastructure
Cyprus’s legal system is based on common law inherited from the English influence on the country. The state has a sound and efficient legal framework with statutory depth and significant availability of experts in law, and accounting. Thus, making the finest assistance available to the companies. There’s plenty of rich and highly skilled human resource for almost all aspects of conducting a business. In addition to this, the island country boasts state-of-the-art infrastructure like excellent communication systems and world-class banking industry, which are custom developed to facilitate all sizes and types of businesses.
Geopolitics, Language & Culture
Cyprus is located ideally almost at the tripoint of Asia, Africa and Europe. Its location makes way for easy access to important trade routes to several countries in Europe and Asia. Tourists arrive in Cyprus from all over the world. The island has Greek and Turkish as its main languages but a majority of the population speaks functional English conveniently. It also has one of the lowest crime rates in the world and comprises of safe and happy communities.
Schools in the country are renowned for excellent standards and the universities are of international repute. Incorporating a company is one of the ways to apply for a resident visa for two years in Cyprus which then can be renewed. After 7 years of residence, an application can be made for a Cyprus passport, being member of the European Union.
Last but not least incorporating a company in Cyprus also ensures access to the countries wonderful cuisine if one chooses to work from the island.