Cyprus

Cyprus Managed

Synopsis

Cyprus is divided into two parts; the first is the internationally recognised southern half of the island, which is ethnically Greek dominated whilst both native Turkish Cypriots and immigrants from mainland Turkey populate the northern second half of the Island. This leaflet refers to the former Greek part of the Island. Whilst SCF Accountancy & Law provides basic Cypriot incorporation services (with or without management) it is the managed companies that are of greatest interest as they provide both protection against other countries anti- avoidance provisions and yet benefit from the universal corporate tax rate of only 12.5%. Obviously, given its size and location Cyprus is not a realistic competitor to the Republic of Ireland but in its specialist fields of exploiting its unique double taxation treaty network with Eastern Europe and ironically its tax treaty with Ireland it is second to none.

Economic Crisis, Managed Companies & Banking

There is no doubt Cyprus suffered greatly during the Euro Crisis of 2013 with its banking community's reputation probably being irredeemably compromised due to the 'haircut' being imposed on depositors and not just on stakeholders as in the other peripheral EU member states. Nevertheless, it must be remembered that it is still part of the EU and fully benefits from EU directives and regulations so can still garner significant tax planning benefits especially as management and set-up costs are still lower than in Luxembourg or Ireland. SCF Accountancy & Law however does not recommend the use of domestic Cypriot banks for sums over €100,000.00 (Covered by the State Banking Deposit Guarantee) and suggests that Cypriot companies use external banking facilities. At the time of writing the Cypriot population stood at around 800,000 with a physical mass of 9,250 sq kilometres (Figures relate to the Island of Cyprus).

Star Rankings

Corporate registration efficiency

3

Cost

5

Confidentiality

4

Local Banking facilities

2

Legal system

5

Political stability

4

Reputation

4

cyprus

Location

Cyprus is located in the extreme south-east of the Mediterranean physically closest to Turkey, the Lebanon and Israel.

Tax Planning Credential

Managed Cypriot Limited Companies

The key benefit of Cypriot limited companies is that once they are properly managed and controlled in Cyprus they will benefit from the indigenous corporate tax rates of only 12.5% plus of course the aforementioned excellent double taxation treaty network which the excellent tax treaties with Eastern Europe inherited from their pre-European Union membership days when the relationship with the old COMECON countries was paramount. In addition, Cyprus offers excellent merchant naval registration facilities and in fact has one of the largest merchant navies in Europe. It is of course far cheaper using a managed company provider like SCF than establishing one's own Cypriot office.

Uses for the Cypriot Tax Treaty Network

As stated, Cyprus has a uniquely favourable set of tax treaties with most East European countries (including those that have become recent EU accession states), which can provide for very tax efficient inward investment into these countries including tax exemption for building projects, few or no withholding taxes etc. In addition, the Cypriot tax treaty signed with Ireland in 1973 provides an ideal way for a Cypriot company to funnel surplus profits back into the West as Ireland has an excellent tax treaty network with most significant western and developed countries. For individual fiscal migrants to Cyprus many tax treaties provide a very favourable tax treatment for 'imported' income and capital especially where pensions are concerned.

Companies

Apart from the United Kingdom, the Republic of Ireland and Malta, Cyprus is unique in using the corporate friendly common law system. This means that both British and Irish clients will feel very much at home with all the standard Cypriot legal documentation especially as they are in English and English is the standard language used in business in Cyprus.

Benefits

  • Pro-business environment
  • EU Member State benefiting from all EU Directives
  • VAT Rate of 19% (2014 onwards)
  • Highly developed corporate and general law.
  • Good communications.
  • Active and positive member of the European Union.
  • The Euro is the local currency
  • Partnerships can be used to further mitigate tax
  • Excellent double taxation treaty network.
  • Highly educated population
  • Major merchant naval jurisdiction

Double Taxation Treaty Network

The key benefit is that Cyprus has an extensive and very favourable tax treaty network with most East European countries despite its very low corporate tax rates. It is also an ideal base for many consultancy and small to medium sized trading companies.

Administration & Accountancy Services

Managed Cypriot Company

The key service offered by the SCF Accountancy & Law is that of a fully managed Cypriot company where-by we can register your Company, act as the daily legal and accountancy administrators, liaise on your behalf with the Revenue, Cypriot Company House, maintain the registered office, company minutes and in fact everything necessary to provide you with a fully functional VAT registered Cypriot company including quarterly VAT returns, online banking, management and meeting rooms etc. – In fact, our Cypriot services are totally bespoke according to your needs.

Our Range of Fully Managed Company Services

  • The appointment of a qualified accountant to act as Company Secretary
  • The opening up of a bank account for your company with access provisions agreed by SCF, the bank and of course the beneficial owners
  • A Full Management Agreement setting out the rights and obligations of all parties
  • The provision of a Cypriot registered office address for service of process and official mail
  • The application and obtaining of a Cypriot VAT number for your company
  • The maintenance of all requisite company minutes, ongoing companies registration office submissions, annual returns and AGM preparation
  • The annual submission of the Annual Assessment of Tax Form
  • The management of the company's VAT submissions, payments and VAT reclamations on a monthly or quarterly basis
  • The maintenance of the company's accounts supported by a quarterly ready for the submission to the Revenue Commissioners including the corporate tax calculation. Accountancy will be maintained in either SAGE or Quick Books format
  • The appointment, if required or appropriate, of auditors
  • Advice on general Cypriot tax mitigation and the company's maintenance by a dedicated company accountant

Set-Up & Annual Maintenance Fees

Please see separate SCF Accountancy & Law Cyprus Fee Quotation

The Fully Managed Cypriot Company & Trading Office Package (Optional Extra)

This Package is identical to the Fully Managed Cypriot Company Package save that it includes SCF providing the day-to-day trading, telephone answering, website management (if required), order reconciliation, invoice issuing and trading office facilities for your Cypriot company operation which can be made bespoke to your exact needs all at a fraction of the cost of setting up and maintaining you own office in Cyprus.

For more details please contact an SCF Consultant