Cyprus

Cyprus Non-Resident

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, which in the case of Cypriot non-resident companies in effect means that management takes place outside of Cyprus and hence is not subject to Cypriot corporate tax or VAT rates. However, on the negative side such companies will also not benefit from the protection afforded by the Cypriot double taxation treaty network or indeed its membership of the European Union and hence EU directives such as the parent subsidiary directive 90/435 for dividends and 03/49 for interest. In fact, the vast majority of Cypriot non-resident companies are managed from zero tax locations and are therefore tax free entities albeit (which is generally considered a positive) still subject to Cypriot company law and accountancy submission requirements. It is interesting to note that other common law jurisdictions such as the United Kingdom and the Republic of Ireland no longer offer non-resident companies leaving only Cyprus and Israel as regional contenders.

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 Cypriot non-resident companies are by definition non Cypriot based and indeed are required to have banking carried out outside of Cyprus so non-resident companies are totally protected from the Cypriot banking system.

Star Ratings

Corporate registration efficiency

3

Cost

5

Confidentiality

4

Local Banking facilities

5

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

Cypriot non-resident companies are ideally used as holding companies for intellectual property or shares in other companies where tax treaty or EU directives/regulations are not necessary. The key benefit of a Cypriot non-resident company over and above a traditional offshore or tax free company is that unlike the latter they can be upgraded to a fully managed Cypriot company should circumstances demand in the future. It is this inherent flexibility and relatively initial low cost that continues to make them popular even after the recent Cypriot financial crises.

Non-Resident Companies

Apart from the United Kingdom, the Republic of Ireland and Malta, Cyprus is unique in using the corporate friendly common law system in Europe. 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

  • Tax Free
  • Protected by the Cypriot common law system
  • More prestigious than traditional offshore or tax free companies
  • English is the primary business language
  • Non-resident companies can be upgraded to fully managed companies benefiting from the Cypriot double taxation treaty network and EU directives and regulations
  • Good communications.
  • Active and positive member of the European Union.
  • The Euro is the local currency

Double Taxation Treaty Network

Not applicable for non-resident companies

Administration & Accountancy Services

SCF Accountancy & Law can provide a full set of non-resident director and secretarial services in a number of tax free jurisdictions. In addition, SCF Accountancy & Law can maintain any and or all company accounts, which it should be noted are a legal necessity even if there is no tax obligation in Cyprus.

For more details please contact an SCF Consultant