Everyone knows the advantage of an offshore company - the absence of taxes, but, unfortunately, such a company is not suitable for every type of activity. Today, many banks close accounts for offshore companies and many partners refuse to work with classic offshore companies. In case your partners are from countries EU or you want to open an account in a stable bank, you need to create a company with a good reputation. It is generally accepted that a company with a reputation is an expensive pleasure. Not at all, and we suggest you consider an alternative option - a Cypriot company that combines the advantages of EU companies and very low tax rates.
Advantages of a company in Cyprus
Registration of a company in Cyprus allows, subject to compliance with minimum requirements and relatively low costs, to obtain all the conditions for creating an international company.
Registering a company in Cyprus will allow you to take advantage of the authorities’ loyal attitude towards non-resident companies and low tax rates. This is another plus in favor of registering a company in Cyprus. It is from the point of view of tax rates that a Cyprus company is very beneficial for the owner. The standard income tax rate is 12.5% of the amount of “net” profit. Value added tax on the movement of goods and services within the EU is 0%. The standard rate for domestic sales is 19%.
The interesting thing is that a Cyprus company is a unique opportunity to avoid taxes on dividends (incoming and outgoing), capital gains, royalties, interest payments. Dividends received by Cypriot companies are fully exempt from taxation in respect of dividends received from foreign corporations, provided that the Cypriot company owns at least 1% of the share capital of such company.
Unlike many European countries, where there is an additional tax when paying to an offshore company, payment of dividends by a Cypriot company is also not subject to taxation. This circumstance makes a company in Cyprus an effective tool in structuring property and allows the active use of any company.
Today, an important aspect of proper work with a foreign company is compliance with the principle “the country of registration of the company must coincide with the country of registration of the servicing bank.” Having a Cypriot company allows you to open an account in a Cypriot bank without any problems. Also, an important aspect of working with this company is the possibility of renting an office or a small workplace to confirm the reality of doing business. Most European banks require the provision of a rental agreement for premises to a company registered in Cyprus.
REGISTRATION OF A CYPRUS COMPANY
Opening a company in Cyprus is not as expensive as it seems at first glance.
Despite the fact that the minimum authorized capital of a Cyprus company is €1,000, the legislation of Cyprus does not provide for requirements for its payment.
The shareholder of a Cyprus company can be either an individual or a legal entity, a resident of any country. Unlike a shareholder, the director of a Cyprus company must preferably be a resident of Cyprus or, in case the company has several directors, the majority of directors must be residents of Cyprus. If you want to obtain a Tax residence certificate, then the director of the company must be Cypriot. Also, to obtain a tax residence certificate, many registrars have limited the issuance of general powers of attorney, and prefer to issue special powers of attorney with a limited list of powers. Issuing just such a power of attorney increases the chances of a Cypriot company obtaining a Tax residence certificate.
According to legal requirements, all companies in Cyprus must have a company secretary, who can be either an individual or a legal entity. The secretary must be a resident of Cyprus. As a rule, the secretary of a Cyprus company is one of the registrar's companies. This is done for the convenience of negotiating with Cypriot government authorities, tax authorities, etc.
Every company registered in Cyprus is required to pay an annual government levy of 350 EUR. This fee must be paid by June 30 of each year. The fee can be paid in any convenient way. On the website of the Cyprus Companies Registry, it is possible to pay fees online using a credit card.
Many clients ask what will happen to the Cyprus company if the duty is not paid on time.
If, for any reason, you did not manage to pay the fee before June 30, then fines are assessed as follows:
From July 1 to August 30, you must pay not 350 EUR, but 385 EUR
From September 1 to November 30, the amount of the fee with a fine will be 490 EUR
If you pay the fee after November 30, the amount of the fee plus the fine will be 500 EUR
Late payment or failure to pay this fee may result in your Cyprus company being removed from the Cyprus Government Register of Companies. Restoration of the company is possible only through the courts.
A Cyprus company is required to maintain and submit annual financial statements. The first financial report together with the audit report can be submitted up to 18 months after the registration of Cypriot companies, after which the report is required to be submitted annually. Our company works only with highly qualified auditors in Cyprus, and in case of controversial issues, all clients of our company communicate with the auditors directly .
CONFIDENTIALITY OF THE BENEFICIARY OF THE CYPRUS COMPANY
Register of Beneficiaries in Cyprus
Starting from January 2020, a single register of company beneficiaries will operate in Cyprus.
Please note that this register will not be open to public access, but only for access by government and fiscal authorities.
Registration of a Cyprus company has the only drawback - mandatory annual financial reporting and the presence of a local secretary. But, if you decide to open a Cyprus company, with the help of professional lawyers and auditors, this disadvantage can easily be turned into an advantage. To maintain complete confidentiality, you can always visit the office in Cyprus of the registrars of your Cyprus company and discuss all aspects of the work. One of the main advantages of a company in Cyprus is the confidentiality of the beneficiary. Unlike most European countries, where the state register is open to public access or nominee service is not provided for by law, when registering a company in Cyprus, it is possible to use the services of a nominee shareholder and/or director of the company. It is the legally provided nominee service that allows you to keep information about the real owner of a Cypriot company confidential.
In addition, you can not only register a company, but also buy an offshore company in Cyprus, and thereby save your time. It is ready-made companies in Cyprus that will allow you to quickly start doing business and quickly sign a contract.
The favorable tax regime and current legislation make offshore in Cyprus an excellent tool for tax planning, and a wide range of agreements to avoid double taxation makes it possible to effectively manage the company, as well as ensure the confidentiality of the owner and the protection of assets.
In addition, you will not only receive a company in Cyprus with an account, but you will also be able to visit the office of the registrar company for a vacation.
New requirements for owners of Cypriot companies. Due Diligence procedure
Today, not only banks check their clients when opening accounts, but also registerors of Cypriot companies are required to collect and store information about the real owners of companies.
What is the client verification procedure, namely KYC (Due Diligence of the client)?
As a rule, each registrar must obtain from its client information about the future activities of the Cyprus company, for what purposes it is planned to open a company in Cyprus, the structure of the company and the origin of the funds of the company owners.
All company participants (director, shareholder, beneficiary, attorney) must provide the following documents:
identity document (passport, ID card)
a document confirming the residence address (registration in the passport, utility payment, lease agreement, etc.)
resume (CV)
bank recommendation in which a personal account is opened.
source of funds, namely:
source of wealth - ownership of movable/immovable property, deposit, ownership of securities, etc., inheritance.
source of funds - wages, dividends, fees, etc.
All information must be supported by documents.
The registrar has the right to request and update information about its clients every 3 months. For this purpose, every legal (advocacy) company has a special employee - Compliance Officer, who has completed government courses and has the appropriate certificate. The responsibility of the Compliance Officer is to collect and verify KYC documents and provide relevant information to government authorities (upon request).
By contacting Maira Consult you can buy or register a Cyprus company in the shortest possible time!
Please note that our company can provide not only services for registering a company in Cyprus, but we can also take an already registered company under the services of Maira Consult.
Also, for all Cypriot companies, we can order and apostille extracts from the state register of Cyprus.
Most often, clients order the following statements for Cypriot companies:
Company Search, which contains all information about the company, the company structure and displays all changes in the company;
Certificate of Dissolution, a document confirming that the company has been liquidate
