Investing in a new Cypriot company
Cyprus is an important European business hub providing major advantages to foreign investors such as a low tax haven, a stable economy and a welcoming territory for any type of investments.
The company registration procedure in Cyprus is basically the same for all business entities, having a simple and straightforward structure.
In order to enhance foreign investment intensity, the FDI policy has been liberalized for both EU and non-EU nationals. Subsequently, administrative procedures have been simplified and no limitations apply in most sectors of the economy, as per the minimum level of investment and the foreigners/ participation percentage.
International companies may invest and establish a business in Cyprus on equal terms with local investors. Foreign investors can register a company directly with the Registrar of Companies, and obtain any license, if needed, from the appropriate authority depending on the nature of the investment. Investors may address to the Investors Service Centre of the Ministry of Commerce, Industry, and Tourism for further guidance and direction on a case by case basis.
Furthermore, Cyprus offers one of the lowest setups and operating costs within the EU.
WHY BUSINESSMEN CHOOSE CYPRUS COMPANY FORMATION?
The research made by Worldwide Incorporation Services shows that businessmen tend to choose Cyprus Company Formation for international business and trade. The main reason for this is that Cyprus offers a great number of benefits to businessmen and investors from all over the world, PR Newswire reports.
Here are some reasons why you should consider the idea of a Cyprus company Formation more seriously:
1. Most businesses lose a lot of money through taxes. This is precisely where Cyprus jumps ahead of other countries. In Cyprus, the corporate #tax rate is only 12.5% on net profits. This is quite low considering Cyprus is a part of the #European_Union. As a matter of fact, Cyprus has the lowest corporate tax rate among all European Countries. This is the first and main point that attracts customers to proceed with Cyprus company formation.
2. If you register your company in Cyprus, you will not have to pay any tax on incoming dividends. Likewise, you also won’t be required to pay any tax on the profit made in case you end up selling your Cyprus company shares.
3. One of the many benefits of Cyprus company formation is that you will not have to pay any tax on dividends you might have to pay to people staying outside of Cyprus. If your business is global, you will benefit greatly from this stipulation introduced in Cyprus.
4. Apart from all the aforementioned tax benefits, Cyprus also does not have any inheritance tax or wealth tax.
5. Businessmen can also benefit greatly from Cyprus’s double tax treaties with over 50 countries.
6. Since Cyprus is a part of the European Union one will enjoy the unrestricted flow of dividends and royalties from any EU country.
7. Cyprus does not have any exchange control regulations which is also beneficial for Cyprus company formation.
8. Cyprus’s strategic location and advanced infrastructure allow businesses to grow without any restrictions. With a Cyprus company, your business is located in the EU.
9. Finally, with a Cyprus company, you won’t have to worry about finding the right people to work for you. Cyprus is full of talented people who will be an asset to your business.
CYPRUS BUSINESS COMPARATIVE ADVANTAGES
The comparative advantages which Cyprus offers as an International Business Center derive mainly from:
• Being a Member State of the EU.
• The adoption of the Euro as the official currency.
• The strategic position of the island, at the crossroads of Africa, Middle East and Europe.
• The high educational level of its workforce and versatility in the use of new technology.
• The satisfactory and continuous upgrading of the level of infrastructure, in airports, ports, energy and telecommunications.
• The high quality of consultancy services such as legal, accounting, auditing, etc
• The modern and transparent legal, financial and accounting systems.
• The favorable business climate.
• A fully liberalized foreign investment regime.
• The excellent living conditions for foreigners.
• The close economic and political relations with the countries of the Middle East and of Central and Eastern Europe.
Cyprus has a healthy and robust economy, relying mostly on the services sector.
The Country has been relatively resilient to the current economic crisis and world recession.
The strategic location of the island, the lowest corporate tax in the EU, a highly developed socioeconomic infrastructure, excellent telecommunications, a sophisticated and sound banking system, a wide range of high-quality professional services and a favorable economic and business environment, make Cyprus an ideal center for business activities.
In addition to the above, the wide knowledge of the markets of the Middle East and Central Eastern Europe regions by Cypriot businesses, combined with a large number of International Business companies in Cyprus, constitute a substantial advantage to those who decide to use Cyprus as their base for penetrating markets in these areas.
Are there any specifically regulated sectors or ‘restricted investments’?
In line with the freedom of establishment there are no restrictions on investment by citizens of EU member states other than those applying to specifically regulated sectors, such as banking and finance sectors, where approvals may be required for customer protection purposes, but these apply equally to Cypriots, nationals of other EU member states and third-country nationals. For both EU and third-country investors, restrictions remain on acquisitions in the areas of real estate, tertiary education, public utilities, radio and television stations, newspapers and magazines and airlines. It is characteristic that the Movement of Capital Law 115(I) of 2003 ensures that no restrictions in relation to the movement of capital shall exist, including profits and dividends, from Cyprus to any person in either a Member State of the EU or a third country.
Furthermore, there is no exchange control legislation in Cyprus and residents and nonresidents alike may hold and manage assets and liabilities in any foreign currency in any jurisdiction, including freely convertible and transferable balances on the island. In all but a very few strategic sectors of the economy, namely those perceived to relate to national and public security, foreign investors may now participate with no limits on equity holdings and without any prescribed minimum level of capital investment. In general, foreign investors no longer need approval from the Central Bank of Cyprus and may invest and do business in most sectors in Cyprus on equal terms with local investors.
Is there a mandatory screening of foreign investment?
There is no mandatory screening of foreign investment. Foreign investors can incorporate a company directly at the Registrar of Companies through regulated lawyers (advocates), a procedure identical to that for national residents. Similarly, foreign investors may acquire shares in an existing Cypriot company directly, without prior permission by the Central Bank (which had been the previous regime). Companies are, however, required to make relevant filings with the Registrar of Companies over any change in their ownership.
Are Cyprus’ foreign investors protected in respect to taxation issues?
Cyprus has developed a wide network of Double Tax Treaties (DTT) with more than 45 states, ensuring that the same income is not taxed in more than one country. Most of this DTT follow the OECD Model Convention, while the US-Cyprus tax treaty follows the most recent model of United States Agreements. Amongst a plethora of states that have concluded DTT with Cyprus, are the following countries:
Moreover, Cyprus has laid particular attention to elevating both the competitiveness and the investment protection approach with respect to its shipping sector. It is considered as one of the most competitive shipping centers in the world in terms of registration fees and taxes. No tax is imposed on profits from the operation of Cypriot registered vessels, or on dividends received from a ship-owning company.