RM offers incorporation services and ongoing company management in Cyprus. We provide readymade shelf companies as well as a "Name of your choice" service. Ongoing Registration agency and registered office services are provided for as well as legal advice and support services.

Cyprus is situated in the north eastern end of the Mediterranean Sea with an area of 2521 sq km. Cyprus is the third largest island in the Mediterranean after Sicily and Sardinia.

Government

The government of Cyprus is modelled on western democracies with the President as the head of state for a five year term. Legislative powers lie with the house of Representatives.

Legal System

The legal system is largely based on its English Counterpart and English case law is closely followed.

International relations

Cyprus is a member of the Non-aligned movement, the UN, the Commonwealth, the Council of Europe, the IMF and World Bank. Cyprus has an association agreement with the EC which will lead to full customs union and has applied for full membership.

Communications

Cyprus has excellent telephone, telex and data transmission facilities which are readily available for access to all parts of the world.

Banking

Banking is well developed, highly organised and capable of providing fast and efficient service world wide.

Professional services

The majority of professionals, especially accountants, lawyers and management consultants are British trained and are full members of both the Cypriot and the respective bodies in the UK.

Offshore Entities

Due to the co-coordinated efforts of the Government and firms of accountants, Cyprus has become a regional center for offshore entities. A generous tax regime and an appropriate legal framework, combined with the high standard of telecommunications and infrastructure in Cyprus has played an important role in achieving this result.

A major factor behind the spectacular expansion of offshore activities was the wide range of high standard services provided by accountants. Such services included tax planning, accounting and auditing, meeting Central Bank and other regulatory requirements with regard to the company and its foreign employees.
Offshore entities in Cyprus at the present time cover such areas as employment, finance, trust and fund management, investments, trading, construction and engineering, printing and publishing and royalties as well as specialist financial services like offshore banking, units and captive insurance.
Offshore entities are defined as companies or branches of overseas companies or partnerships whose beneficial ownership and activities lie outside Cyprus. The operational headquarters of such enterprises can actually be located in Cyprus or can conduct their operations through their accountants offices.

Taxation

Offshore companies are taxed at only 4.25% of their profit.

Offshore branches which are managed and controlled from abroad and offshore partnerships are not liable to an additional tax on dividends or profits over and above the amount paid or payable by the respective legal entities.

Foreign employees of offshore enterprises living and working outside the island are exempt if they get paid through any bank in Cyprus or taxed at 10% of the standard rates if they get paid directly abroad.
No capital gains tax is payable on the sale or transfer of shares in an offshore company.
No estate duty is payable on the inheritance of shares in an offshore company.

Double Taxation Agreements

The main aim of these agreements is the avoidance of double taxation of income earned in any of these countries. Under these agreements a credit is usually allowed against the tax charged by the country in which the tax-payer resides.

The effect of these arrangements is normally that the tax-payer pays no more than the higher of the two rates.

The agreements cover the tax treatment of Dividends, Interest and Royalties.

Confidentiality

The beneficial owners of an offshore entity have to be disclosed only to the Central Bank of Cyprus whose officers and employees are bound to secrecy and are criminally liable to any disclosure of information to unauthorised persons. The banks officers and employees are required by law, on appointment to give an oath of fidelity and secrecy.

We can provide full nominee companies where shareholders, directors and secretary are nominees from our office thus safeguarding complete confidentiality of the beneficial owners.

Formation Procedure

Name of the proposed company
The registrar of companies is unlikely to accept a name for reasons such as too similar to the name of an existing company, or considered misleading i.e. Royal, International, Government, Bank, etc.

Central Bank permission
The Central Bank of Cyprus requires bank references as to the credit worthiness, reputation and respectability of the proposed shareholders. The bank reference must be obtained from the place of residence of the shareholder.

Objects of the company
The main objects of the company should be given i.e. trading, holding, services, etc.

Shareholders
At least two who can be either individuals or companies. Nominee shareholders can be appointed.

Share Capital
No legal requirement for a minimum share capital. However, the Central Bank requires a minimum authorised share capital of C£10,000 and issued paid up to C£1,000, (C£10,000 in case of an intended application for duty free concessions).

Directors
Minimum one director, there is no necessity to have local directors. Nominee directors can be appointed.

Secretary
May be local or foreign.

Registered Office
Address of the registered office should be given which must be in Cyprus.

Timing
Formation at the Registrar of Companies and required Central Bank approval usually takes less than five working days.

Whilst every precaution has been taken to check the accuracy of the information contained in this page, no responsibility can be taken for any inaccuracies contained herein. Please also note that we are not tax advisors. Professional tax advice should always be taken if in doubt.

Copyright © The Raymond Morris Group Limited. 1997. All rights reserved.