Company Formation

Company Incorporations

We can incorporate for you International Business Companies of different types in Cyprus, in the UK and other major international jurisdictions.  Furthermore, our experienced consultants can provide you a wide range of professional services to facilitate the management and administration of your operations.

Cyprus International Business Company (IBC)

There are different types of entities in Cyprus but the most commonly used form of incorporation is the limited liability company (LTD).

Types of entities may include:

– International Business Companies (IBC’s), which may take the following legal form:

  • Limited company.
  • Partnership.
  • Branch.
  • International Trusts.
  • Other entities.

Procedure for registering a Cyprus Company

Approval of name:

An application has to be submitted to the Registrar of Companies for the approval of the company name. The Registrar is unlikely to accept a name which is similar to an existing one, or is considered misleading, or too general. Names which include any of the words National, International, Corporation, European, Co- operative can be allowed only in special circumstances for sound reasons and with conditions.

Documents to be filed with the Registrar of Companies:

(a) The Memorandum and Articles of Association

The Memorandum of Association mainly contains the objects of the Company and is the document that governs the relationship between the company and the outside world. It also includes details of the share capital and the subscribers to the memorandum with the number subscribed.

The Articles of Association usually adopt partially or in full the Table A of the Companies Law and contain the regulations under which the Company operates, including provisions for the rights of the shareholders, procedure for the transfer of shares, voting rights, powers of the directors and appointment and removal of them, dividends, general meetings of the company, accounts and audits.

b) Directors and Secretary of the Company

A form with the names and details of the first appointed Directors and the Secretary of the company should be submitted; For taxation purposes and for taking advantage of the existing double tax treaties it is advisable to show that the management and control of the company is exercised in Cyprus by appointing local Directors.

c) Registered address of the Company

A form should be filed at the Registrar indicating the Registered Office address of the company in Cyprus.

d) Affidavit

An affidavit prepared and duly signed by the lawyer of the Cyprus company as to the legitimacy of the company.

Registration Certificates

Once the company registration process is complete the Registrar of Companies issues the incorporation certificates of the Cyprus Company, consisting of the following:

  • The Certificate of Incorporation.
  • The Certificate of the Directors and the company Secretary.
  • The Certificate of the company Shareholders.
  • The Certificate of the Registered Office of the company.
  • The Certified Memorandum & Articles of Association.

The whole procedure of registering a Cyprus IBC and the issue of registration certificates can usually be completed within a period of two weeks.

Types of Cyprus Companies

A number of International business activities can be found in Cyprus, taking advantage of the favourable tax regime and other benefits of the Island.  These activities include but are not limited to the following:

Cyprus Holding Companies

A Cyprus holding Co. is widely used as a vehicle to eliminate or minimize the taxes arising on the distribution of Dividends or the gain on the sale of shares in subsidiaries. Uses of Cyprus holding companies include:

  • Groups holding overseas subsidiaries generating dividend income streams.
  • Holding subsidiaries for sale in the future.
  • Taking advantage of the zero taxation on the payment of dividends, interest and royalties.
  • Utilising the extensive network of Cyprus DTT and EU Parent-Subsidiary directives.

Cyprus Royalty Companies

On the 14th of October 2016, the amendments to the Income Tax Law of Cyprus as to the new IP regime have been passed by the House of Representatives and subsequently, the amendments were published in the Official Gazette on the 27th of October 2016.

The provisions of the new IP regime are in line with the latest international developments on the taxation of IP income and OECD’s action plan on fighting base erosion and profit shifting (BEPS) and allow for the current IP regime to phase out by 30th of June 2016. The “grandfathering provisions” allow for the provisions of the current IP regime to remain in place until 30/06/2021 for intellectual property existing as of 1/1/2016 or developed or acquired from non-related persons or acquired from related persons between 2/1/2016 to 30/6/2016.

The new IP regime introduces the idea of qualifying profits that are eligible for the 80% tax exemption which are calculated based on a “nexus approach” and relate to intellectual property which is eligible for the new regime (qualifying assets). The “nexus approach” is based on R&D expenditure incurred to develop the qualifying assets. The qualifying assets are described in the new provisions of the legislation and include amongst others patents, copyrighted software programs and other intangible assets that are non- obvious but exclude trademarks and other copyrights.

The new IP regime applies to Cyprus tax residents, non –tax residence with permanent establishment in Cyprus as well as foreign residents who are subject to tax in Cyprus.

Furthermore, under the new regime there is no income tax imposed on capital gains arising from the disposal of a qualifying asset and the capital gains arising of such disposal are not included in the qualifying profits.  Additionally, the newly amended Income Tax Law introduces capital allowances for all intangible assets, excluding goodwill and assets qualifying for the existing IP regime.

Cyprus Finance Companies

As in the case of holding or a royalty companies, international finance companies offering loan facilities to other companies can take advantage of the Cyprus double tax treaties and reduce or eliminate in full withholding taxes on interest payments.

A Cyprus Financing Co. is commonly used for intra group back-to-back loans, thus taking advantage of the following:

  • No foreign taxes on interest received from a subsidiary (EU Interest and Royalty Directive)
  • Nil or reduced foreign taxes on interest paid to the Cyprus Co from a subsidiary in a DTT country
  • No WHT on interest paid by the Cyprus Co
  • No Thin Capitalisation rules
  • No TP rules – the Arm’s Length principle applies
  • Only a minimum interest margin / spread is subject Corporation tax.

 

Transit trade, re-invoicing and transfer pricing

Order can be placed and received from any country by a Cyprus IBC, goods can be stored in Cyprus bonded warehouses and finally exported to any destination.  Goods and services may be re-invoiced to take advantage of the Cyprus tax incentives.  Certificates of origin, legalization of documents and other formal documentation can be done through the Cyprus Chamber of Commerce.

 

Regional Headquarters

Multinational companies wishing to take advantage of the Cyprus strategic position may establish their regional offices in the island.

 

Shipping and ship-management

The strategic position of Cyprus, together with tax and non-tax incentives, contributed to the success of the island as an established international shipping centre.

 

Captive insurance

Many captive insurance companies have registered in Cyprus mainly because of the important tax beneficial regime and exemptions provided by the government.

 

Personnel recruitment and training

Foreign nationals may be employed by a Cyprus IBC to work internationally, thus taking advantage of the tax exemption given by a number of countries if their nationals are paid by another country for their work abroad.

 

Other business activities conducted by IBC’s in Cyprus include:

  • Property ownership
  • Service companies
  • Leasing
  • Electrical and mechanical engineering
  • Construction and engineering companies
  • Hotel ownership and management
  • Advertising and graphics
  • Fund management

OTHER JURISTICTIONS

In cooperation with our business partners, we can undertake the incorporation of companies in foreign jurisdictions such as:

  • British Virgin Islands
  • Mauritius
  • United Arab Emirates
  • USA – Delaware
  • Marshall Islands
  • UK
  • Other jurisdictions

There are several reasons why registering a company offshore is more beneficial than forming a company in your country of domicile. There is always preferable to register a company in a safe and stable economy offshore. We can assist you with your offshore company registration and guide you on selecting the most appropriate jurisdiction to form your business in.

Our professional consultants will access your business, personal and financial needs and prepare a comprehensive offshore company registration solution which will serve your requirements.

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Selecting an offshore jurisdiction to register your company in is a vital step in the success of your business and meeting your personal, business and financial needs. Each jurisdiction worldwide offers a variety of benefits from registering a company in their territory and it is important to understand exactly what each country offers.

It is, however, very important for entrepreneurs to be aware of the key characteristics of the jurisdictions they consider for incorporation, in order to clearly assess the advantages and disadvantages in relation to their particular business and activities.

The below list contains examples of benefits sought and achieved when you register your company offshore:

  • Low level of bureaucracy
  • Stable economy – politically and financially stable business climate
  • Favourable tax environment
  • Strict confidentiality and privacy laws
  • Make greater gains on annual capital
  • Personal and corporate tax reduction
  • High levels of asset protection and tax planning can be achieved
  • Protection from lawsuits and creditor claims
  • Lower levels of business risks
  • Investments diversification
  • Estate planning
  • Favourable company laws
  • Reduction of start – up and maintenance costs