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The main benefits of Cyprus formation

Jan 08, 2019

Cyprus is one of the top-rated countries in Europe for registering companies including registration for offshore purposes. A compound of reasons, such as the advantageous tax legislation, classic corporate law and the country’s consistent tax policies make Cyprus a very attractive jurisdiction.

Cyprus has a powerful and advanced legal regulatory system and, as a former British colony, it is a common law country with business legislation comparable to those in the UK. Every Cyprus company enjoys all the benefits of functioning in an EU country, since Cyprus is a member of the European Union. Additionally, the island has well-versed, professional staff who speak fluent English, as well as know Russian since it is, also, a popular language for business.

Actual corporate tax legislation

One of the reasons why Cyprus became such a good business jurisdiction is the business-friendly tax system that gives a lot of benefits to companies that are residents of the country. The main advantage of a local business is a corporate tax rate of 12% which is one of the lowest in Europe. Moreover, the country is on the OECD white list.

Double tax treaties

Businesses formed in Cyprus also benefit from the double taxation avoidance treaties that have been concluded between Cyprus and other 45 countries. There are double tax treaties in effect with multiple European countries (inside and outside the EU) and several with Middle Eastern countries. In most cases these treaties adhere to the OECD pattern. Consequently, foreign investors are not obliged to pay extra tax in their country of origin.

Company formation process

The mechanism for incorporation of a company in Cyprus is plain, clear and swift, this is an extra benefit of Cyprus in comparison with other jurisdictions. Name approval is the first step of company formation. On average it takes 2 to 3 working days to get the name approved. Following the approval, the necessary documentation shall be filled with the Registrar of Companies, and as of that date, it takes approximately 5 working days complete the incorporation process.

International trusts

One more benefit of forming a company in Cyprus is that the law of Cyprus permits investors to save their anonymity and keep their property under an international trust. Therefore, an investor can be the beneficial owner of a Cyprus company, but it is not obliged to be the registered shareholder of the business as well. In this manner, a local individual, or corporate body, may hold the company’s assets under their name as nominee shareholder for the benefit of the actual shareholder - beneficial owner.

Advanced and effective system

Cyprus is also known for its high level of corporate services delivered by specialists, such as lawyers and auditors. What is more, Cyprus offers one of the best banking systems that might assist with operations of international firms.

Regardless of the fact that Cyprus is one of the world´s smallest countries, it is still one of the most important financial and business centers. Its reliable legal system, actual tax legislation and signed double tax treaties, the affordable and qualified corporate services offered and the simple incorporation mechanism made Cyprus one of the most popular places for investment worldwide.

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