The Legal Way of establishing a business in Cyprus By Anthony - - PowerPoint PPT Presentation

Hamburg, March 2012

“ The Legal Way of establishing a business in Cyprus”

By Anthony Indianos, Advocate

Hamburg, March 2012

The Legal Framework in Cyprus

• Based on English Common Law
• New taxation framework since 2003
• Integration of E.U. Legislation within the Cyprus Legal Framework
• Exchange Control Law & Regulations
• Wide network of more than 40 Double Tax Treaties
• Cyprus – Germany DTT with new amendments
• New Merchant Shipping Tonnage Tax Legislation 44 (I) 2010
• Scope of Tonnage Tax extended to non EU & EEA vessels

Hamburg, March 2012

The Cyprus Company of Limited liability

• Cyprus Companies Law Cap 113 permanently updated
• Memorandum of Company must contain name, objects, share capital

& liability of beneficiaries

• Articles must contain regulations governing the Company
• Private Limited liability Companies can have 1 – 50 members
• Share capital of Company depends on whether Company has local

presence with offices

• German investors can own 100% of shares in Cyprus Company
• One legal form of Company with activities in and/or out of Cyprus
• The same rules apply to the Cyprus Shipping Company
• No exhaustive list of types of Cyprus Companies

Hamburg, March 2012

Cyprus Company Registration Requirements

• List of names for the approval of the Company Name & Shelf

Company names

• Passport copy and Utility Bill for each beneficiary
• Objects / activities of the company
• Number of shares per beneficiary
• Confidentiality & Nominees
• Nominee Agreements & Deed of Indemnity
• Trust Deed & other documents received by beneficiary
• Shelf Companies

Hamburg, March 2012

Corporate Governance

• Management & Control (M & C) to secure tax residence in Cyprus
• Resident ‘Nominee’ Directors & signature of contracts in Cyprus
• M & C in Cyprus to take advantage of Double Tax Treaties
• Confidentiality via resident ‘Nominee’ Shareholder
• Board meetings, signature of contract and general policy in Cyprus
• Obtaining tax certificate
• Cooperation with the Beneficiary
• Provision of all relevant Resolutions
• Avoidance of long term & general Power of Attorney
• Avoidance of appointment of non resident directors

Hamburg, March 2012

Cyprus Branch & International Partnership

• Cyprus Branch: Section 347 of Cyprus Companies Law Cap 113
• Securing “Place of Business” in Cyprus
• Corporate Taxation of Cyprus Branch 10%
• Cyprus Partnership: Partnership and Business Names Law Cap 116
• General Partnerships of Unlimited Liability
• Limited Partnerships with at least 1 Unlimited Liability Partner
• Partnerships: 2 to 20 members
• Regulated by Partnership Deed
• Tax exemption on Partnerships Profits

Hamburg, March 2012

The Cyprus International Trust

• The 1992 Cyprus International Trust Law
• The concept of the Trust: Settlor, Trustee, Beneficiary
• Property cannot include immovable property in Cyprus
• Beneficiaries are not Cyprus residents except charity
• Protector can be appointed by Settlor
• Duration & Irrevocability of Trust
• 2 year period challenge, Money Laudering Rules prevail
• Formalities & the three “certainties”
• Trust & Tax-Planning
• Types of Trusts
• Trust vs. Company Taxation

Hamburg, March 2012

“Danke schön” “σας ευχαριστώ” Anthony Indianos, Advocate