Category:
Incorporation
Cyprus is strategically located in the Mediterranean Sea with easy access to Europe, Asia and Africa. Due to its geographical position and its extremely low tax corporate taxes, Cyprus is often promoted as one of the most important international financial and business centers in the world. Though the official language of Cyprus is Greek, English is very commonly used especially in the business community. And just as with any country while there are plenty of advantages of incorporating a business in Cyprus, there are also some disadvantages as well.
Advantages and Disadvantages of Incorporations in Cyprus
Cyprus is strategically located in the Mediterranean Sea with easy access to Europe, Asia and Africa. Due to its geographical position and its extremely low tax corporate taxes, Cyprus is often promoted as one of the most important international financial and business centers in the world. Though the official language of Cyprus is Greek, English is very commonly used especially in the business community. And just as with any country while there are plenty of advantages of incorporating a business in Cyprus, there are also some disadvantages as well.
The following are some advantages of incorporating a business in Cyprus:
- Cyprus is located between the three continents of Asia, Africa, and Europe, providing an attractive, versatile and diverse market place.
- Cyprus has a stable business environment, with a steady currency and macroeconomic stability.
- Cyprus has a favorable taxation climate, with no double taxation for any incorporations.
- Cyprus has a skilled and flexible labor force with a well developed infrastructure.
- Cyprus is compiles with the European Union Code of Conduct for Business and Taxation and OECD (Organization for Economic Co-operation and Development) regulations.
- All net profits of international businesses are taxed at the rate of 10.25% only.
- International partnerships are granted full tax exemptions on profits.
- International company branches are granted full tax exemptions on profits if the management and control is outside of Cyprus.
- International company branches are subject to a 4.25% tax on net profits, if management and control of the branch is in Cyprus.
- Foreign employees of an International company who are living and working in Cyprus are taxed at half the normal personal income tax rate.
- International businesses are granted full estate duty exemption on inherited of shares.
- Work and resident permits for the foreign employees and their families can be readily obtained if a business maintains an office in Cyprus.
- Cyprus has no exchange control restrictions.
- Dividends paid by an international company are not taxed.
- International companies are exempted from value added tax (VAT).
Some disadvantages of incorporations in Cyprus include:
- International businesses are required to provide a bank reference to the real owner of the company.
- International businesses are also required to provide the complete information about its shareholders, including their names, addresses, nationalities, place of residence. However this information is kept confidential and is for recordkeeping purposes only.
- There are some business activities that foreign nationals are not authorized to participate in such as banking, insurance, reinsurance, and financial services.
- Activities prohibited by the government include trading resident individuals or companies located in Cyprus.
- The name of the company must not be identical or even similar to an existing company.
- An annual shareholders meeting is required under the law.