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Services to Foreign Nationals

International Business

Our firm can provide information and assistance on how to register and administer International Business Companies in Cyprus. 

Cyprus, as part of the accession process to the European Union and in compliance with the OECD requirements against harmful tax practices has  effected a Major Tax Reform (since 1 January, 2003).

The European Union and O.E.C.D. accepted tax reform is greatly enhancing Cyprus's competitiveness and makes it an even more attractive jurisdiction through which to conduct international business.

 

Cyprus is one of the most attractive Tax Regimes in Europe. It’s Tax System offers a tremendous number of benefits and incentives, including but not limited to the following:

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  • Cyprus is a full member of the European Union since 2004 and member of the Eurozone since 2008. Its tax regime issimple, transparent, in full compliance with the requirements of EU and it follows OECD recommended practices.As member of the EU, investors are offered access to all EU Tax Directives. (The Parent – Subsidiary Directive,Merger Directive and Interest and Royalties Directive). 

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  • Cyprus has one of the lowest EU corporate income tax rates of only 12 ½ %. The island’s advantageous tax rate coupled with an extensive Double Tax Treaty network with more than 65 countries, places it high on the list of preferred jurisdictions for International Tax planners to establish and expand their operations.

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  • The Cyprus Tax System also provides the possibility to the International business community to enjoy a much lower effective tax rate of as low of 2,5%. This can be achieved either using the Notional Interest Deduction (NID) for companies receiving new equity funding, where the tax deduction can reach up to 80% of the taxable profit generated by the new equity or using the Intellectual Property (IP) regime, which allows 80% deemed deduction on qualifying profits from the business use of the qualifying intangible assets.

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  • Cyprus is a very advantageous Holding Company regime. This is because there is no withholding tax on dividends, interest and royalty payments made to companies abroad or to non-domiciled individuals, unless of course are made to non-cooperative and blacklisted jurisdictions. There is also tax exemption on dividends received subject to easily met conditions.

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  • 100% tax exemption on gains from disposal of qualifying titles (i.e. shares, bonds, etc.). Gains from trading in securities are totally tax free.

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  • There is no Capital Gains Tax except for Capital gains arising from the disposal of immovable property situated in the Republic of Cyprus.

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  • Unilateral Credit relief provisions of overseas suffered tax.

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  • Carry forward of tax losses for five years. The tax system allows the tax losses of a specific tax year to be carried forward and set off against the taxable profits of the following five years.

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  • The Profits of foreign Permanent Establishments, are exempt from Taxation.

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  • There is no Inheritance Tax.

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  • There is no Immovable Property tax.

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  • Advantageous Shipping Company regime with an attractive Tonnage Tax (I.T.) for ship owners, managers and charterers.

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  • The Cyprus Tax System offers generous personal allowances for individuals. E.g. the first €19.500 are tax free for individuals.

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  • There are Tax incentives of 20% and 50% exemption for expatriate employees taking up employment in Cyprus.

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  • Possibility to obtain Cyprus Tax residency by spending only 60 days on the Island in every tax year.

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  • Non-domiciled individuals who are tax resident in Cyprus can enjoy up to 17 years of tax-free dividends and interest income.

Shipping Business Activities

The conduct of maritime activities and the rendering of shipping services world-wide can be achieved through Cyprus. Our firm can provide information and assistance to non- resident ship-owners or other professional businessmen as to how to register a ship under the Cypriot flag. This can be done by forming a company. The ownership of the ship can then be transferred to the Cypriot Company. The various fiscal and other incentives of such an investment for ship owners, charterers and ship managers can be summarized as follows:

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  • EU fully approved Cyprus Tonnage Tax (TT) system is considered as one of the most advanced and most competitive

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  • Relatively low fees payable by Cypriot registered vessels as compared with other countries

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  • No tax on profits or the payment of dividends from the operation of a Cypriot registered vessel, in international waters

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  • No Capital gains tax on the sale or transfer of a Cypriot registered vessel or the shares of a ship owning company

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  • No income tax on the emoluments of officers and crew.

International Trusts

The Cypriot Trust Law is based on English Trust Law. The International Trust Law opened the way for the creation of International Trusts in Cyprus.


Provisions:

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  • Settlor is not a permanent resident in Cyprus.
     

  • One Trustee is a permanent resident.
     

  • No beneficiary is a permanent resident.
     

  • The trust property can include any kind of movable and immovable property situated in Cyprus or anywhere in the world.


Benefits:

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  • Created in an EU jurisdiction at low cost.

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  • There is no taxation of International Trusts or their income in Cyprus.

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  • May be used to distribute untaxed income in Cyprus to the beneficiaries, i.e. family member.​

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  • Ideal for "high worth" individuals.
     

  • Especially ideal for "high worth" individuals with slightly complicated family structures i.e. divorced and children from different spouses.

Individuals 

Individuals staying in Cyprus for more than 183 days are taxed in Cyprus on their worldwide income. They may claim as a tax credit tax already paid on overseas income.

Benefits:

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  • Foreign people with income from high tax jurisdictions may stay in Cyprus for at least 183 days and be taxed at maximum 35% (with the first EUR19.500 tax free).
     

  • Foreign pensioners may stay in Cyprus for at least 183 days and elect to have their foreign pension taxed at only 5% (with approximately EUR3.500 tax free).
     

  • Exemption 20% from employment (maximum amount EUR8.550), for individuals not resident in Cyprus before the commencement of his/her employment, starting from January of the year following the year during which the employment commenced (Exemption for 5 years).
     

  • Exemption 50% from Employment Income when the Income exceeds the amount of EUR55.000, for an individual who was not resident in the Republic before his/her employment in the Republic, (Exemption for 17 Years).

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AN INTERNATIONAL ASSOCIATION OF INDEPENDENT ACCOUNTING FIRMS

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INAA GROUP

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