OpusGuide: Cyprus – Limited Liability Company*

Cyprus has the lowest rate of income tax in the whole of the European Union. At the same time, the tax system provides for a range of exemptions including income from many sources, which may result in obtaining even lower tax rates. Amongst the extra benefits of registering a company in Cyprus, one could also mention the strategic position of the country, its wonderful infrastructure and the low cost of specialist services.

 

 

LEGAL FORM	Private Company Limited by Shares.
POLISH EQUIVALENT	Limited liability company of the Polish law.
SPHERE OF ACTIVITIES	All are legally allowed; there is no requirement to get permission (this does not apply to regulated activities).

BODIES AND OTHER IMPORTANT POSTS / FUNCTIONS	ownership	The general meeting (annual / extraordinary) consists of shareholders (it is possible to set up a single-person company), whose influence on activities is reflected in resolutions. Written voting is allowed.
	management	Board of Directors – based on the Anglo-Saxon model (supervisory and management functions are found all in one body): at least one member is a natural person or legal person.
	supervisory	Supervisory functions are carried out by the Board of Directors, due to the AngloSaxon structure of the company.
	other	Company Secretary is responsible for the internal documentation of the company; a natural or legal person can fulfil this function.
USE OF TRUSTEESHIPS	Nominee shareholder	Provided for under Cypriot law, bound by trustee confidentiality.
	Board of Trustees	Provided for under Cypriot law, bound by trustee confidentiality.
MINIMUM SHARE CAPITAL		No stated minimum share capital (share capital of 1 Euro Cent is possible), no obligation to have Issued Share Capital.

ACCOUNTING / AUDITING		Carried out in accordance with International Accounting Standards (ISA); every year an audited financial statement must be submitted; there are exemptions from the requirement to carry out an audit.
HEARDQUARTERS		Required in the territory of Cyprus.
TIMESCALES	foundation	The company exists from the moment it is entered in the Cypriot Registry of Companies, carried out after at least 7 working days from the submission of the registry application.
	winding up	This requires the formal appointing of the Company’s liquidator. It takes around 1 year depending on the number of transactions carried out by the Company.
	strike-off	Strike-off applies to companies which do not intend to carry out any economic activity and have no liabilities. It takes approximately 9 months.
BANK ACCOUNT		In any bank including those outside Cyprus.
NATIONAL CURRENCY		The Euro
JĘZYK URZĘDOWY		Greek and Turkish. Internal Company documentation may be written in English as well.
FISCAL YEAR		The same as the calendar year. Other accounting periods may be chosen.

TAX RESIDENCY	A company gets Cypriot residency if its management and controlling are carried out in Cyprus (so-called substance).
INCOME TAX (CIT)	CIT tax rate: 12.5%.
DEFENCE TAX (SDC)	Special Defence Contribution Tax (SDC) of 30%, affects above all interest received by a Cypriot company or extraordinary dividends and income from renting.
SPECIAL TAX REGIME	Income from dividends and capital gains received from financial instruments (stocks, shares, bonds, etc) are exempt from CIT or SDC.
WITHOLDING TAX (WHT)	Dividends and interest paid to non-residents are exempt from WHT. Royalties paid to non-residents are also exempt from WHT on the condition that the intellectual property is used outside the territory of Cyprus.
ANTI-TAX-AVOIDANCE RULES	Transfer pricing: YES No regulation regarding thin capitalisation or CFC.

* data binding as of 28th April 2014