OpusGuide: Cyprus – Limited Partnership.

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	Limited partnership without separate legal personality registered under the CY Partnership Law, Cap.116 – Limited Partnership.
POLISH EQUIVALENT	Limited partnership under the Polish law
SPHERE OF ACTIVITIES	Any operational activities; no requirement to obtain permits (not a regulated activity).

GOVERNING BODIES AND OTHER IMPORTANT POSITIONS / FUNCTIONS	partners/owners	At least one general partner who is liable for all the obligations of the LP and at least one limited partner, who is not responsible for the LP’s obligations beyond the amount he/she has contributed to the LP.
	management	The management of the LP is conducted by the general partner(s) and in case of a conflict this is resolved by the majority of partners
	supervisory	There is no obligation to appoint a supervisory body; but it is permitted to do so.
	other	The name of the partners are registered in the Registry of Companies (RoC); this information is publically available.
USE OF TRUSTEESHIPS	nominee partner	The economic owner(s) of the LP may act through a nominee partner within the institution of a Trust Deed (the Trust Agreement). The Cypriot laws secure a full anonymity.
	trust / fiduciary management	The management is conducted through fiduciary services.
MINIMUM REGISTERED EQUITY		No requirements for minimum registered equity. Contribution can be also made in labour.

ACCOUNTING/AUDIT		The LP is obliged to keep books of records; and if the turnover exceeds €70.000 per financial year, there is a requirement to prepare and file audited financial statements.
HEADQUARTERS		The LP is established and registered in the territory of Cyprus, and declared full details of the office / address upon the registration.
TIMESCALES	Establishment	LP must be registered to the register of the RoC; failing to submit registration form to the RoC does not invalid the LP articles of association, however, penalties are available.
	Dissolution	The LP can be registered for a fixed term or if entered into for an undefined time, the LP can be dissolved by any partner giving notice to other(s) of his/her intention to dissolve the LP.
	Strike-off	The LP can file an application for a strike-off if it ceased its activities.
BANK ACCOUNT		No requirements to open a bank account in Cyprus.
NATIONAL CURRENCY		Euro
OFFICIAL LANGUAGE		Greek and Turkish. Internal company documentation may be written in English as well, including the LP articles of association.
FINANCIAL YEAR		In general, the financial year must be marked as 12 consecutive calendar months, however it may also be changed.

INCOME TAX (CIT)	LP, due to the fact of not having a legal personality, is not subject to the income tax. Following the principle of see-through approach, its income is taxed at the hands of partners, according to their participation in LP’s profit.
	The income of the partners is taxed accordingly to the tax implications in their tax residency jurisdiction.
SPECIAL DEFENSE CONTRIBUTION TAX (SDC)	SDC does not apply to LP, since it is a see-through entity.
SPECIAL TAX REGIME	Special tax regime should be checked at the level of partners. No special regimes for the LP.
WITHOLDING TAX (WHT)	Only royalties for the rights used in Cyprus are subject to withholding tax at the rates of 10% and 5% (in case of films). The rate may be reduced or exemption applied on the grounds of double tax treaties or an European Directive.
ANTI-TAX -AVOIDANCE RULES	Transfer pricing: NO transfer pricing in Cyprus (but arm’s length principle shall be applied). Thin capitalization: NO. CFC: NO.