Global Consultants, with our extensive experience in serving international clients, are here to help you understand what Cyprus has to offer and give you every assistance in establishing and operating your own International Business Company (IBC) in Cyprus.
Cyprus, a full member of the EU as from 1st May 2004, can offer you the lowest tax regime in Europe. As an already established international financial center with a wide network of Double Tax Treaties, an excellent legal and economic infrastructure and numerous other advantages, Cyprus may well be the answer to your international tax planning requirements.
In simple terms, an IBC is a normal limited liability company which is used as a tool, legally, by corporations and individuals throughout the world to direct profits out of high tax countries into offshore jurisdictions or international financial centers thus taking advantage of low or zero tax and double tax treaties. The beneficial ownership and business activities of the IBC in general lie outside the country of its registration.
In this respect Cyprus has many competitive advantages over other international financial centers, the most important of which can be summarized as follows:
- Situated in the eastern Mediterranean at the cross-roads of three continents, Europe, Asia and Africa
- Greek, Turkish and English are the official languages. English is spoken by most population and is widely used in commercial and government sectors.
Accession to the European Union
- Cyprus became a full member of the European Union on 1st May 2004.
Economy and Infrastructure
- The island has excellent telecommunications, air and port connections. There are two international airports in Larnaca and Paphos. Cyprus is a free enterprise economy and there are excellent banking facilities available with a number of onshore and offshore Banks.
International Business Center
- Since the introduction of the “offshore” concept more than 30 years ago, Cyprus has firmly established itself as a reputable financial center. The low taxation, freedom of exchange controls, excellent telecommunication facilities, confidentiality and low services costs, as well as numerous other advantages, have brought Cyprus to the forefront of international financial centers. More than 100,000 international business companies are currently active on the island. A number of these operate from fully fledged offices on the island whereas others use local corporate service providers as their representatives.
Major Tax Advantages
- Net Profits of IBC’s are taxed at 12.5%, the lowest rate in the EU
- An IBC will pay zero tax if management and control is outside Cyprus
- Dividends, interest and royalties are paid gross without any withholding tax
- Dividend income is tax free when received by an IBC
- Profits from a permanent establishment abroad are tax free in Cyprus
- Profits from the sale of shares and other securities are tax free
- No capital gains tax payable in Cyprus from the disposal of immovable property situated abroad
- Interest income not arising in the ordinary course of business, such as bank interest received is income tax free.
- No tax on foreign exchange gains with the exception of gains arising from trading in foreign currencies
- No exchange control restrictions
- Confidentiality and anonymity of beneficial owners is safeguarded
- 80% of net profits are exempted from Tax from the sale or exploitation of intellectual property owned by a Cyprus IBC.
- Special tax regimes for Cyprus International Trusts, Investment Funds, Shipping Companies, Yacht VAT Leasing Scheme in Cyprus, Cyprus VAT Private Aircraft Scheme.
- Losses can be carried forward and set off against future profits for tax purposes.
- Group tax relief for losses is also available
- Any foreign tax paid on income subject to income tax in Cyprus is credited against any Cyprus income tax payable on such income, irrespective of the existence of a tax treaty.
- Tax neutral group reorganisations
- Full adoption of the EU Parent- Subsidiary directive
- Full adoption of the EU Mergers Directive
- Full adoption of the EU Royalty and Interest Directive
Other Inherent Advantages
- Geographical location and time zone
- A stable economy in a western – type economy
- Legal system based on English Law
- Comparatively lower set-up costs and maintenance of international business entities
- Highly developed and efficient accounting, legal and banking sectors
- Strict confidentiality with local authorities and banks
- Excellent telecommunications and air connections
- Excellent banking facilities with worldwide networks
- High level of professional services at very reasonable costs
- Low cost of living
- Low crime level
- Excellent climate
- Private school education available at the highest level.