Cyprus Offshore Company: An Advantageous Business Option

Today, Cyprus is one of the hottest destinations for those who want to form an offshore company. It provides numerous advantages to those forming a Cyprus company.

First and foremost among the positives are the generous tax regulations of the country. Interestingly, the country is referred as a 'tax incentive jurisdiction' and not the usual 'tax haven'. The standard uniform tax for Cyprus is lowest in the Europe, a mere 10%. In addition, the taxation procedure is in total conformity with European Union law. For finance companies, holding companies, Cypriot non-resident companies and royalty companies the country offers a number of tax provisions.

Cyprus is a fully active member of the European Union and its geographical position is ideal for companies intending to have operations both in the Middle East as well as in Europe.

Cyprus offers double-tax treaties that are specifically beneficial for offshore operations. This is one of the main reasons for it being a preferred destination.

For the real estate or immovable property situated in Cyprus neither capital gains nor net worth taxes are in force. The rates of personal taxes are low and social insurance costs are also low. In most of the cases, withholding taxes are not applicable. Cyprus grants tax relief to every Cypriot company for foreign taxes paid by them. Overall, the authorities overseeing taxation in Cyprus are friendly to investors. These tax incentives and its location make Cyprus an ideal address for formation of an offshore company.

For formation of a company in Cyprus, the client (one wanting to form the company) first of all needs to suggest some alternative names (usually two to three) to the Registrar of companies. In the cases where the company intended to be formed is already operating in other country/countries with the same name and is owned by a company/group, a letter from the group/company consenting to the formation will be a must.

The main areas of activity/interest of the company should be given to the Registrar of the Companies enabling the concerned authorities to construct Memorandum and Articles of Association for submission.

The minimum share capital in respect of the company under proposal should be 1000 shares each valued at a minimum of CYPŁ1, this will include both authorized and issued shares.

The company should have a minimum of two share holders. An additional advantage of the Cypriot system is that it allows the shareholders anonymity in entirety and has provisions to regulate the same. Every beneficial shareholder should also have a banker's reference.

There are other similar requirements for formation of a company. However, the formalities are simple to fulfill and the procedure is not cumbersome. All in all, forming a Cyprus offshore company is undoubtedly a better option in comparison to some other offshore locations.