“ The Legal Way of establishing a business in Cyprus” By Anthony Indianos, Advocate Hamburg, March 2012
The Legal Framework in Cyprus • Based on English Common Law • New taxation framework since 2003 • Integration of E.U. Legislation within the Cyprus Legal Framework • Exchange Control Law & Regulations • Wide network of more than 40 Double Tax Treaties • Cyprus – Germany DTT with new amendments • New Merchant Shipping Tonnage Tax Legislation 44 (I) 2010 • Scope of Tonnage Tax extended to non EU & EEA vessels Hamburg, March 2012
The Cyprus Company of Limited liability • Cyprus Companies Law Cap 113 permanently updated • Memorandum of Company must contain name, objects, share capital & liability of beneficiaries • Articles must contain regulations governing the Company • Private Limited liability Companies can have 1 – 50 members • Share capital of Company depends on whether Company has local presence with offices • German investors can own 100% of shares in Cyprus Company • One legal form of Company with activities in and/or out of Cyprus • The same rules apply to the Cyprus Shipping Company • No exhaustive list of types of Cyprus Companies Hamburg, March 2012
Cyprus Company Registration Requirements • List of names for the approval of the Company Name & Shelf Company names • Passport copy and Utility Bill for each beneficiary • Objects / activities of the company • Number of shares per beneficiary • Confidentiality & Nominees • Nominee Agreements & Deed of Indemnity • Trust Deed & other documents received by beneficiary • Shelf Companies Hamburg, March 2012
Corporate Governance • Management & Control (M & C) to secure tax residence in Cyprus • Resident ‘Nominee’ Directors & signature of contracts in Cyprus • M & C in Cyprus to take advantage of Double Tax Treaties • Confidentiality via resident ‘Nominee’ Shareholder • Board meetings, signature of contract and general policy in Cyprus • Obtaining tax certificate • Cooperation with the Beneficiary • Provision of all relevant Resolutions • Avoidance of long term & general Power of Attorney • Avoidance of appointment of non resident directors Hamburg, March 2012
Cyprus Branch & International Partnership • Cyprus Branch: Section 347 of Cyprus Companies Law Cap 113 • Securing “Place of Business” in Cyprus • Corporate Taxation of Cyprus Branch 10% • Cyprus Partnership: Partnership and Business Names Law Cap 116 • General Partnerships of Unlimited Liability • Limited Partnerships with at least 1 Unlimited Liability Partner • Partnerships: 2 to 20 members • Regulated by Partnership Deed • Tax exemption on Partnerships Profits Hamburg, March 2012
The Cyprus International Trust • The 1992 Cyprus International Trust Law • The concept of the Trust: Settlor, Trustee, Beneficiary • Property cannot include immovable property in Cyprus • Beneficiaries are not Cyprus residents except charity • Protector can be appointed by Settlor • Duration & Irrevocability of Trust • 2 year period challenge, Money Laudering Rules prevail • Formalities & the three “certainties” • Trust & Tax-Planning • Types of Trusts • Trust vs. Company Taxation Hamburg, March 2012
“Danke schön” “ σας ευχαριστώ ” Anthony Indianos, Advocate Hamburg, March 2012
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