TYPES OF COMPANIES
An International Business company in Cyprus may perform a wide range of activities the most common of which are set out below:
Cyprus offers ideal conditions for the location of regional management and administrative centers of multinational companies throughout the world with interests in the Middle East, North Africa and Eastern Europe
There is very wide scope for the use of such companies in Cyprus, particularly in conjunction with trading activities in the region. This is indicated by the numerous trading companies in Cyprus used by organizations and entities of various nationalities. Such companies can be used for triangular trading and also as agency companies receiving commission (main advantage is that the company can register for VAT as well), the export of goods and services from any country to any destination and for transit trade activities.
Holding and Investment Companies
In view of the nil or low withholding tax rates on interest and dividends provided for in the Cyprus double tax treaties, such companies may often be used very advantageously to extract income from treaty countries. An IBC holding company can be the parent for companies registered abroad as well as Cyprus registered IBCs.
Also, in view of the new tax legislation, the holding companies operating from Cyprus are now in a much more beneficial position because they can enjoy the benefits deriving from the tax exemptions as well as the corporate tax benefits by virtue of the new tax legislation.
These may provide services such as sales promotion, consultancy, management marketing, etc.
Construction and Engineering Companies
Cyprus is an ideal location for international construction and engineering companies due to the favorable tax treatment afforded to them and the existence of the Cyprus double tax treaties. Foreign contractors or engineers from a foreign country may avoid paying tax in a Cyprus treaty country provided the project does not exceed the duration specified in the respective tax treaty.
Such companies may take advantage of the Cyprus double tax treaties by providing loans in treaty or other countries where withholding tax on interest is low or nil.
Due to the low withholding tax rates for royalties provided in most of the Cyprus double tax treaties, establishing a royalty company in Cyprus can be a very attractive proposition.
Printing and Publishing Companies
Cyprus has developed into a regional publishing, printing and distribution centre mainly due to its low cost, high quality printing services and its excellent telecommunications system. These advantages together with the tax incentives offered, have led to the establishment in Cyprus of many offshore companies engaged in the printing and type-setting of books and periodicals for sale and distribution outside the Republic
Real Estate Companies
Such companies can be used very advantageously for dealings in property, especially in conjunction with the Cyprus double tax treaties. They can be of special interest for real estate investments in Sweden, Denmark, France, the UK and all Central and Eastern European Countries
An IBC employment company can be used to substantially mitigate the tax paid by expatriates employed outside their home country
The establishment of an open ship Registry, as well as other incentives provided by the government, has been important factors in the development of the island as a maritime centre in the region.
Captive and General Insurance Companies
During the past decade, Cyprus has developed into an attractive centre for the establishment of offshore insurance and reinsurance companies intending to transact insurance and reinsurance business internationally and especially in the Mediterranean, Eastern Europe and the Middle East.
Due to tax incentives offered, special insurance law exemptions, swift registration procedures, low running costs and locally available expertise, Cyprus is especially suitable for the establishment of an International captive insurance company.
REQUIREMENTS FOR ESTABLISHING A COMPANY
Starting from 1st October 2004, the Council of Ministers has approved the complete freedom of the policy governing direct investments from non-residents in Cyprus.
As a consequence, the approval from Central Bank of Cyprus is no longer required for non-residents who wish to establish a Company in Cyprus, or acquire shares in existing Cyprus companies, or otherwise to invest in or from Cyprus. Thus, the applications should now be addressed directly to the Department of Registrar of Companies and Official Receiver.
REGISTRATION AND MAINTENANCE OF A CYPRUS COMPANY
- Incorporation – together with everything the process implies
- Corporate Secretarial Services – maintenance of share registers, assistance with setting up business entities, basic management and shareholder resolutions, amendments to Court register (KRS) data, holding of AGM’s, submission of financial statements and related year end procedures;
- Fiduciary and Domiciliary Services – directorships, supervisory board appointments, nominee shareholding, trust services, provision of registered address and substance offices;
- Shelf Companies – provision of operational, newly-established, limited liability companies, including tax registration, statistical office registration and operational bank accounts;
- Accounting and Payroll Services – maintenance of accounting records, preparation and submission of monthly and annual tax returns, communication with the tax office, statistical office or National Bank of Cyprus, personalized monthly management reporting, preparation of financial statements under IFRS, complete payroll, HR and social security services;
- Liquidation Services – full accounting and corporate secretarial support in opening of the liquidation process, notification to the Court and public, maintenance of accounting records, preparation of the financial statements, and closing procedures
- Virtual Office Services – designated telephone lines, fax numbers, mail forwarding, internet and email
LABOUR AND SOCIAL INSURANCE
The Ministry of Labor, Welfare and Social Insurance (www.mlsi.gov.cy) is responsible for the promotion of social justice within a free democratic system based on the pillars of social cohesion and social inclusion and the maintenance and continuous improvement of the standard of living and the quality of life of the working population and society in general.
All companies operating in Cyprus are obliged to adhere to the employment legislation of Cyprus. Detailed information on labour laws and regulations can be found on the website of the Ministry of Labour, Welfare and Social Insurance at www.mlsi.gov.cy
The maximum weekly hours of work are 48 hours, including overtime. The normal pattern of working hours in Cyprus is 40 hours per week. Additionally, the employee is entitled to at least 11 continuous hours of rest per day.
The following days are public holidays:
• 1 January (New Year’s Day)
• 6 January (Epiphany)
• Green Monday (movable date)
• 25 March (National Day)
• 1 April (1955-1959 EOKA National Day)
• Good Friday (movable date)
• Easter Monday (movable date)
• 1 May (Labor Day)
• Whit Monday (movable date)
• 15 August (Assumption Day)
• 1 October (Independence Day)
• 28 October (WWII National Day)
• 24 December (Christmas Eve)
• 25 December (Christmas)
• 26 December (Boxing Day)