Archive for August, 2011
This is one of the frequently asked questions we receive on a daily basis so we decided to make a block post about it for the public interest and the clients who consider to incorporate a Cyprus company but require more help and information before they are able to take a decision.
Foreign Nominee (director/shareholder)
When do I need a foreign nominee?
If you have incorporated your company in Cyprus and you personally don’t want to be listed on any public company register, and nor do you want to pay any corporate tax, then you will need to appoint a nominee shareholder and director who are NOT resident in Cyprus. This is a much more expensive service for a startup company; however, if you do your maths then you will see that you don’t need to make a very high profit before you have earned this money back several times over.
What are the downsides of a foreign nominee?
The company can’t be registered for VAT.
Your can’t get a tax certificate in Cyprus for the company.
Local Nominee (director/shareholder)
When do I need a local nominee?
It depends very much on what you are trying to achieve. Many clients want to avoid paying the high tax rate they have to pay in their own country and would rather pay 10 per cent corporate tax in Cyprus than perhaps 20, 30 or even more. In addition, a Cyprus resident company can obtain a VAT and TAX certificate and can also be registered for VAT, which for trading businesses can be a benefit and also necessary from a legal point of view.
It is cheaper for the client to appoint a local (Cypriot) nominee than a foreign one.