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.

For more information about how to incorporate a company in Cyprus and to open a Cyprus bank account feel free to visit CCLOGIC Ltd who is one of the leading Company Service Providers on the Internet.

“Saving Tax” doesn't have to be taxing

A very popular and effective tax mitigation option, which International Trading Companies have is to move their tax bases to stable, low-tax jurisdictions. Popularity of low tax jurisdictions amongst the international trading companies is also due to the fact that it is relatively easy to implement highly tax efficient corporate structures for such companies. Let's have a quick look at it….

Trading between two companies involves one company buying the goods/services and the other company (seller) getting the payment in exchange. In ordinary cases (where, No low-tax jurisdiction alternatives have been used), the country which gets to charge the tax (corporate tax) on the profit made by the seller is the home country of the seller (i.e. where the seller is resident). But, by creating an intermediary company in a low-tax jurisdiction, it is possible to get the most of the profits (if not all) taxed in low-tax jurisdiction as opposed to the home country, thereby saving a substantial amount on the taxes otherwise payable in the home country. Such an intermediary company can be used to play a very effective role in any of the areas like sales, distribution or export-import to ensure that the above benefits are gained.

The exporters and importers alike could use such a corporate arrangement to ensure that the profits gained in exportation / importation (on eventual sales of the imported goods) is accumulated in the low-tax jurisdiction through the intermediary company. In fact, the intermediary company could be used to purchase directly from the producer or wholesaler and get the goods delivered to the buyer (customer). Moreover, in most cases, it is not a requirement to have the physical delivery of the goods in / through low-tax jurisdiction to gain the desired taxation benefits.

Are there any particular considerations for such corporate structures?

This corporate structuring has to be set up under certain rules and one of them is the arm's length principle, which is used (in effect) by many countries to ensure that the profits allocated to the low-tax jurisdictions are not unfairly large. The implementation of such rules varies from country to country and that's where certain countries, such as Cyprus (where there is absence of strict transfer pricing rules), are advantageous to operate from. In order to justify and rationalize the allocation of most of the profits to the low tax jurisdiction, specialist tax advice should be sought at the time of company incorporation to ensure that all the nuts and bolts are in place. With the aid of specialist tax advice, such a corporate structuring is certain to be very beneficial for trading companies in saving substantial amounts on tax.

“It is” but “Not all” about Tax saving

While the huge savings in taxes often provide an obvious advantage and incentive to move tax base to low-tax jurisdictions, there are many more strategic reasons and considerations, which also have to form a part of the decision making, such as:

1. Does this new base open a new market for your business, markets such as EU?
2. Does the new base offer your business the strategic locational advantage such as proximity to multiple trade hubs / continents?
3. Does the new base offer politically stable and economically strong (growth possibilities) region?
4. Does the new base have the advanced infrastructure for banking, telecom etc?
5. Will the new base enhance your company's brand and chances of securing more business?
6. Does the new base have favourable tax treaties with other countries?
7. Is the new base viewed with suspicion in the eyes of most of the countries? – Be careful with traditional tax havens / offshore jurisdictions. They may not be advantageous in the longer run.
8. Is the new base welcoming to the foreign companies?

So, what are the jurisdictions which international trading companies can use to attain the above benefits? Well, the answer in EU is unanimously Cyprus.

Cyprus: An “Ideal” location to operate your international trading company from

One of the best jurisdictions, which can be used to effect the above corporate structuring, is Cyprus. This is simply because of the natural tax advantages Cyprus holds in addition to its EU and Eurozone member status. At a high level, following are some of the most important benefits and reasons for international trading companies to consider shifting to / starting in Cyprus as a base for their international operations.
-Corporate tax rate of 10% (Cyprus is the “Lowest-Tax” European Union jurisdiction)
-EU and Eurozone member (Respectable EU member state, not a traditional Tax Haven or Offshore Jurisdiction. This is very important consideration for long-term viability of the business)
-Cyprus is recognized as one of the best, investor-friendly tax system in European Union (EU)

-Tax Exemptions (No Tax) on:
Dividend Income
Profits from the sale of securities (shares, bonds, debentures etc)
Liquidation of the Cypriot Company
Profits (Capital Gains) on Permanent Establishment

- No Withholding taxes on payments of dividends, interest and royalties
- No debt-equity and thin capitalization rules
-Access to EU directives which helps further on taxation planning for trading with EU countries
-No Capital Gains Tax except for the real estate situated in Cyprus
-Absence of no strict Transfer pricing rules
-Vast network of Double Tax Treaties
-Interest deduction for borrowing costs provided
-Low Personal tax rate
-Unilateral tax-relief for foreign tax suffered is granted to all Cypriot companies
-Tax losses can be carried forward indefinitely

Find more information at : Cyprus Company Formation

“Saving Tax” doesn't have to be taxing

A very popular and effective tax mitigation option, which International Trading Companies have is to move their tax bases to stable, low-tax jurisdictions. Popularity of low tax jurisdictions amongst the international trading companies is also due to the fact that it is relatively easy to implement highly tax efficient corporate structures for such companies. Let's have a quick look at it….

Trading between two companies involves one company buying the goods/services and the other company (seller) getting the payment in exchange. In ordinary cases (where, No low-tax jurisdiction alternatives have been used), the country which gets to charge the tax (corporate tax) on the profit made by the seller is the home country of the seller (i.e. where the seller is resident). But, by creating an intermediary company in a low-tax jurisdiction, it is possible to get the most of the profits (if not all) taxed in low-tax jurisdiction as opposed to the home country, thereby saving a substantial amount on the taxes otherwise payable in the home country. Such an intermediary company can be used to play a very effective role in any of the areas like sales, distribution or export-import to ensure that the above benefits are gained.

The exporters and importers alike could use such a corporate arrangement to ensure that the profits gained in exportation / importation (on eventual sales of the imported goods) is accumulated in the low-tax jurisdiction through the intermediary company. In fact, the intermediary company could be used to purchase directly from the producer or wholesaler and get the goods delivered to the buyer (customer). Moreover, in most cases, it is not a requirement to have the physical delivery of the goods in / through low-tax jurisdiction to gain the desired taxation benefits.

Are there any particular considerations for such corporate structures?

This corporate structuring has to be set up under certain rules and one of them is the arm's length principle, which is used (in effect) by many countries to ensure that the profits allocated to the low-tax jurisdictions are not unfairly large. The implementation of such rules varies from country to country and that's where certain countries, such as Cyprus (where there is absence of strict transfer pricing rules), are advantageous to operate from. In order to justify and rationalize the allocation of most of the profits to the low tax jurisdiction, specialist tax advice should be sought at the time of company incorporation to ensure that all the nuts and bolts are in place. With the aid of specialist tax advice, such a corporate structuring is certain to be very beneficial for trading companies in saving substantial amounts on tax.

“It is” but “Not all” about Tax saving

While the huge savings in taxes often provide an obvious advantage and incentive to move tax base to low-tax jurisdictions, there are many more strategic reasons and considerations, which also have to form a part of the decision making, such as:

1. Does this new base open a new market for your business, markets such as EU?
2. Does the new base offer your business the strategic locational advantage such as proximity to multiple trade hubs / continents?
3. Does the new base offer politically stable and economically strong (growth possibilities) region?
4. Does the new base have the advanced infrastructure for banking, telecom etc?
5. Will the new base enhance your company's brand and chances of securing more business?
6. Does the new base have favourable tax treaties with other countries?
7. Is the new base viewed with suspicion in the eyes of most of the countries? – Be careful with traditional tax havens / offshore jurisdictions. They may not be advantageous in the longer run.
8. Is the new base welcoming to the foreign companies?

So, what are the jurisdictions which international trading companies can use to attain the above benefits? Well, the answer in EU is unanimously Cyprus.

Cyprus: An “Ideal” location to operate your international trading company from

One of the best jurisdictions, which can be used to effect the above corporate structuring, is Cyprus. This is simply because of the natural tax advantages Cyprus holds in addition to its EU and Eurozone member status. At a high level, following are some of the most important benefits and reasons for international trading companies to consider shifting to / starting in Cyprus as a base for their international operations.
-Corporate tax rate of 10% (Cyprus is the “Lowest-Tax” European Union jurisdiction)
-EU and Eurozone member (Respectable EU member state, not a traditional Tax Haven or Offshore Jurisdiction. This is very important consideration for long-term viability of the business)
-Cyprus is recognized as one of the best, investor-friendly tax system in European Union (EU)

-Tax Exemptions (No Tax) on:
Dividend Income
Profits from the sale of securities (shares, bonds, debentures etc)
Liquidation of the Cypriot Company
Profits (Capital Gains) on Permanent Establishment

- No Withholding taxes on payments of dividends, interest and royalties
- No debt-equity and thin capitalization rules
-Access to EU directives which helps further on taxation planning for trading with EU countries
-No Capital Gains Tax except for the real estate situated in Cyprus
-Absence of no strict Transfer pricing rules
-Vast network of Double Tax Treaties
-Interest deduction for borrowing costs provided
-Low Personal tax rate
-Unilateral tax-relief for foreign tax suffered is granted to all Cypriot companies
-Tax losses can be carried forward indefinitely

“Saving Tax” doesn't have to be taxing

A very popular and effective tax mitigation option, which International Trading Companies have is to move their tax bases to stable, low-tax jurisdictions. Popularity of low tax jurisdictions amongst the international trading companies is also due to the fact that it is relatively easy to implement highly tax efficient corporate structures for such companies. Let's have a quick look at it….

Trading between two companies involves one company buying the goods/services and the other company (seller) getting the payment in exchange. In ordinary cases (where, No low-tax jurisdiction alternatives have been used), the country which gets to charge the tax (corporate tax) on the profit made by the seller is the home country of the seller (i.e. where the seller is resident). But, by creating an intermediary company in a low-tax jurisdiction, it is possible to get the most of the profits (if not all) taxed in low-tax jurisdiction as opposed to the home country, thereby saving a substantial amount on the taxes otherwise payable in the home country. Such an intermediary company can be used to play a very effective role in any of the areas like sales, distribution or export-import to ensure that the above benefits are gained.

The exporters and importers alike could use such a corporate arrangement to ensure that the profits gained in exportation / importation (on eventual sales of the imported goods) is accumulated in the low-tax jurisdiction through the intermediary company. In fact, the intermediary company could be used to purchase directly from the producer or wholesaler and get the goods delivered to the buyer (customer). Moreover, in most cases, it is not a requirement to have the physical delivery of the goods in / through low-tax jurisdiction to gain the desired taxation benefits.

Are there any particular considerations for such corporate structures?

This corporate structuring has to be set up under certain rules and one of them is the arm's length principle, which is used (in effect) by many countries to ensure that the profits allocated to the low-tax jurisdictions are not unfairly large. The implementation of such rules varies from country to country and that's where certain countries, such as Cyprus (where there is absence of strict transfer pricing rules), are advantageous to operate from. In order to justify and rationalize the allocation of most of the profits to the low tax jurisdiction, specialist tax advice should be sought at the time of company incorporation to ensure that all the nuts and bolts are in place. With the aid of specialist tax advice, such a corporate structuring is certain to be very beneficial for trading companies in saving substantial amounts on tax.

“It is” but “Not all” about Tax saving

While the huge savings in taxes often provide an obvious advantage and incentive to move tax base to low-tax jurisdictions, there are many more strategic reasons and considerations, which also have to form a part of the decision making, such as:

1. Does this new base open a new market for your business, markets such as EU?
2. Does the new base offer your business the strategic locational advantage such as proximity to multiple trade hubs / continents?
3. Does the new base offer politically stable and economically strong (growth possibilities) region?
4. Does the new base have the advanced infrastructure for banking, telecom etc?
5. Will the new base enhance your company's brand and chances of securing more business?
6. Does the new base have favourable tax treaties with other countries?
7. Is the new base viewed with suspicion in the eyes of most of the countries? – Be careful with traditional tax havens / offshore jurisdictions. They may not be advantageous in the longer run.
8. Is the new base welcoming to the foreign companies?

So, what are the jurisdictions which international trading companies can use to attain the above benefits? Well, the answer in EU is unanimously Cyprus.

Cyprus: An “Ideal” location to operate your international trading company from

One of the best jurisdictions, which can be used to effect the above corporate structuring, is Cyprus. This is simply because of the natural tax advantages Cyprus holds in addition to its EU and Eurozone member status. At a high level, following are some of the most important benefits and reasons for international trading companies to consider shifting to / starting in Cyprus as a base for their international operations.
-Corporate tax rate of 10% (Cyprus is the “Lowest-Tax” European Union jurisdiction)
-EU and Eurozone member (Respectable EU member state, not a traditional Tax Haven or Offshore Jurisdiction. This is very important consideration for long-term viability of the business)
-Cyprus is recognized as one of the best, investor-friendly tax system in European Union (EU)

-Tax Exemptions (No Tax) on:
Dividend Income
Profits from the sale of securities (shares, bonds, debentures etc)
Liquidation of the Cypriot Company
Profits (Capital Gains) on Permanent Establishment

- No Withholding taxes on payments of dividends, interest and royalties
- No debt-equity and thin capitalization rules
-Access to EU directives which helps further on taxation planning for trading with EU countries
-No Capital Gains Tax except for the real estate situated in Cyprus
-Absence of no strict Transfer pricing rules
-Vast network of Double Tax Treaties
-Interest deduction for borrowing costs provided
-Low Personal tax rate
-Unilateral tax-relief for foreign tax suffered is granted to all Cypriot companies
-Tax losses can be carried forward indefinitely

Where to seek help from?

Prosperous Consultants, a well renowned specialist tax advisory firm can help you set up your company base in Cyprus. Prosperous Consultants also provide many other related services to make your transition completely hassle-free.

If you would like further information about reducing your corporate tax burden, please Contact us

UK limited company advantages

Company formation is incredibly fast and inexpensive. You can register a limited company with Companies House, the UK agency which regulates every ltd company in England and Wales, in a matter of hours and for as little as a few tens of pounds if using an online service. As a contractor you can benefit from significant tax advantages by trading through a ltd business. Most contractors pay themselves a minimum salary and take the company profits as dividends, which can result in much higher take-home pay compared to being paid a salary from other trading options.

You can claim legitimate business expenses from your own ltd company, such as the costs of running a home office with all the computers, software and equipment that requires, plus travel expenses, subsistence and even training costs. And, as its name suggests, a limited liability company can protect your personal assets, such as your home, if the worst happened and a client decided to sue your company.

Disadvantages of a limited liability company

Even though your company is a separate legal entity from you personally, you still have duties, obligations and responsibilities as a shareholder and director. This would not apply were you to contract via an alternative trading option.

After you register a limited company, you must send annual accounts prepared by your accountant, annual returns and notifications of any changes to shareholdings and company officers, such as directors and company secretaries, to Companies House

Your UK limited company must also file a corporate tax return with HM Revenue and Customs, the UK's tax collection agency; failure to do so can result in fines and even criminal prosecution.

Evaluate the pros and cons before deciding

Setting up a limited company can bring you many benefits, such as increased take-home pay, the ability to claim business expenses and protection from clients looking for a scapegoat.

But some contractors feel the burden of paperwork, such as corporate tax returns, and the responsibility of running a company are too great and choose alternative options for contracting.

Consider the pros and cons and consult a professional, such as a contractor accountant, before making your final decision about whether registering a limited company is right for you.

Dave Chaplin was an IT contractor in the City and knows what it takes to carve out a successful contracting career. He has turned all his and dozens of contractor experts' experiences into a fantastic resource of guides, advice & detailed contractor information, including loads of guidance about setting up a limited company.

“Saving Tax” doesn't have to be taxing

A very popular and effective tax mitigation option, which International Trading Companies have is to move their tax bases to stable, low-tax jurisdictions. Popularity of low tax jurisdictions amongst the international trading companies is also due to the fact that it is relatively easy to implement highly tax efficient corporate structures for such companies. Let's have a quick look at it….

Trading between two companies involves one company buying the goods/services and the other company (seller) getting the payment in exchange. In ordinary cases (where, No low-tax jurisdiction alternatives have been used), the country which gets to charge the tax (corporate tax) on the profit made by the seller is the home country of the seller (i.e. where the seller is resident). But, by creating an intermediary company in a low-tax jurisdiction, it is possible to get the most of the profits (if not all) taxed in low-tax jurisdiction as opposed to the home country, thereby saving a substantial amount on the taxes otherwise payable in the home country. Such an intermediary company can be used to play a very effective role in any of the areas like sales, distribution or export-import to ensure that the above benefits are gained.

The exporters and importers alike could use such a corporate arrangement to ensure that the profits gained in exportation / importation (on eventual sales of the imported goods) is accumulated in the low-tax jurisdiction through the intermediary company. In fact, the intermediary company could be used to purchase directly from the producer or wholesaler and get the goods delivered to the buyer (customer). Moreover, in most cases, it is not a requirement to have the physical delivery of the goods in / through low-tax jurisdiction to gain the desired taxation benefits.

Are there any particular considerations for such corporate structures?

This corporate structuring has to be set up under certain rules and one of them is the arm's length principle, which is used (in effect) by many countries to ensure that the profits allocated to the low-tax jurisdictions are not unfairly large. The implementation of such rules varies from country to country and that's where certain countries, such as Cyprus (where there is absence of strict transfer pricing rules), are advantageous to operate from. In order to justify and rationalize the allocation of most of the profits to the low tax jurisdiction, specialist tax advice should be sought at the time of company incorporation to ensure that all the nuts and bolts are in place. With the aid of specialist tax advice, such a corporate structuring is certain to be very beneficial for trading companies in saving substantial amounts on tax.

“It is” but “Not all” about Tax saving

While the huge savings in taxes often provide an obvious advantage and incentive to move tax base to low-tax jurisdictions, there are many more strategic reasons and considerations, which also have to form a part of the decision making, such as:

1. Does this new base open a new market for your business, markets such as EU?
2. Does the new base offer your business the strategic locational advantage such as proximity to multiple trade hubs / continents?
3. Does the new base offer politically stable and economically strong (growth possibilities) region?
4. Does the new base have the advanced infrastructure for banking, telecom etc?
5. Will the new base enhance your company's brand and chances of securing more business?
6. Does the new base have favourable tax treaties with other countries?
7. Is the new base viewed with suspicion in the eyes of most of the countries? – Be careful with traditional tax havens / offshore jurisdictions. They may not be advantageous in the longer run.
8. Is the new base welcoming to the foreign companies?

So, what are the jurisdictions which international trading companies can use to attain the above benefits? Well, the answer in EU is unanimously Cyprus.

Cyprus: An “Ideal” location to operate your international trading company from

One of the best jurisdictions, which can be used to effect the above corporate structuring, is Cyprus. This is simply because of the natural tax advantages Cyprus holds in addition to its EU and Eurozone member status. At a high level, following are some of the most important benefits and reasons for international trading companies to consider shifting to / starting in Cyprus as a base for their international operations.
-Corporate tax rate of 10% (Cyprus is the “Lowest-Tax” European Union jurisdiction)
-EU and Eurozone member (Respectable EU member state, not a traditional Tax Haven or Offshore Jurisdiction. This is very important consideration for long-term viability of the business)
-Cyprus is recognized as one of the best, investor-friendly tax system in European Union (EU)

-Tax Exemptions (No Tax) on:
Dividend Income
Profits from the sale of securities (shares, bonds, debentures etc)
Liquidation of the Cypriot Company
Profits (Capital Gains) on Permanent Establishment

- No Withholding taxes on payments of dividends, interest and royalties
- No debt-equity and thin capitalization rules
-Access to EU directives which helps further on taxation planning for trading with EU countries
-No Capital Gains Tax except for the real estate situated in Cyprus
-Absence of no strict Transfer pricing rules
-Vast network of Double Tax Treaties
-Interest deduction for borrowing costs provided
-Low Personal tax rate
-Unilateral tax-relief for foreign tax suffered is granted to all Cypriot companies
-Tax losses can be carried forward indefinitely

Where to seek help from?

Prosperous Consultants, a well renowned specialist tax advisory firm can help you set up your company base in Cyprus. Prosperous Consultants also provide many other related services to make your transition completely hassle-free.

If you would like further information about reducing your corporate tax burden, please contact us!

Citizens of the European Union enjoy many of the associated rights including the right to move and reside feely within the territory of the member states. But, it is getting increasingly tougher to gain the citizenship of the most of the EU member states. This is partially fuelled by the concerned voices raised by the nationals of the EU member states in light of the high unemployment rate and the global financial crisis. One of the EU states which is actively promoting investment and immigration into its country is Cyprus. Cyprus offers Immigration Visas, which can be leveraged by the financially healthy individuals (/ their companies) of the Non-EU Nationals to move to Cyprus permanently with a view to gain Cyprus / European Union citizenship in due course. Of course, there are immigration policies that need to be complied with and these are set below. Please ensure you read and understand the requirements set out below if you are looking to immigrate to Cyprus.

When Cyprus Immigration approves you for a “Category F” Visa permit, you are automatically allowed to stay in Cyprus permanently, for an indefinite period of time – No need to apply for a visa or to reapply for a new Cyprus entry visa. While this offers a route to become a European Union (EU) Citizen, it is also true that Cyprus offers its unique advantages for a healthy and prosperous living through an advanced infrastructure, efficient professional services, highly qualified and multilingual labour force, favourable tax regime, lot of investment opportunities and one of the best climates in whole of the Europe.

If you apply for a Cyprus Category F permanent migration / immigration visa you automatically have the option to become a Cyprus Citizen (you can apply for Full Cyprus Citizenship in the sixth year of residency) which means you can travel to any European Union Country or European Member State and move freely in these Countries. You can also start up your own business, buy a new home and there are no restrictions. For example, if you become a Cyprus Citizen you are free to move permanently into the UK and you will no longer require a visa to get entry into the UK. Cyprus Category F visa also allows your dependants to be included and therefore your whole family can move to any part of Europe e.g. UK (as mentioned in our previous example). In essence, you are also free to further migrate to UK, Germany, Ireland, Spain or any other European Member state Country, if you wish to.

We would suggest you speak to Prosperous Consultants Immigration Visa Specialists in Cyprus who will be able to give you all the advice on how you should proceed.

For further information please contact us 

“Saving Tax” doesn't have to be taxing

A very popular and effective tax mitigation option, which International Trading Companies have is to move their tax bases to stable, low-tax jurisdictions. Popularity of low tax jurisdictions amongst the international trading companies is also due to the fact that it is relatively easy to implement highly tax efficient corporate structures for such companies. Let's have a quick look at it….

Trading between two companies involves one company buying the goods/services and the other company (seller) getting the payment in exchange. In ordinary cases (where, No low-tax jurisdiction alternatives have been used), the country which gets to charge the tax (corporate tax) on the profit made by the seller is the home country of the seller (i.e. where the seller is resident). But, by creating an intermediary company in a low-tax jurisdiction, it is possible to get the most of the profits (if not all) taxed in low-tax jurisdiction as opposed to the home country, thereby saving a substantial amount on the taxes otherwise payable in the home country. Such an intermediary company can be used to play a very effective role in any of the areas like sales, distribution or export-import to ensure that the above benefits are gained.

The exporters and importers alike could use such a corporate arrangement to ensure that the profits gained in exportation / importation (on eventual sales of the imported goods) is accumulated in the low-tax jurisdiction through the intermediary company. In fact, the intermediary company could be used to purchase directly from the producer or wholesaler and get the goods delivered to the buyer (customer). Moreover, in most cases, it is not a requirement to have the physical delivery of the goods in / through low-tax jurisdiction to gain the desired taxation benefits.

Are there any particular considerations for such corporate structures?

This corporate structuring has to be set up under certain rules and one of them is the arm's length principle, which is used (in effect) by many countries to ensure that the profits allocated to the low-tax jurisdictions are not unfairly large. The implementation of such rules varies from country to country and that's where certain countries, such as Cyprus (where there is absence of strict transfer pricing rules), are advantageous to operate from. In order to justify and rationalize the allocation of most of the profits to the low tax jurisdiction, specialist tax advice should be sought at the time of company incorporation to ensure that all the nuts and bolts are in place. With the aid of specialist tax advice, such a corporate structuring is certain to be very beneficial for trading companies in saving substantial amounts on tax.

“It is” but “Not all” about Tax saving

While the huge savings in taxes often provide an obvious advantage and incentive to move tax base to low-tax jurisdictions, there are many more strategic reasons and considerations, which also have to form a part of the decision making, such as:

1. Does this new base open a new market for your business, markets such as EU?
2. Does the new base offer your business the strategic locational advantage such as proximity to multiple trade hubs / continents?
3. Does the new base offer politically stable and economically strong (growth possibilities) region?
4. Does the new base have the advanced infrastructure for banking, telecom etc?
5. Will the new base enhance your company's brand and chances of securing more business?
6. Does the new base have favourable tax treaties with other countries?
7. Is the new base viewed with suspicion in the eyes of most of the countries? – Be careful with traditional tax havens / offshore jurisdictions. They may not be advantageous in the longer run.
8. Is the new base welcoming to the foreign companies?

So, what are the jurisdictions which international trading companies can use to attain the above benefits? Well, the answer in EU is unanimously Cyprus.

Cyprus: An “Ideal” location to operate your international trading company from

One of the best jurisdictions, which can be used to effect the above corporate structuring, is Cyprus. This is simply because of the natural tax advantages Cyprus holds in addition to its EU and Eurozone member status. At a high level, following are some of the most important benefits and reasons for international trading companies to consider shifting to / starting in Cyprus as a base for their international operations.
-Corporate tax rate of 10% (Cyprus is the “Lowest-Tax” European Union jurisdiction)
-EU and Eurozone member (Respectable EU member state, not a traditional Tax Haven or Offshore Jurisdiction. This is very important consideration for long-term viability of the business)
-Cyprus is recognized as one of the best, investor-friendly tax system in European Union (EU)

-Tax Exemptions (No Tax) on:
Dividend Income
Profits from the sale of securities (shares, bonds, debentures etc)
Liquidation of the Cypriot Company
Profits (Capital Gains) on Permanent Establishment

- No Withholding taxes on payments of dividends, interest and royalties
- No debt-equity and thin capitalization rules
-Access to EU directives which helps further on taxation planning for trading with EU countries
-No Capital Gains Tax except for the real estate situated in Cyprus
-Absence of no strict Transfer pricing rules
-Vast network of Double Tax Treaties
-Interest deduction for borrowing costs provided
-Low Personal tax rate
-Unilateral tax-relief for foreign tax suffered is granted to all Cypriot companies
-Tax losses can be carried forward indefinitely

Where to seek help from?

CCLOGIC.COM provides comprehensive information and help in order to incorporate your Cyprus Company!

The regulations of carrying out business in Cyprus include having a number of business names that you intend to use to register your company. These names are sent to the offices of the registrar for searching of the register of company names. If the names are used, the government is kind enough to suggest a number of names that you can use but the company owner must consent to the use of these names. The business name serves as the company’s brand.

In addition to the business name, the Article and Memorandum of Association are also a requirement. This serves as an indicator of the business that the company has been registered. It shows the operations of a company as well as the management procedures. Depending on the size and type of company, other documents might be required. These include the minutes of the meetings held to discuss setting up a company in Cyprus. The letter given to the director at the time of appointment is also important. This is because most of the times the people who cause business downfalls are the directors as they are the decision makers.

The law in Cyprus requires every company to have a secretary. Their definition of secretary is an individual who spends time in the company premises at all working times. Such a person is required to maintain a record of the company transactions that occur daily. To ascertain all these requirements, the process of incorporating a company could take a week or more depending on the documents of the company that need vetting and the level of investment that a company plans to set up.

Before a company is incorporated, it must have achieved all the stipulated requirements. These include tax certificates and licenses. A huge percentage of the GDP in Cyprus accrues from the payment of licenses and tax. Due to this reason, every company in the country has to register at the income tax department so that they can be remitting tax on the incomes. The taxation rate is uniform for all companies. A trading license is issued for all the companies. With all these requirements, a company receives an official certificate that shows that it is incorporated and it can begin operations.

Another requirement for the incorporation of a company in Cyprus is the articles and memorandum of association. These documents give a clear outline of the objectives of a company, the management structure and how the business plans to conduct its activities. It outlines the duties of every shareholder in the company and ensures that there is a system followed in the company operations. For a company to be incorporated in Cyprus there must be a bank reference. This reference serves as security and assures the government that the company has a capacity of transacting in the range that they have stated in the articles of association.

Cyprus has set a standard share capital that all the companies should have before incorporation. The share capital stands at 10,000 shares that are issued at a minimum price of one Euro. The number of shareholders is not important but there must be at least one shareholder. This makes sure that there is a beneficiary of the company. Cyprus allows the incorporation of companies through agents. This is mainly for the foreign countries where they allow the investor company to register as a company but under the name of another company that already exists in Cyprus. These services are mainly offered for the people who prefer anonymity.

An important document that is required in the incorporation of a company in Cyprus is an affidavit that is issued after paying a certain amount in a court of law. This shows that the company’s owners are ready to work under the regulations of the state and that they will comply with all the company requirements. For foreign investors, Cyprus restricts the operation of financial, insurance and banking services in the country. This is done in protection of the country’s interests. Unlike other countries, it is not a requirement that a company should get a seal in Cyprus. However, some business titles must be consented to before they are registered. These are mainly related to the financial sector and other critical industries like healthcare and teaching.

Before incorporation, a company must register with the income tax department, which ensures that it remits its tax on income after every financial period.