Lexon Incorporations: Corporate, accounting, trust
Lexon Incorporations: Corporate, accounting, trust
Cyprus: Limited Company

General information about the country

The Republic of Cyprus is located on an island of the same name in the Mediterranean Sea being equidistant between the continents of Europe, Asia and Africa.

Cyprus had been a British protectorate since 1878. This is due to the fact that during the Russian - Turkish war, the Ottoman Empire and the United Kingdom entered into an agreement regarding the administration of the island. The agreement provided that the British would protect the Ottoman Empire against possible attack. During World War I, the Ottoman Empire sided with Germany in 1914. In response to this, the United Kingdom annexed Cyprus officially on 5 November 1914.

In 1960 Cyprus gained independence. However, about 2% of the island area is still owned by the United Kingdom, being where the British military bases are located.

The remaining area belongs to the Republic of Cyprus de-jure. However, in practice 39% of the island area has been occupied by Turkey since 1974, with the Turkish Republic of Cyprus being formed there. This is recognized by only one country in the world being Turkey itself.

Cyprus joined the European Union in 2004 and adopted the Euro as the national currency in 2008.

Legislation

The present legal system of Cyprus was formed during the British colonial rule of the island during the period between 1878 and 1960. Consequently, most of the legislation was formed under the influence of English law. In particular, the company law, being the Cyprus Company Law Cap. 13, is largely based on the English Companies Act.

When Cyprus joined the European Union, the legislation was harmonized in accordance with the European Union general regulations.

The tax system in Cyprus is one of the most favourable amongst all European Union countries with regards to international business and investment.

Corporate characteristics:

Main:
Company typePrivate Limited Company
Corporate legislationCyprus Company Law, Cap. 113
Language of company documentsGreek
Corporate endingLimited, Ltd.
Authorised capital:
Minimum amountEUR 1,000
Standard amountEUR 1,000
Standard currencyEUR
Permitted currenciesEUR
To be paidWithin the first year of operations
Shareholders:
Minimum number1
Maximum number50
Publicly accessible recordsYes
Directors:
Minimum number1
Local directorRequired for tax residency
StatusAn individual or a legal entity
Publicly accessible recordsYes
Secretary:
Minimum number1
Local secretaryRecommendable
Publicly accessible recordsYes
Reports:
Filing an Annual ReturnYes
Fiscal yearJanuary 01 – December 31
Financial StatementsYes
Publicly accessible Financial StatementsYes
AuditorMandatory
Filing a Tax ReturnYes
Corporate taxation:
On trading income12.5%
On passive incomeIn most cases - 0%
Double Tax Treaty network:Agreements with more than 50 countries

Additional information on taxation

The tax legislation of the Republic of Cyprus contains significant benefits making it extremely attractive for international business. Some of the particularly interesting features are as follows:

Conclusions

A Cyprus resident company is one of the best tools for entering the European Union market. A favourable network of Double Tax Treaties grants benefits to Cyprus companies which can be used in many other countries such as Russia or the Ukraine.

In certain cases, the Cyprus Defence Tax is also relevant. The Defence Tax is a unique type of tax to Cyprus. It is a well known fact that a formal military situation between the Greek and Turkish parts of the island has been in effect in Cyprus since 1974. For example, the Defence Tax is levied on income received by a Cyprus company in the form of interest, unless lending is the main activity of that company’s business.

http://lexcorp.com/en/jurisdictions/cyprus/ - Cyprus: Limited Company

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