As an aspiring business owner, it is innate to think of ways to cut the cost of production without compromising the quality. One of the effective ways to reduce costs is by seeking initiatives to minimize taxes.
Hence, numerous entrepreneurs decide to immigrate to a European Union state like Cyprus to avoid heavy taxation. Cyprus is a haven for business-oriented people as the region has commendable flexibility in the tax regulations and laws.
Besides the relaxed laws, Cyprus is a beautiful island boasting its rich history and culture. This article will discuss the various benefits of residing and setting up a company in Cyprus. It will also discuss what basic steps to take to migrate to this country.
Advantages of Setting a Company and Living in Cyprus
The Republic of Cyprus is known for being a favorable jurisdiction for the majority of business owners. As this region is a member of the European Union, registering a company here will enable any individual to reap all the benefits of running a business in an E.U. country.
Moreover, the island has a developed and effective legal system. All the professional locals in this region speak English fluently, making it easier for anyone to settle in.
Beneficial Corporate Tax Legislation
The business-friendly taxation of the corporate establishments in Cyprus allures the majority of ambitious entrepreneurs. Cyprus is famous for being a non-domicile country. Non-domicile simply means not being taxed in a country as the source of income is outside the region.
You can read up on a non-domicile guide of Cyprus to get a clearer idea. Cyprus fully complies with the European Union legislation as well as has one of the lowest corporation tax rates (around 12.5%). In addition, it is also included in the white list of OECD.
Establishing a company in Cyprus is quite easy and straightforward. The owner of the company does not necessarily have to be a resident in Cyprus, and the business operations can be carried on elsewhere. Your company simply needs to be registered in the Cypriot jurisdiction to get the lower taxes and tax benefits.
The tax benefits include 0% tax on interest income. It also includes no taxation on dividend income and profits from bonds, shares, and other securities. The business owner does not need to pay tax for corporate re-organizations such as asset transfers and divisions.
The Cypriot legislation has more tax incentives. For instance, the royalties paid by Cyprus to non-resident companies are not taxed (except for Cypriot intellectual property). The same applies to the income and capital gains from the liquidation of a company registered in Cyprus. Moreover, there is no VAT charged on the imports and exports between EU countries.
Avoid of Double Taxation
Double effect treaties that follow the OECD model are established between Cyprus, a handful of other European countries, and few Middle Eastern countries. Consequently, foreign investors are not charged any extra taxation in their home country.
Simple Company Registration and How to Do It
In comparison with other countries, the company registration process in Cyprus is quite fast, easy, and straightforward. The first step is the approval of the firm’s name by the Companies Registrar. The approval takes only two or three working days. The next step involves meeting the documentation requirements of the Registrar of Companies.
The filing and validation of the necessary documents take approximately five working days. Establishing a company in such a short period is incredibly advantageous as the administrative procedures are kept to a minimum.
Cypriot Citizenship Through Investments and Its Requirements
Cyprus provides this amazing opportunity to gain Cypriot citizenship via investment. Foreign investors get all the advantages of the European Union when they become registered Cypriot citizens. The benefits of E.U. citizens include freely moving and working within all countries in the union.
Cypriot citizenship requires a minimum investment of 2 million Euros. The simplest way of investing and gaining citizenship simultaneously is by setting up a company in Cyprus. Hence, establishing a firm in this jurisdiction is a smart financial investment indeed.
Another alternative is to invest through real estate. You can also acquire citizenship easily by investing in bonds, funds, and other securities registered in Cyprus.
You can do either of the three ways mentioned above, or you can do a combination of all three. The procedure does not necessarily require the investor to be physically present in Cyprus to get citizenship. It can be obtained through being the spouse or parent of the applicant.
Under an international trust, the Cypriot law lets investors remain anonymous and hold their property. This means that the investor does not need to be the registered shareholder of the firm to be its beneficial owner.
A Cypriot local or company can be the nominee shareholder of the property for the benefits of the actual shareholders who prefer to be anonymous.
Efficient and Developed System
Cyprus also boasts skilled professionals like lawyers who provide exceptional services. Moreover, this jurisdiction offers a secure business environment by providing support from a modern banking system and a reliable financial sector.
Setting Up a Company in Cyprus
The requirements of opening a company in Cyrus are quite simple. The foreign investor should fill out a form under which he or she will fulfill the financial activities of the firm. Once the form is completed, the individual will have to comply with the following steps:
- Decide and set a unique name for the company. The name should also properly depict the type of business.
- The Memorandum, Articles of Association, and other important documents of the firm need to be drafted.
- Open a corporate bank account in a Cypriot bank in which the share capital can be encashed.
- Hire officers for the company. The directory and the co-company secretary are compulsory.
- Company registration documents related to the Cyprus Companies House need to be submitted.
- Register the firm for VAT, taxation, and social insurance.
- Acquire the required business licenses to enable the economic activities.
The company can appoint employees and start its operation once the above mentioned steps have been carried out. You can also appoint a Cypriot lawyer to iron out the entire procedure for you.
Many entrepreneurs consider moving their locale to Cyprus to lower their business expenses effectively. Cyprus is a beautiful region and boasts scenic nature. It also has an efficient and robust financial sector, which is incredibly advantageous for various business owners.