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posted 8 years ago
Business
nowadays operates in an interconnected world, without any boundaries or
limitations to protect brands and companies from the merciless competition. In our era, due to technological
breakthroughs, competition is thriving and multi-attacking companies and brands
from various channels of communication; therefore entrepreneurs find themselves
in the difficult position of searching and finding the most favorable path to
follow, for the achievement of economies of scales.
Currently,
many entrepreneurs are in the process of searching various ways on how they can
maximize their productivity and enhance their profitability by minimizing their
operational costs. One of the main
scenarios they examine, due to its endless possibilities, is the reincorporation
or re domiciliation of their business activities in favorable markets. Even
thought this practice is very common, entrepreneurs should cautiously consider their
options, since this path can be very costly, multifaceted and time
consuming.
Consequently,
when entrepreneurs decide to pursue this course of action not only do they have
to prepare their business plan but they also have to include the nature
of activities and purposes of their company and simultaneously proceed with the
political, economical, social and technological environment analysis of the
target market.
Additionally, they should examine important economical parameters
of the targeted country such as the taxation regime scheme, processing time of company
formation or re domiciliation and the terms and conditions of the exchange
regulations, as well as, the transaction flexibility, assets, personal
information protection and requirements for opening corporate bank accounts
etc. In summary, entrepreneurs should
thoroughly assess the business law frame work under which their company will
operate.
Even though
various countries are renowned for their favorable tax regime scheme, Cyprus is
considered to be one of the most reputable and strongest jurisdictions for many
types of company formation, incorporation,
trusts and investment offering one of the lowest corporate tax rates in
Europe.
Cyprus is a country island situated in the Eastern Mediterranean area, at
the heart of three continents; Europe, Africa and Asia thus rendering it a
favourable choice.
It is a full member of the European Community and completely aligned with
the EU regulations. Its currency is Euro and the official language is Greek
while English is spoken by almost everyone and Russian by a significant
percentage of the population.
In addition, Cyprus has one of the lowest crime rates in the world. It has an
excellent transportation structure and infrastructure that support the entire
spectrum of business activities which take place on the island. It has a trustworthy and advanced private
banking and medical system. Cypriot people are well mannered and are famous for
their hospitality.
The Legal System of
Cyprus is based on Common Law. Its economy
operates based upon an open, market driven principle, with favorable tax
regimes for the incorporation of companies and investments. Moreover, Cyprus is characterized by a high per capita income and
renowned as a European Union centre for foreign investments, offshore
businesses and activities.
Also, it is important to note that the Government
authorities of Cyprus are promoting heavily the incorporation and foreign
investments, as well as, allowing the purchase / ownership of property under
favorable conditions.
Consequently, Cyprus
Government authorities engage in non – stop negotiations for forming double
taxation treaties with non European countries, in order for the Cypriot active
companies to enjoy an important competitive advantage. Currently, Cyprus is an
affiliate to more than 50 double taxation treaties based on the OECD including
the EU, China, India, Kuwait, Russia, Singapore, Thailand, USA, Azerbaijan,
Lebanon, UAE, Georgia and other important hub countries.
Furthermore, other
important advantages of Cyprus are the low corporation tax rate, the very short
time frame for company registration, as well as, the low annual maintenance fees
of corporations. Cyprus offers one of the lowest corporation tax rates in the
EU, which is 12.5%. The time frame for
the registration of a new company is very short, approximately 7-9 days.
Hence, Cyprus allows
the use of nominee Directors, Secretary and Shareholders therefore there is no
obligation of exposure of the Ultimate Beneficial Owner (UBO) in the public
Company Registrar Record. Anonymity rights are fully safeguarded and there is
no need for the owner to be present during the process of the incorporation or
opening of a corporate bank account. Bank accounts can open between 2 – 5
working days with full online electronic banking and digital pass as well as a
debit card.
Cyprus is considered to be the most well-known EU country for offshore
company formation and Trusts. The Cyprus International Trusts are exempted from
income tax, capital gains tax, special contribution or any other taxes.
Additionally, there is no estate duty or inheritance tax in Cyprus, there is flexibility
for relocation, there is no exchange control regulation and trusts can operate
internationally with no disposal
tax of securities. Thus, there are no
withholding taxes on dividend payments, interest or royalties to non residents (subject
to conditions).
In addition, the
profits from the sale of shares in the stock exchange are tax free, whereas, the
losses of a company can be carried forward opposed to future profits for an
indefinite period. Besides those very important advantages, Cyprus is also offering
the Group relief option, whereby the loss of one company can be covered by the
profits of another since both of them are under the Cyprus residential tax
scheme.
Moreover, Cyprus
Permanent Residence and Citizenship Schemes are considered to be one of the
strongest in the world since they provide several significant benefits to the
investors, as well as, an advantageous flexibility towards the investors that
are reside in non EU member states, which includes, their family members under
18 years old as well.
In summary, Cyprus
tax law is characterized by its simplicity, straight forward approach and
effectiveness. Subsequently, entrepreneurs
should consider Cyprus as a favorable market for incorporation or re –
domiciliation of their business activities, since their companies will enjoy instantly,
among other important advantages, low corporate taxation rates and annual
maintenance corporation costs.
In
addition, entrepreneurs will have the option of forming an offshore company or a
trust so as to protect their assets, companies’ strategies and personal
information by enjoying a very beneficial taxation regime with no exchange
control regulation that would limit international operation.
Justifiably,
Cyprus is considered to be an EU Tax Heaven island country. Cyprus companies enjoy
safety, stability and flexibility, as well as, overall low tax rates while
having the opportunity to trade not only in the EU but in other countries by
enjoying the advantages of over 50 double taxation treaties.
Cyprus is globally an ideal
investment and incorporation gateway, offering to the investors a market right
of entry to more than 500 million EU citizens, the Middle East and China.
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