Cyprus Resident & Non-Resident Company (Offshore)

CYPRUS RESIDENT COMPANY

Basis of taxation

A company incorporated in Cyprus is considered to be a tax resident of Cyprus if it is managed and controlled from Cyprus. A company to be managed and controlled from Cyprus is expected to have the majority of directors residing in Cyprus and holding Board Meetings in Cyprus.

Corporation tax

A company which is tax resident in Cyprus is taxed on worldwide income at the rate of 12.5% which is one of the lowest in Europe.

Dividends distributed

Dividends distributed to non-resident shareholders of Cyprus Companies are not subject to any withholding taxes in Cyprus.

Interest paid

Interest paid to creditors who are non-resident of Cyprus are not subject to withholding taxes in Cyprus.

Double Tax Treaties

Cyprus has concluded tax treaties with more than 53 countries worldwide. Apart from that a Cyprus company being an EU-based entity, is entitled to the benefits of the EU Parent-Subsidiary directive and the EU Interest and Royalty directives providing for withholding tax exemption for interest, dividends and royalty payments made by companies in other EU-member states to a Cyprus company.

CYPRUS NON-RESIDENT COMPANY (Offshore Company)

Basis of taxation

A company incorporated in Cyprus is not considered to be a tax resident of Cyprus if it is not managed and controlled from Cyprus. A Cyprus company not managed and controlled from Cyprus is expected to have the majority of the directors residing outside Cyprus and holding Board Meetings outside Cyprus.

Companies incorporated in Cyprus but not tax residents of Cyprus are not subject to taxation in Cyprus and considered as Offshore Companies.The advantages of a Cyprus non-resident (offshore) Company are the following:

Trading Profits

The Cyprus non-resident company can buy and sell worldwide and the profits will be exempted from taxation in Cyprus i.e. zero tax in Cyprus but there is the risk to be taxed at higher rates in other jurisdictions.

Interest income

Interest income from deposits with Cyprus banks will be received without any deductions and with zero tax in Cyprus.

Dividends distributed

Dividends distributed to non-resident shareholders of Cyprus Companies are not subject to any withholding taxes in Cyprus.

Interest paid

Interest paid to creditors who are non-resident of Cyprus are not subject to withholding taxes in Cyprus.

Double Tax Treaties

A Cyprus non-resident company cannot take advantage of the Double Tax Treaties concluded by Cyprus

UK NON-RESIDENT COMPANY

A company incorporated in a foreign country is considered to be a tax resident of Cyprus if it is managed and controlled from Cyprus. A foreign company to be managed and controlled in Cyprus is expected to have the majority of directors residing in Cyprus and holding Board Meetings in Cyprus. A UK registered company managed and controlled from Cyprus and with activities outside UK will not be taxed in the UK but it will be considered a tax resident of Cyprus. The UK Company will be registered in Cyprus with the Registrar of Companies as a foreign company and with the tax authorities as a tax resident of Cyprus. The advantages of a UK non-resident Company are the following:

Corporation tax

The profits of the UK non-resident company managed and controlled from Cyprus will be taxed in Cyprus at rate of 12.5% which is one of the lowest rates in the European Union.

Reputation

Take advantage of the UK reputation.

Double Taxation Treaties

A UK non-resident company managed and controlled from Cyprus can take advantage of the Double Tax Treaties concluded by Cyprus.

Cyprus has concluded tax treaties with more than 53 countries worldwide.