Written by Peter
Tuesday, March 17th, 2009
It can be very overwhelming to get a picture of the TAX and Legal issues there might be when you register a Cyprus Company.
Some of the questions we often receive from clients interested in registering a Cyprus Company with us are the following:
Do my Cypriot Company has to pay TAX ?
Will the beneficial owners be subject to Double Tax treaties?
Which country will the dispute resolution are handled?
A few good questions which we will try to outline here and which we think is of high interest for many that consider to register a company in Cyprus and in any other offshore jurisdiction.
To the first question, then it is depending very much on how you go and register your Cyprus company, will you be using nominee shareholders and directors or will you use foreigners, or is it the beneficial owner which often is a foreigner that is going to be both the shareholder and director in this company.
By using local nominee shareholders and directors you Cyprus Company will be subject to 10% TAX of net profits! This can be of benefit if you are going and do local business for instant in Cyprus where you need the director of your company to be able to make business decisions on your behalf.
If you make use of foreign nominee shareholders and directors the Cyprus Company will not be subject to any TAX ( 0% TAX) this requires of course that all income of the Cyprus Company is coming from outside of Cyprus. This also applies if you as the beneficial owner and as foreigner is chosen as shareholder and director. The benefit of becoming a foreign nominee shareholder and director is that you can register the company anonymously and your name will not appear in the Cyprus public register of companies.
To the second question, it depends on if you country has a double taxation agreement with Cyprus, if so the beneficial owner is subject of tax in your home country. This is one of the reasons why many people choice to become the company anonymously.
The third question, this depends only on your company’s policy and which country you set forth to handle disputes in your legal documents and has nothing to do with the type of company you are going to register or which country it is. For instant even when your Company is registered in Cyprus you can choice to incorporate a term in your Terms and Conditions or business policies that a dispute is handle by the courts of the UK or US and that’s what apply then.
We advice all our clients to get in touch with their Lawyers/attorney and Advisors for an in depth explanation of above since this is the right place to ask such questions; it might be that other regulations applies which could benefit you.
If you are considering to take your company offshore we will be more than happy to help you, please contact CCLOGIC LLC today and let’s get things started.
