Offshore zone of Cyprus. Offshore in Cyprus (Offshore Cyprus) - these are Offshore accounts of state corporations in Cyprus why

For many who have had to deal with offshore companies, like me personally, when the word offshore comes to mind, Cyprus immediately comes to mind.

Cyprus is a country with an area of 9251 km², the capital is Nicosia, located on the border of Europe and Asia. The country's population is about 780 thousand people, about 80% are Greek, about 20%the rest are Turks, and official language– Greek. TOYpres is a republic with a Presidentnt form of government.

In Cyprus - trust law, which is based on Britishwhat legal system.

Cyprus offshores became popular back in the 90s for business representatives of the CIS countries; there was a relationship between the USSR and Cyprus visa-free entry, and an agreement on the avoidance of double taxation was signed.

After Cyprus joined the EU, income taxes there rose from 4.25% to 10%.

But nevertheless, Cyprus today remains practically the most popular jurisdiction, although it is not a classic offshore.

Advantages

An undeniable advantage is the country’s membership in the EU, not a high tax rate (compared to Ukraine and Russia) and a lotagreements “on the avoidance of double taxation” (signed by 45 countries).

Such agreements can only be used by companies resident in Cyprus. An updated agreement was signed between Ukraine and Cyprus in December 2015intergovernmental agreement on the avoidance of double taxation.

Cyprus is not on the black listoffshores for Ukraine, moreover, it is on the white list of the Organization for Economic Cooperation and Development (OECD).

Cyprus trusts are popular for protecting assets and optimizing inheritance.

To minimize taxes - The most popular form of an offshore company is LTD (Private company limited by shares), this is an analogue of an LLC.

For Ukraine (also Russia, EU states) the opening scheme is very commoncompany in Cyprus to establish its subsidiary in its home country (i.e. you open a company and its daughter works here).

All profits of offshore companies in Cyprus are exempt from taxes in Russia and Ukraine.

Cyprus offshore is successfully used to optimize productionactivities and investment activities.

For example, you conduct international business with any European company (France, Germany, etc.), buy/sell something, then to optimize taxes you can use a Cyprus company as an intermediary between your local company and the seller/buyer.

Confidentiality

The next important issue that interests each of us is the issue of confidentiality.

It is important to know here that the Cyprus Companies Registryopen, information about directors and shareholders of companies is publicly available.

Therefore, the issue of confidentiality can be easily resolved through the use of nominees (directors or shareholders) orDeputy Chairman of the Pound. Joke.

Taxation

In Cyprus, income received worldwide is subject to taxation:

Income tax - 10%;
Capital tax – 20% (itapplies only to income from the management of real estate in Cyprus)
Value added tax(VAT) – 15%, for certain types of activities a reduced or zero rate;
repatriation tax - 0%, with the exception ofroyalty, which is used in the territory of Cyprus –10%, royalties from film and TV distribution – 5%.

Registration

In Cyprus you can purchase a ready-made company or register a new one.

If deadlines are pressing, you should use a ready-made company. In the language of registrars, they are also called “shelf”, those that lie on the shelf.

From my experience, I advise you to pay attention to the date of registration of the company in this case., how the more “fresh” it is, the longer you don’t have to pay for annual maintenance. Subsequent maintenance of the company will cost approximately 3,000 euros.

The authorized capital of the company is nominated inEuro, no special size requirements(From experience I can say, more often from 200 euros and above). Any shares can be issued.

There is an exception, these are bearer shares - they are prohibited.

It should be minimum 1 shareholder (individual or legal entity),annual shareholders' meetings- mandatory, the situation is the same with directors and secretary - at least one, can be both an individual and a legal entity.

The office must be registered in Cyprus.
Mandatory reports:

Annual reports
Accounting (annual)
Audit

Necessary documents for registering a new offshore company

If you decide to register with a nominee director and shareholder, then you need:

Copy of the Attorney's passport (for Power of Attorney)
Copy of the Beneficiary's passport (for the Trust Declaration)

The Beneficiary and the Attorney may be the same person.

After registration, you must be provided with the following list of documents:

Charter in two languages - Greek and English (Articles of Association)
Certificate of Directors and Secretary
Certificate of registration of a company in Cyprus in two languages - English and Greek (Certificate of Incorporation)
Certificate of Registered Address
Memorandum of Association in English and Greek
Appointment Resolution by Subscribers to Memorandum and Articles of Association
Minutes of First Meeting of Directors
Certificate of Shareholders
Share Certificates
Official translation of the above documents from Greek to English (Affidavit)
Seal
Upon request - Tax Certificate

If you order servicesnominee director

Cyprus as an offshore zone Cyprus as an offshore zone website website

Cyprus until recently was one of the most popular offshores. Today it cannot be classified as a classic low-tax jurisdiction, but with the help of companies registered on the island, you can effectively conduct business. Until the country joined the European Union, Cyprus had very favorable conditions for non-resident businesses. This ultimately led to its inclusion in international “black lists” and quite noisy scandals on a global scale related to money laundering and concealment. Everything began to change since the country joined the EU in 2004.

Since 2002, authorities have introduced several legal reforms aimed at strengthening the island's reputation and increasing the transparency of local companies' operations. Now Cypriot companies do not operate contrary to international ethical business standards; this is one of the most respectable and respected jurisdictions. The country was excluded from the Russian “black lists” compiled by the Ministry of Finance back in 2013, after significant changes in fiscal norms, rules for registering companies and monitoring their activities. Earlier, in 2009, the OECD forum recognized that Cyprus has adequately implemented the international tax standards of developed countries and can be considered one of them.

Cyprus as an offshore zone is still popular, but this is not due to the traditional advantages of jurisdictions, but rather to the state’s balanced tax policy, which opens up prospects for optimization without violating international requirements. The authorities are responding to global trends, moving “to the bright side” in order to preserve both the reputation and interest in the island on the part of non-resident entrepreneurs.

Why is it wrong to call Cyprus an offshore?

The concept of “offshore”, which has stuck to the country, continues to be used, but in essence it is incorrect. To qualify as a term, a jurisdiction must meet the following basic criteria:

low rates for foreign businesses or complete absence of taxes on activities outside the jurisdiction;
closed register and confidentiality of information about companies and its participants;
no requirements for the provision of financial statements.

According to none of the key “classical” criteria, Cyprus cannot be classified as an offshore, but if we keep in mind not the formal side, but the essence (profitable and convenient doing business), the island fully falls under the classification. Familiar, albeit outdated, definitions can mislead entrepreneurs. You need to understand that today is not the 90s, and Cyprus does not provide complete anonymity and absence of taxes. Now it's European country with official English language, excellent infrastructure and a strong reputation, the world's largest banks and multinational corporations work with it.

Entrepreneurs who register a business in Cyprus are required to:

undergo a full procedure for registering companies;
register with the fiscal authorities no later than 60 days after registering the business, receive an individual number and pay taxes on all income;
maintain document flow: prepare financial reports once a year, have them certified by auditors and draw up tax returns on their basis;
hold meetings of company shareholders once a year;
post information about beneficiaries, founders and management of companies in Free access- the register is open in the country.

Features of taxation

Cyprus, as an offshore zone, provides many preferences to Russian entrepreneurs. Countries have entered into an agreement among themselves to avoid double taxation. This does not mean that you won’t have to pay at all: over two decades (since 2002), the island has consistently eliminated all signs of offshore ownership. He increased the corporate tax rate from 4.25% to 10% (and this is one of the most low levels in Europe) and, despite tightening regulations, remains an attractive place for business.

The authorities are doing everything to ensure that the island remains profitable for investors, and this primarily concerns taxes. The local fiscal system is based on the principles of residence and territorial diversification. The island's government operates in terms of non- and resident companies, referring to the former as firms that are managed from abroad. It means that:

local residents pay taxes on all income, regardless of source;
Non-residents pay taxes only on income received from a source in Cyprus at the standard corporate rate;
Companies managed or owned by non-residents do not pay taxes on income received outside Cyprus (zero rate applies).

By delimiting activities, non-residents can optimize taxes without violating international standards. Cyprus also provides other convenient financial instruments. In particular, local trusts are used to build effective business structures. They are beneficial for individuals - they can safely store savings and differentiate inheritance rights. For corporations, their use will allow them to maintain the anonymity of asset ownership and ensure the protection of the interests of the ultimate beneficiaries. To take advantage of the benefits of a trust, guarantors are needed. For property transferred to trust management, it is impossible to prove ownership, the assets cannot be seized, and they will be safe.

The island's legislation opens up other opportunities for businessmen, and experienced consultants from the Prifinance company are ready to talk about them in detail. Experts will help customers create an effective work model and receive no less benefits from a Cypriot company than from any classic offshore company.

Very often we hear from Russian businessmen about the so-called “offshore in Cyprus”. In this regard, we would like to clarify this situation from a professional point of view. In the current understanding, Cyprus is not considered an offshore zone, because an offshore zone has a number of features that are not typical for companies in this region. jurisdictions, such as:

profits earned by a company registered in an offshore zone are generally not subject to tax, provided that the company carries on these activities outside the jurisdiction where it is registered;
a company registered in an offshore jurisdiction is exempt from the obligation to prepare and submit financial statements;
information about the directors and shareholders of a company registered in an offshore zone is not publicly available.

Despite the fact that Cyprus is not an offshore zone, it is able to offer quite profitable terms for registration of companies for the purpose of maintaining international activities. Note that Cyprus is a respectable European jurisdiction, widely used for structuring business and conducting international commercial activities. The Republic of Cyprus is a member of the EU and is not included in the offshore blacklists of most countries.

Cyprus companies are subject to income tax (standard rate - 12.5%, there are a number of exceptions and benefits), value added tax (standard rate - 19%) and a number of other taxes (usually if they have an office in Cyprus).

Also, Cypriot companies must annually prepare, audit and submit financial statements (annual income tax report), as well as other tax and statistical reporting.

In addition, one of the pleasant bonuses is that since 1998, the rules of the Double Taxation Avoidance Agreement have been in force between Russia and Cyprus, which provides additional benefits of using Cypriot companies.

Since ancient times, Cyprus has been distinguished from other states by its loyal tax policy, which is why it attracts special attention from entrepreneurs who want to save money. Is Cyprus an offshore zone? In essence, yes, but the nuance is that recently, or more precisely, since 2012, it joined the European Union, and therefore was forced to revise the current legislation, including in the field of taxation. However, the islands that a few years earlier were the most attractive for offshore entrepreneurs still have liberal tax policies.

Advantages of the region

Cyprus is not just an island in the Mediterranean Sea, but also entire states with the capital Nicosia. Its currency is the euro and its population predominantly speaks Greek and Turkish, although English predominates in business. To be more precise, this territory of the state is conditionally divided into two parts, one of which is inhabited by Greeks, and the second by Turks. But as for legislation, the state government was not very worried about this, so all the laws belonged to Britain and were subsequently translated.

Please note that, from an economic point of view, the state can hardly be considered developed, because there are no mineral resources on the island, which largely determine the well-being of the state, so the government promotes the active growth of small and medium-sized businesses, especially in the fields of tourism and finance.

However, let’s return to the question of why the Cyprus offshore is so attractive to foreign businessmen:

Cyprus has for a long time occupied a leading position in the offshore zone; today, despite the fact that the policy has changed somewhat, it is trying to maintain a positive image of a “tax haven”.
The reliability of the financial system of the state of Cyprus is not in doubt among businessmen.
In order to maintain interest in himself, he signed an agreement with more than 40 countries and, in particular, with Russia, on the abolition of double taxation.
Here is the most simplified business registration system.
Information about bank accounts in banks in Cyprus is strictly classified and confidential.

These are the main advantages, but there are also additional advantages that attract the attention of offshore entrepreneurs, in particular, the policy here is designed in such a way that a business registered in Cyprus can carry out settlement transactions throughout the European Union thanks to a special tax number. There is also no inheritance tax or payment of dividends.

And yet, in order to answer the question as accurately as possible: is Cyprus an offshore zone or not, it is worth understanding the theory a little. More precisely, we need to answer the question of what an offshore is and why it is in massive demand among entrepreneurs from countries with developed economies. In fact, businessmen in large developed countries, due to the prevailing internal policies, bear a high tax burden, which is why they try to register their enterprise in a state that has a loyal tax policy. Offshore zones are those areas where several conditions are met at once: low or no tax rate, maximum confidentiality, minimum reporting.

That is, in other words, by moving their business offshore, entrepreneurs can significantly save on paying taxes and fees. True, such zones have their own conditions and nuances, for the reason that, generally, enterprises that are registered in an offshore zone, but in fact conduct their business activities in the territory of their native state, are not subject to taxes. Absolutely all parties benefit from such a scheme, the entrepreneur saves on paying taxes without significantly risking anything, and offshore states receive profits in the form of fixed fees or other payments.

Is Cyprus offshore?

Whether Cyprus is offshore or not, a clear analysis of the state’s internal policy will help you figure it out. The first thing that must be noted is the fact that there is no complete tax exemption here. Here, by the way, there are quite a lot of different types of taxes for entrepreneurs, a tax at a rate of 12.5% is the established corporate tax, and in addition to it there are other taxes: VAT, income tax, defense tax, capital gains tax and others.

Among other things, as mentioned above, Cyprus has signed an agreement with more than 40 countries on the abolition of double taxation, which is not at all typical for offshore zones. There is another one no less important nuance, which is that insofar as Cyprus has joined the European Union, it is forced to submit to certain regulations and directives, according to which it must adhere to general tax policies, use the principles of banking regulation, and take measures in the fight against money laundering Money criminally.

Please note that the main feature is that it carries out the international exchange of tax information, that is, if offshore zones guarantee entrepreneurs complete confidentiality about tax accounts, then currently in Cyprus information is provided upon request.

Finally, one cannot help but say that Cyprus is not at all characterized by such a feature as the lack of reporting, because here, by force of law, entrepreneurs are required to keep accounting records and submit financial statements. For offshore zones, on the contrary, this feature is not typical. After all, the main criterion for entrepreneurs moving their business to offshore zones is the lack of reporting.

From all of the above, we can come to the conclusion that Cyprus, judging by the main criteria, can hardly be classified as an offshore zone. There are three reasons for this: there are no tax benefits and exemptions from paying taxes, information about non-resident accounts is disclosed upon request, and there is no exemption from reporting.

Cyprus for Russia

Surely the residents of our country will be more interested in this question, whether Cyprus is an offshore for Russia, we will try to answer it as accurately as possible. If we delve a little deeper into history, Cyprus was removed from the offshore zone back in 2013, after it became a member of the European Union. The main reasons for this are changes in legislation, according to which the state is obliged to provide information about Russian enterprises registered on its territory.

Among other things, based on the order of the Federal Tax Service Russian Federation Russian enterprises are exempt from taxation of CFC profits, but are required to submit financial statements of the CFC, as well as an audit report. From all of the above, it follows that there is absolutely no point in registering enterprises in Cyprus for Russian entrepreneurs for the purpose of sheltering from taxation for the reason that tax authorities, upon request, can obtain registration data of the enterprise, as well as reports on their profitability.

Please note that Cyprus is excluded from the offshore lists of the Russian Federation for the reason that it is not officially recognized by Russian departments such as the Ministry of Finance, the Central Bank of the Russian Federation and the Federal Tax Service.

Why is Cyprus still called an offshore zone?

Indeed, for many years, starting from the 70s of the last century, Cyprus was considered an offshore zone, until it became part of the European Union. In addition, thanks to a number of reforms, enterprises are no longer divided into two classes: local and international. At the same time, the taxation policy was changed, that is, a single tariff was established for any enterprise, regardless of the form of ownership and nationality of the owner.

Having become a member of the European Union, Cyprus has undergone many inspections in order to identify violations of EU requirements. According to these requirements, the tax policy of Cyprus had to comply as much as possible with international standards and maintain corporate income tax rates within the average value. By the way, if we talk about tax rates today, corporate tax was increased first from 4.25 to 10%, and from 2013 to 12.5%.

Despite the fact that at the moment Cyprus has ceased to be officially considered an offshore zone, such an interpretation for the state can still be found in some sources. The fact is that some people confuse two completely different concepts, considering offshore companies all enterprises located abroad, regardless of whether they actually belong to offshore business or not.

Offshore companies

Financial statements

Accounting support and services for English companies

European banks

Merchant account

VAT number (VAT)

Additional services

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Translation and notarization of documents of foreign companies
Drafting and translation of international commercial contracts

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Information, articles

Sanctions for concealing information about accounts in foreign banks
Matvienko is asked to re-analyze the innovations in the laws on combating offshore companies
Could opening a UK bank account become a reality?
Documents required to open a bank account for an offshore company
Ways to preserve shares of an offshore company after the death of their owner
Trusts in Seychelles: breaking new ground
A company in Cyprus is the optimal place to protect intellectual property
The procedure for changing jurisdiction for foreign companies: Cyprus experience
Innovations in English legislation: controlling persons
Providing reporting by companies doing business in Cyprus
Information on the provision of reports by companies registered in Hong Kong

Questions and answers

Companies in Cyprus

Shelf company cost In Cyprus - 1790 Euro

The price already includes the services of nominees resident in Cyprus, a registration address in Cyprus and an apostille of constituent documents.

Registration fee new company in Cyprus - 1890 Euro

Registration of a Cyprus company takes from 2 to 3 weeks taking into account the time for apostillization and sending documents from Cyprus.

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