Orca Offshore, Company Formation and Banking Specialists

Company registration in Cyprus

Under the new Cypriot corporate legislation worldwide income taxation of foreign-controlled Cyprus offshore companies will no longer depend on where they are registered but on where they are actually managed and controlled. Companies which are registered in Cyprus but managed and controlled from outside of the island, will only be taxed in Cyprus on income generated within Cyprus. Offshore companies in Cyprus will enjoy exemption from tax on foreign dividends, interest and income from any permanent establishment outside the island as well as all foreign tax credits and offsets of losses incurred abroad. They will not be entitled to benefits under the double taxation treaties, but will not be subject to the exchange of information rules under such treaties. The result of these arrangements is that a Cypriot company is the perfect compromise between a tax haven IBC and a standard European Union corporation.

Note that the Cyprus IBC is not considered tax resident in Cyprus and, as such, cannot take advantage of the extensive Tax Treat network between Cyprus and other countries. The Cyprus resident company is characterized by "management and control" localized in Cyprus. Note also that recent tax initiatives plan to remove the distinction between taxation of resident and non-resident companies making Cyprus companies much more acceptable to the OECD.

Cyprus New Tax Legislation - important for Cyprus company formation

The new legislation came related to company registration in Cyprus into force on 1 January 2003. Under the new law Cyprus tax is imposed subject to the categories below:

Tax is imposed on the worldwide income of Cypriot residents whether nationals or foreigners.
There is no requirement for audited accounts regarding the income generated in Cyprus by any non-residents of Cyprus.
A company is considered resident if it has its management and control within Cyprus. Therefore any company that carries out operations outside Cyprus and belongs to non-residents of Cyprus and where the majority of it’s board of directors live outside Cyprus is not liable to taxation in Cyprus. This means that non-resident - offshore companies in Cyprus cannot take the benefit of any double tax treaties involving Cyprus but at the same time will not be subject to the exchange of information rules under such treaties

Information required for formation:

If a Cypriot company wishes to take advantage of the double tax treaty network of Cyprus it is highly advisable that the majority of the directors are resident in Cyprus and that all board meetings of the company take place on the island (we can arrange Cypriot nominees for this purpose). Approval of Cyprus company names	Names may be expressed in Greek or any language using the Latin alphabet. The following words will be unacceptable: asset management, asset manager, assurance, bank, banking, broker, brokerage, capital, credit, currency, custodian, custody, dealer, dealing, deposit, derivative, exchange, fiduciary, finance, financial, fund, future, insurance, lending, loan, lender, option, pension, portfolio, reserves, savings, security, stock, trust or trustees.
Shareholders & Directors	The minimum number of directors is one. They may be natural persons or bodies corporate; they do not need to be Cyprus residents. Minimum number of shareholders is one.
Registered Address	All companies incorporated in Cyprus must have a registered office in Cyprus (included into our fee).
Company secretary	All Cypriot companies must appoint a company secretary, who may be a natural person or a corporate body. The secretary is included into our fee.
Authorized share capital	The share capital must be expressed in Euro’s. The minimum authorized, issued and paid up share capital of an offshore company in Cyprus is CYP 1,000 (Approx EUR1200). For companies wishing to establish a physical presence in Cyprus, the minimum is CYP 10,000 (Approx EUR12,000). IMPORTANT NOTE. Payment of the capital can be extended in time for offshore company in Cyprus.
Tax number	Every offshore company in Cyprus is obliged to have a tax number. The number should be stated on the company invoices after Company registration in Cyprus.
Financial Statement requirements	Audited financial statements have to be submitted to the Cyprus Taxation Authority and to the Central Bank of Cyprus annually. We will be able to provide the auditors, if required.