Application of all relevant EU directives

The EU aims to establish, within its borders, a uniform economic region to its greatest possible extend. Within this process, national states increasingly loose importance.

Basically, this phenomenon is the continuation of an ongoing process since the mediaeval times. While today's Germany, for eample, was a conglomerate of regional principalities during the Middle Ages, each one applying their own fiscal and tax policies, it is now, since the founding of the Federal Republic, a unitary state, apart from the territory (federal) distinctions.

Today, Germany is a founding member of the EU and continuously undergoes transformations. More and more laws and regulations are changed to comply with EU law.

Just as the principalities of Germany waived their sovereign rights piece by piece and submitted to a common idea, the German idea, during the late Middle Ages, nowadays more and more German rights are replaced by European law, convinced of the advantageousness of a unitary European legal area.

For sure this is not a homogeneous process; there are always voices militating against giving up existing rights and privileges, but always there are other voices that are convinced of the idea and superiority of a unitary Europe and that vehemently support the process. It cannot be stopped anymore, anyway.

The Republic of Cyprus joined the EU in May 2004 as a full member. During the period of legal adaption of EU laws during the years prior to the accession, Cyprus has abolished its former "offshore" legislation and completely reissued, inter alia, its economic and tax-relevant laws. This process did provide the chance to implement EU regulations from the scratch, without the need to „alter” existing laws.

Cyprus has fully adapted all relevant EU directives in its legislation and has even optimized them in some points.

 

 

Just as you used to be (and still are) free to settle down in Berlin or Stuttgart with your German company, for instance, due to EU Directives you are now free to do so in Germany, France or Cyprus.
Within the EU, “freedom of choice" of the legal form of a company is guaranteed. Every EU citizen is free to establish a company in the member state where corporate law rules grant the largest freedoms. Then you are free to operate in any EU Member State, even in your own country, through branches or representative offices. It is explicitly not required to exercise any economic activity at the "Headquarter" of the company. The law to be applied is that of its residence state, so e.g. France, Cyprus, etc…
Restriction: The not yet fully EU-compliant tax laws in Germany, suggest a permanent establishment (place of business) in the state of the registered office, in order to benefit from EU tax privileges also in Germany.

 

 

Cyprus enjoys a sound and conclusive legal system based on the Anglo-Saxon law system. Jurisprudence is independent from legislature and performs well. The protection of property is a firmly established legally protected interest.

In Cyprus, the following maxim applies to corporate and tax:

"It is the mission of the State to protect the property of those who put their trust in Cyprus."

 

Discretion is essential in Cyprus!

In the context of Article 26 of the OECD Model Agreement about the Avoidance of Double Taxation, Cyprus has also submitted to the obligations of sharing information and of transparency. However, Cyprus meets those obligations only under certain conditions.

On the one hand, the obligation of disclosure only applies, in principle, to information concerning non-tax-residents. However, since a company established in Cyprus, is resident and taxable in Cyprus, the obligation to provide information applies only in the event of a crime which is being prosecuted.

The same applies to bank secrecy. Data of corporate clients established in Cyprus are only exposed in case of a court order.

But also the duty to supply information regarding data from non-tax-residents is subject to various conditions.

For example, the principle of reciprocity is one of those conditions. Furthermore, the existence of a constituted suspicion is required. Additionally, questions must be asked precisely. No office, no lawyer and no trustee etc. is obliged to respond to questions such as "Who shareholder of the company ABC Ltd.?" The acceptable form of the question would be: "Is Mr. Miller shareholder of ABC Ltd.?" Not allowed would be, for example: "Which company belongs to Mr. Miller?"

On top of the above conditions, a written approval of the Attorney General is required for each case in order to be obliged to provide information. Without such an approval, nobody is obliged to provide information on natural or legal persons who are not residents of Cyprus. Information on natural and legal persons, who are residents of Cyprus are not provided anyway.

.The Register of Companies in Cyprus is public. Providing the name and the register number of a company, any person may obtain a register extract at request.

 

While the deductibility of expenses is heavily restricted with all kinds of regulations and laws in Germany and other countries, and may even be prohibited, nearly all reasonable expenses, which are really associated with the management, are fully deductible in Cyprus.

In addition, there are a number of generous tax allowances.

We would gladly provide specific information on request.

 

Cyprus enjoys an excellent infrastructure. Communication standards are among the highest in the world. Fast Internet and VoIP communications are used widely and are of low cost.

The financial services sector of Cyprus is characterized by efficiency and professionalism. It is common that employees and managers receive their higher education in England, other EU countries or the United States. The long experience of Cyprus as an international financial and trade centre has led to a high degree of experience and expertise.
The financial services sector and foreign companies in Cyprus employ about 60,000 foreigners.

Nearly all banks operate separate "International Business Units" which are specialised in serving foreign clients.