Cypriot companies and trusts offer a wide range of applications for tax planning and optimization, as well as for asset protection.

The combination of different structures in particular results in a scope of possibilities that can hardly be fully described here.

Cypriot companies and trusts are excellently suitable for both individuals and companies. In the two sections below we have listed a few examples from our experience of the last years.

We will be happy to answer your questions regarding your specific situation, please feel free to contact us.

International Trading Companies, Agencies, Import / Export

If you are engaged in international trade business, Cypriot companies provide the advantage of having commercial profits and commissions acrued on the level of the Cyprus company. Goods that are sold from A to B are invoiced through the company in Cyprus, in such a way, that the main part of profit acrues at the Cyprus company.

The profit of a tax-resident Cyprus company with a permanent establishment in Cyprus is taxable with 10% corporate tax. Dividend payments of that company are not taxable in Cyprus in any case, because there is neither any tax on dividend distributions to foreign shareholders nor any withholding tax in Cyprus.

Construction Business

Because of its favorable tax legislation, Cyprus is an excellent location for the construction industry. A Cypriot holding company, which holds subsidiaries in other countries, causes significantly reduces the general tax burden.
Additionially, significant advantages arise for personel expenses, if your engineers, site managers, etc. stay in a different European country for periods short enough to avoid any tax liability in the other country.

E-Business, Internet Trading

Many non-European companies incorporate companies in Cyprus to sell goods or services to Europe over the Internet. As for Online sales within the European Union, invoicing of value added tax is essential and thus a company within the EUR is required to proceed accordingly. Such a company will also provide the advantage of a very low tax rate or tax exemption in some cases.

If you sell goods and services Online also to other countries in the EU or outside of the EU, a company incorporated in Cyprus is highly recommended.

Employment Firms

Especially if you employ staff, which is depolyed to various European or non-European countries for a relatively short period in each country, a Cypriot company is particularly suitable.
Because of the double taxation agreements of Cyprus, the company will benefit from the advantage that the salary of staff acrueing in the respective countries of deployment will not be taxed in those countries if staff does not stay exceeding periods in each country (specific periods vary from country to country).
In Cyprus, staff would be exempt from income tax because it does not work in the country.

Financing and Investment

Cyprus is an excellent location for investment companies and financing companies of company groups.
Profit accruing from the trade with or the ownership of securities and stocks are completely tax free in Cyprus. Due to the recently expanded definition of non-taxable securities (see, “Taxation of Profits from Disposal and Trading of Securities” under “Tax benefits”), Cyprus is very advantageous as a jurisdiction for any kind of open and closed investment funds, which may be advertised in Germany and other EU countries without a license from Bafin or respective Financial Supervisory Authorities.

Company groups may transfer profits and/or losses as well as receivables to a Cypriot company and benefit from Group Taxation, where the losses of a group company can be offset with the profits of another group company while determining the taxable profit of the group.

Please pay attention to our detailed information about investment funds companies in the section “Fund Companies” under above menu item “Examples of Structures”

Venture Capital Companies

Venture Capital Companies may benefit from various incentives and benefits in Cyprus. In return of capital provided, a company or holding company may hold shares, whose dividends would be received tax-free in Cyprus. Income deriving from a later repatriation of those investments or their disposal is not taxable in Cyprus.

The healthy and professional banking system in Cyprus with its focus on international financial transactions as well considerate approach to business proposed are additional important factors that inure to the benefit of smooth transaction processing.

Trademark Rights, Royalties etc.

If trademark rights and royalties constitute a part of the revenues of your company, a Cyprus company suggests the worldwide administration of those rights and licenses and the accumulation of fees deriving from the administration of rights and licenses.
Depending on the country you come from and depending on how you want to proceed with the accumulated license fees, you may benefit from varying solutions.

Leasing

If larger machinery and equipment is part of your company’s assets, a Cypriot company would be highly recommended.
You could sell the already depreciated machinery and equipment of your company to the company in Cyprus, which leases it back to your actual company.
The purchase of machinery and equipment authorizes the Cypriot company to write off/allows depreciation of nachinery purchased. Your actual company will be charged with the leasing fee, which will reduce the taxable income of your company.

Insurances

During recent years, Cyprus has emerged to a popular location for insurances, particularly but not only for insurances owned by group of companies, for the group’s own necessities ("Captive Insurances").
Many tax exemptions for international insurances, an straightforward registration as well as the usual low tax rates and the availability of experienced staff on favourable terms will give this sector significant impetus in the coming years.

Real Estate

If your company holds real estate in its assets, you transfer it to your company in Cyprus. This does not save you from the annually levied taxes on real estate, but you could save the taxes on the profit from possible later sales, as you would not sell the property itself, but your company in Cyprus or its shares. Selling the shares of the Cyprus Company would not change the ownership of the property itself in your country and would also avoid fees for he transfer of Deeds with the Land Registrar.

Moreover, with this popular structure it would be possible charge fees for usage rights of the property.

Shipping Companies / Ship Management Companies

For decades, the Republic of Cyprus is one of the world's largest flag countries in the professional navigation. Hundreds of international shipping companies have registered their ships under the Cyprus flag and operate partially from Cyprus. If you walk along the promenade in Limassol, you may get an idea of it.

Shipping companies and ship management companies as well as ship personnel companies enjoy a series of extraordinary tax incentives and benefits. The general corporate income tax for shipping companies is 4.25% of the taxable profit. An additional incentive is the option to tax on tonnage, depending on which variety ensures the lower total tax.

Airlines

Similar to shipping companies, Cyprus also offers significant advantages for airlines. Airlines may re-flag their fleets, or operate through a Cypriot Holding, under whose umbrella various companies may be operated mostly in Europe or worldwide.

A prominent German example for utilizing tax benefits on the basis of advantageous EU directives by means of intra-tax incentives is the well known Air Berlin.

But also smaller airlines that offer, for example, executive charter flights with business jets, can obtain significant advantages over their competitors, with a holding company in Cyprus.

Alternative Energy

Companies operating in the area of alternative energy, may it be production of equipment, operation of facilities or investment in this sector, mostly operate Europe-wide.
What would seem more likely than restructuring the operations in order to increase the your own return on investment, thus strengthening your position against your competitors?

Wealth Protection in General

As a former British colony, Cyprus nowadays benefits from its long-established tradition of wealth protection. The clearly and beneficially devised trust legislation allows property protection at the highest level.

You may appoint trustee directors and trustee shareholders for your company, and you may secure your assets sustainably taking advantage of the benefits of Cypriot trusts.

Cyprus offers many possibilities of wealth protection for both individuals and companies.

Please refer to ‘The Cyprus International Trust’ in the section ‘Examples of structures’.

The examples listed above do only describe some of the possible utilisations. The selection represents our experience over the last years, but possibilities are not limited to the industries mentioned.

Let’s talk and find out how you might benefit from Cyprus!

 

Self-Employed Persons and Freelancers

An impressive number of self-employed persons and freelancers of various professions takes advantage of the benefits of Cyprus’ tax incentives especially since its EU accession.

Self-employed persons and freelancers, whose income arise from their know-how and their direct, personal involvement, such as architects, business consultants, legal advisors, artists, doctors, as well as key figures from multi-level marketing, or high-ranking managers often switch over to offering their services or part of their services through companies in Cyprus.

In this respect, possible solutions highly depend on the specific circumstances and interests of the individual person. In order to meet your requirements specifically we like to recommend contacting us.

Heirship Planning

Unfortunately, conflicting interests regarding heirship issues sometimes already emerge during lifetime of the future heirs. Under a given inheritance law it is often difficult to arrange subsequent disposition of own assets as desired.
Furthermore, the unreasonably high taxation on bequest in many countries has a particularly unpleasant effect as well.

A Cyprus company, or a Cyprus Trust, offers a variety of creative options to regulate heirship matters in accordance with one’s own will and not to burden bequest with inheritance tax.

Find out more by contacting us!

Wealth Protection

There are many important reasons to protect your valuable assets.
Be it considerations regarding heirship as mentioned above, be it a possible insolvency, expected marital disputes, or simply the righteous desire to maintain wealth, safe from state-access, asset protection may be desirable in many situations.
It is of importance, however, that asset protection is planned and implemented in time, in order to be on the save side when unexpectedly necessary.

As a former British colony, Cyprus nowadays benefits from its long-established tradition of wealth protection. The clearly and beneficially devised trust legislation allows property protection at the highest level.

From the incorporation of an individual, asset holding company to a secure Trust (Foundation), Cyprus offers many ways to secure your wealth effectively.

Cyprus’ various possibilities of property protection are available for both individuals and companies.

Please refer to ‘The Cyprus International Trust’ in the section ‘Examples of structures’.

Real Estate

You may, for example, transfer real estate property to your company in Cyprus in order to protect it against legal action. Transferring your real estate property to a Cyprus Company will not save you annually levied taxes on real estate, but you would save income tax on income from the sale of the property in your country, as you would sell your Cyprus Company’s shares instead of the property itself. This would not cause change of your property’s ownership in your country.

This popular procedure is often applied to protect immobile assets against the threat of insolvency or an imminent conflict regarding marriage law, and/or to save up-coming taxes and fees from a future sale of the property.