Our focus on clients from the EU
Shanda Consult advises and assists its EU clients to benefit from the EU economic freedoms and from the advantages of Cyprus as a business-friendly jurisdiction for headquarters, regional headquarters, software development, research and development, shipping business, financial services, alternative investment funds (AIM) and many more.
How Shanda Consult can help you
German-managed Shanda Consult is a well-established business consulting firm and corporate and fiduciary service provider, licenced by CySEC, the Cyprus Security and Exchange Commission. Shanda Consult can advise you how to structure your business in order to benefit from the many advantages of Cyprus, including tax advantages. Shanda Consult can set up your Cyprus Company, assist with the setup of an operating establishment in Cyprus, provide various fiduciary services as well as interim management, keep up with the statutory obligations of your Cyprus Company, provide accountancy and tax services, arrange for auditing, and advise on business development. Shanda Consult can also provide assistance related to target markets of the Middle East.
Please do not hesitate to contact us for an initial evaluation of your situation and expectations.
Practical examples of Cyprus Company establishments
Some real-life examples of possible purposes of Cyprus Companies are listed below, the list is of course not exhaustive:
- Cyprus Company as trading company for international purchases and sales;
- Cyprus Company as holding company for investments in shares of other companies, including start-up investments etc. (profit generated from the sale of shares (= exit) held in other companies are not taxable in Cyprus);
- Cyprus Company as holding company for re-organisations of groups of companies, group companies being organised under the umbrella of the Cyprus Holding;
- Cyprus Company as investment companies for the investment in real estate property (correctly structured, later exits from the property investments may be tax-neutral);
- Cyprus Company as venture capital company;
- Cyprus Company for the investment in securities (profit from the disposal of securities is not taxable in Cyprus);
- Cyprus Company as regional headquarters for business activities in the Middle East and North Africa;
- Cyprus Company as regional headquarters for service activities in the Middle East and North Africa;
- Cyprus Company as regional headquarters for business engineering and maintenance services in the Middle East and North Africa;
- Cyprus Company for regional production facilities of high-value products for the markets in the Middle East and North Africa (compared with production in Europe, among other cost advantages, production facilities in Cyprus may decrease the transport time to the customers by up to 80%, this will decrease the response time and the costs for warehousing substantially);
- Cyprus Company as software development centre;
- Cyprus Company as outsourcing location to centralise recurring tasks of group companies (e.g. ICT services, marketing, pay-roll services, etc.).
Advantages of Cyprus
One of the substantial advantages of Cyprus is the fact that Cyprus implemented all economic EU directives directly into national law, in contrast to some EU countries like, for example, France or Germany, which are clipping some of the EU freedoms or discriminating those who want to make use of their EU freedoms, for the sake of national concerns such as mainly tax revenues.
As the most Eastern EU member state, the proximity of Cyprus to the Middle East, together with its long history as a business hub in the Eastern Mediterranean, makes Cyprus and ideal and safe place to manage and to control business and service activities in the Middle East.
While Cyprus is fully compliant with all EU directives related to tax matters and financial matters, it provides tax advantages such as a business-friendly corporate tax rate of 12,5 % on taxable income. Cyprus also offers certain tax exemptions on income from the utilisation of intellectual property. Income from the disposal of securities in its widest sense, including company shares, is exempted from tax.
Licensable business such as insurance business, tourism agencies, financial services, investment consultancy and many more do benefit from the EU freedom of services. This basically means that such a licence obtained in one EU country allows conducting the licenced business activities in all and any EU country, without the need of additional permits in the other EU country.
It is often substantially less costly to obtain a specific licence in Cyprus than in other EU countries. Often it is also easier to obtain such a licence in Cyprus, because Cyprus implemented the respective EU law as it is, without creating additional hurdles.
Cyprus offers many other advantages, like for example a highly educated labour market with very moderate salaries, compared with many other EU countries.
Basics of the economic freedoms of the European Union
The EU Community acquis (the accumulated legislation, legal acts, and court decisions which constitute the body of European Union law) provides for four economic freedoms, which are established both in the Treaty of Maastricht from 1994 and in the Lisbon Treaty from 2007 (Treaty on the Functioning of the European Union (TFEU)) and which constitute fundamental rights of all EU citizens and EU entities.
Those four EU economic freedoms are:
- the free movement of goods,
- the freedom of establishment and the freedom of services,
- the free movement of labour, and
- the free movement of capital.
Although all four freedoms were guaranteed by the Treaty of Maastricht and the Lisbon Treaty, further clarifications and clear and legally binding EU provisions became necessary in order to ensure equal implementation and treatment in all EU member states, and in order to ensure the avoidance of discrimination in the EU member states. Thus, the EU successively implemented the first three rights mentioned above into its law, basically through EU directives. The realisation of the legal implementation of the fourth freedom, the freedom of movement of capital, is currently (beginning 2017) an undergoing project named CMU (Capital Markets Union). While the free movement of capital and its subordinated rights already became part of our daily life, the EU plans to build a true single market for capital in the EU by 2019.