Yiannis Argyrides – Y. Argyrides & Associates Law Firmhttps://www.argyrides-law.com Cyprus-based International LawyersTue, 26 May 2020 11:57:54 +0000en-US hourly 1 https://wordpress.org/?v=5.8.4https://www.argyrides-law.com/wp-content/uploads/2019/08/cropped-ARGYRIDES_LAW_-LOGO_ONLY-01-copy-32x32.pngYiannis Argyrides – Y. Argyrides & Associates Law Firmhttps://www.argyrides-law.com 3232Y. Argyrides & Associates LLC featured on the Ukrainian Embassy’s (Cyprus) websitehttps://www.argyrides-law.com/y-argyrides-featured-ukrainian-embassy-cy-website/?utm_source=rss&utm_medium=rss&utm_campaign=y-argyrides-featured-ukrainian-embassy-cy-website Wed, 06 May 2020 06:59:33 +0000https://www.argyrides-law.com/?p=7162006Y. Argyrides & Associates LLC has had the pleasure of collaborating through the years with Ukrainian professionals and successfully representing Ukrainian organisations and individuals.  It is only natural for the firm to be delighted that it is now in the position to announce that it has made it into the Ukrainian Embassy’s (Cyprus) list of...

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Y. Argyrides & Associates LLC has had the pleasure of collaborating through the years with Ukrainian professionals and successfully representing Ukrainian organisations and individuals. 

It is only natural for the firm to be delighted that it is now in the position to announce that it has made it into the Ukrainian Embassy’s (Cyprus) list of acknowledged legal firms for Ukrainian organisations and individuals seeking legal representation in the Republic of Cyprus. 

The list currently includes only 7 select legal firms island wide, with Y. Argyrides & Associates LLC being the only firm located in Larnaca. 

A testament to the quality of our services, as well as the international appeal of our firm, Y. Argyrides & Associates LLC continues to establish itself as the go to place for legal representation at a global level. 

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Y. Argyrides & Associates LLC takes the lead in the establishment of Cyprus International Trustshttps://www.argyrides-law.com/leaders-in-the-establishment-of-cyprus-international-trusts/?utm_source=rss&utm_medium=rss&utm_campaign=leaders-in-the-establishment-of-cyprus-international-trusts Fri, 20 Mar 2020 14:05:38 +0000https://www.argyrides-law.com/?p=7161954Cyprus International Trusts Boasting an already attractive package as an international business and financial hub due to its unique location, modern infrastructure, accessibility, stability and great relationship with virtually all countries in the world, Cyprus has further advanced its unique position by fundamentally reforming its relevant trusts legislation over the years.  An increasing number of...

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Cyprus International Trusts

Boasting an already attractive package as an international business and financial hub due to its unique location, modern infrastructure, accessibility, stability and great relationship with virtually all countries in the world, Cyprus has further advanced its unique position by fundamentally reforming its relevant trusts legislation over the years. 

An increasing number of professionals chose Cyprus to set up their International Trusts due to the unique environment offered by Cyprus Law, which is based on the popular English law and principles to begin with. Nowhere else in the world can one find so many advantages concentrated in a single trust jurisdiction. The fact that Cyprus is a member of the European Union only adds to the already comprehensive package. 

Some of the advantages of setting up trusts in Cyprus include:

  • The establishment and administration of trusts is very attractively priced
  • A unique blend of tax exemptions and double tax treaties
  • Registration requirements are minimal
  • High confidentiality / anonymity
  • A comprehensive legal or otherwise infrastructure
  • The flexibility and adaptability of the Cyprus International Trusts law
  • The level of protection and flexibility provided to trust structures
  • Possibility for a trust to be redomiciled to another jurisdiction

Now let’s look into the Cyprus International Trusts Law in detail: 

 

The Cyprus International Trusts Law

The law governing Cyprus International Trusts (the “CIT”) is the International Trusts Law of 1992, as has been amended from time to time (the “Law”). The Law aims to attract non-Cypriot Tax Residents for establishing a hereditary vehicle in the Republic of Cyprus in order to protect their properties/private assets located anywhere in the world including property situated in Cyprus, and simultaneously benefit by Cyprus tax regimes. 

Who are the main participants of a CIT?

  • The Settlor is the person who creates the CIT and is the owner of the initial property placed under the CIT. He must not be a Cyprus tax resident the year before the establishment of the trust. Also, the Settlor must be of full age (18) and of sound mind in accordance with the law of the country which he is resident;
  • The Trustee is the person (individual or company) who agrees to hold the trust property in his/its name for the benefit of the Beneficiary under the terms of the trust deed. The Trustee must be a Cyprus Tax Resident (or at least one of the trustees must be a Cyprus Tax Resident). The Trustee has the legal title to the trust assets;
  • The Beneficiary (individual or company) who is entitled to a right or interest in property which is subject to the trust. The Beneficiary must not be a Cyprus tax resident the year before the establishment of the CIT. The term includes persons that were not yet born at the time of the creation of the Trust, and also persons who are part of a class of people;
  • The Protector (not compulsory) is the person other than the Trustee to whom powers of any nature are conferred by the trust instrument, including the power to advise a Trustee as to the exercise of the trustee’s powers, the rights of the Trustee in respect of a consent or veto, and includes the right to appoint or remove a Trustee.
  • The Enforcer means a person or persons whose duty is to enforce an international trust, with the exception of trusts for charitable purposes in accordance with the Law.
 

Can a CIT be irrevocable?

According to the Law, a CIT is irrevocable unless a specific power of revocation is clearly stated by the Settlor. 

What is the applicable law and the respective court jurisdiction?

Pursuant to the provisions of the Law, the Settlor may choose the law which will govern the CIT. In cases where no applicable law has been chosen, then the CIT will be governed by the law which is more closely related to the CIT (the Law provides relevant guidelines in this respect). 

Based on the provisions of the Law, the Cyprus Courts, if one of the following circumstances apply, shall have exclusive jurisdiction on a CIT: 

  • (a) where the applicable law of the Trust is the law of the Republic; or
  • (b) where the Trustee is a resident of the Republic; or
  • (c) where the company acting as a Trustee has been incorporated in Cyprus; or
  • (d) where any asset of the Trust is situated in Cyprus; or
  • (e) where the administration of the Trust is performed in Cyprus; or
  • (f) where the parties to the Trust accept the jurisdiction of the Cyprus courts; or
  • (g) where the Trust refers any dispute to the Courts of the Republic.
 

What are the advantages of a Cyprus International Trust? 

I. Settlor may reserve powers 

According to the Law, the Settlor may reserve for himself certain powers/rights either in his capacity as Settlor, or as Protector or as Enforcer of the Trust, such as:

  • i. To revoke, vary or amend the terms of the Trust;
  • ii. To grant, distribute, pay or dispose in any form of either income or capital of the Trust, or give instructions with respect to these;
  • iii. The right to appoint or remove any Trustee, Enforcer, Protector, Beneficiary, Investment management or investment consultant;
  • iv. To alter the applicable law of the Trust or the forum of the administration of the Trust;
  • v. The ability to confine the exercise of the powers or the discretion of the Trustee by imposing a stipulation that these will be exercisable only with the consent of the Settlor or by any other person so specified in the terms of the Trust;
  • vi. To give binding instructions to the Trustee in connection with the Trust property; and
  • vii. The ability to act as director or officer or give binding directions with regards to the appointment or removal of any director or officer of any cooperation which is wholly or partially owned by the trust.
 

II. The CIT might be amended from time to time 

The Law permits an alteration to the terms of the CIT if it is permitted by the CIT itself or after being approved by the Court. 

III. The duration of the CIT 

Provided that it is not otherwise indicated in the CIT, there shall be no limit on the period for which the trust is valid and enforceable. 

IV. Confidentiality of CIT 

First of all and most importantly, trust registers maintained by the competent authorities are not publicly available. 

Furthermore, the Law prohibits the disclosure of any information or documents regarding the CIT by any person (including the Trustee). Only the court may allow such disclosure of information/documents, to the extent that such disclosure is important to the result of a particular civil or criminal proceeding. 

V. Taxation 

Income or profits which are acquired or deemed to be derived from outside Cyprus are not taxable in Cyprus if the beneficiary is not a Cyprus tax resident. Income and profits sourced from Cyprus are taxable in Cyprus, irrespectively if the beneficiary is a Cyprus tax resident or not. Nevertheless, all income and profits of a CIT which are acquired or deemed to be derived from sources inside or outside Cyprus are taxable in Cyprus provided that the Beneficiary is a Cyprus tax resident. 

Passive income (dividends/passive interest) received by a CIT from a Cyprus company are not subject to tax nor subject to withholding tax. 

VI. Asset Protection 

The Law provides that notwithstanding the provisions of any bankruptcy or liquidation laws in the Republic or in any other country, unless it is proven to the court that the CIT was established with intent to defraud the creditors of the Settlor, the CIT shall not be void or voidable. 

 

Why Y. Argyrides & Associates LLC is the go to place to establish a Cyprus International Trust

Y. Argyrides & Associates LLC feature an established track of record in offering comprehensive business & legal solutions to international and local businesses here in Cyprus. 

With decades’ worth of experience and the establishment of countless trusts for its clients, the firm is in the unique position to advice multinational clients as to the creation of trusts as well as to the choice of the best possible structure. 

Furthermore, the firm may draft the trust instrument and any other legal document required under the Law. 

Y. Argyrides & Associates LLC supports and assists clients in terms of provision of trustee, administration and management services for the CIT. 

Lastly, the firm advises clients regarding any issue related to trusts under the Law, trustee powers, beneficiary rights, interpretation of trust deeds and other trust related documentation and represents them in court. 

 

Contact Us

Looking forward to establishing an International Trust in the Republic of Cyprus?

Our experienced team is here to provide you with comprehensive services in all aspects of your business including setting up international trusts. We would be glad to disclose more information as well as offer our assistance. Feel free to get in touch with us by sending us an email at info@argyrides-law.com

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Cyprus-India | Unique opportunities for Business and Investmentshttps://www.argyrides-law.com/cyprus-india-unique-opportunities-for-business-and-investments/?utm_source=rss&utm_medium=rss&utm_campaign=cyprus-india-unique-opportunities-for-business-and-investments Tue, 03 Mar 2020 09:41:58 +0000https://www.argyrides-law.com/?p=7161936Y. Argyrides & Associates LLC and Perfect Circle Trust LTD meet the High Commissioner of India to the Republic of Cyprus Seeking to strengthen and solidify Cyprus’ unique position as an attractive global business hub as well as to increase awareness and establish connections with leading world-renowned businesses, the partners of Y. Argyrides & Associates...

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Y. Argyrides & Associates LLC and Perfect Circle Trust LTD meet the High Commissioner of India to the Republic of Cyprus

Seeking to strengthen and solidify Cyprus’ unique position as an attractive global business hub as well as to increase awareness and establish connections with leading world-renowned businesses, the partners of Y. Argyrides & Associates LLC and Perfect Circle Trust LTD, Yiannis Argyrides and Kyriaki Gerolemou have recently met with the High Commissioner of India to the Republic of Cyprus. 

Mr. Argyrides and Mrs. Gerolemou were delighted to have personally met with Her Excellency, Ms. Madhumita Hazarika Bhagat at the High Commission of India in Cyprus, and are grateful for the productive conversation. 

The meeting’s main focus was India’s relationship with Cyprus including opportunities in establishing a solid foundation for a long and fruitful cooperation. The benefits and need for professionals such as lawyers and accountants in making bilateral ties a success were also on the agenda. 

Y. Argyrides & Associates LLC and Perfect Circle Trust LTD wish to thank HE Ms. Madhumita Hazarika Bhagat for her hospitality and time, and are looking forward to a long lasting collaboration both with the High Commission as well as with business professionals in India. 

CYPRUS-INDIA: Unique opportunities for Business and Investments

Cyprus and India have traditionally enjoyed excellent political and economic relations, based on a deep friendship, mutual respect and close cooperation with these relations only strengthening over time. 

Influenced by the mutual support and the similarities in culture and traditions of the two countries, Cypriot and Indian entrepreneurs are seeking opportunities to build good, strong and lasting business relationships. 

Why Indian entrepreneurs consider Cyprus as the best place to relocate or establish their businesses

SIMILARITIES IN THE LEGAL SYSTEMS

The Indian and Cyprus legal system administers the common law system. They have in fact, inherited the legacy of the legal system established by the colonial powers. Α bright example is that, the Cyprus Contract Law Cap 149 is very similar and to some extent identical to Indian Contract Law. As a result, there are many examples in Cyprus case law where the interpretation of Cyprus Contract Law Cap 149 is based on Indian sources. 

BILATERAL INSTITUTIONAL ARRANGEMENTS

At this age and time, India and Cyprus are keen on promoting and upgrading their bilateral relations, increasingly focusing on economic, scientific, technical and tourist cooperation. 

Main bilateral institutional arrangements signed between the two countries: 

  • i. In March 2001, the two countries signed a protocol institutionalizing Foreign Office consultations (FOC) on an annual basis. 
  • ii. India and Cyprus signed an Agreement on Economic, Trade, Scientific and Industrial Co-operation in April 1989, following which the Joint Economic Committee (JEC) was established. 
  • iii. In order to facilitate cooperation in Science & Technology, with the possibility of commercial application in this field, a MoU providing for joint research and development projects and joint ventures in S&T was signed in October 2002. 
  • iv. The MoU on IT and Services was signed in October 2002. The Cypriot side has a common JWG to implement the MoU on S&T and the MoU on IT. 
  • v. In September 2005, Cyprus-India Business Association (CIBA), was established under the auspices of the Cyprus Chamber of Commerce. Y. Argyrides & Associates LLC is a member of CIBA and soon to be a Board Member. 

ECONOMIC RELATIONS BETWEEN THE TWO COUNTRIES

Since the 1960s, the importance of economic development and economic relations between the two countries, has drawn much attention worldwide. 

Cyprus and India have achieved many economic developments. As per the DIPP figures, Cyprus is the 8th top investor in India. 

CYPRUS-INDIA TREATY FOR THE AVOIDANCE OF DOUBLE TAXATION

A double tax treaty was signed by Cyprus and India on 18 November 2016 and has been revised on 21/04/2017. 

Capital Gains Tax 

The agreement provides for source-based taxation for gains derived from the alienation of shares. Investments made before 1.4.2017 are “grandfathered” with the view that taxation of disposal of such shares at any future date remains with the contracting state of residence of the seller. 

Withholding tax rates 

Under the new treaty, the following withholding tax rates apply: 

  • i. Dividends: 10% 
  • ii. Interest: 10%  
  • iii. Royalties: 10% 

The above rates are relevant in the case of dividends paid from India. Cyprus does not impose withholding taxes except on Cyprus sourced royalty payments. 

Fund opportunities 

Cyprus fund industry is rapidly evolving, turning Cyprus into the new investment fund center in Europe. The Cyprus‐India treaty allows and promotes Indian investors to establish, in the Republic of Cyprus, tax efficient fund structures, under a highly regulated environment in line with European Directives and be benefit from Cyprus tax neutrality, speed and flexibility of the Cyprus fund sector. 

EMBASSY

India maintains a High Commission in Nicosia. Cyprus maintains a High Commission in New Delhi, which is jointly accredited to Bangladesh, Malaysia, Myanmar, Maldives, Nepal, Sri Lanka, Thailand and Vietnam. 

Why Y. Argyrides & Associates LLC and Perfect Circle Trust LTD are the logical choice

Both Y. Argyrides & Associates LLC and Perfect Circle Trust LTD feature an established track of record in assisting in the establishment, development and growth of multi-national businesses here in Cyprus. 

Strategically located only a short distance away from the island’s international airport, both offer unique accessibility to global clients. 

Offering a client-centered approach, these boutique law firms are renowned for their personal and business oriented touch. The firms are well connected and well established in Cyprus and abroad, and offer a unique blend of high quality, specialized services in the Corporate and Banking sectors.  

CONTACT US

Looking forward to establishing your business in the Republic of Cyprus?  

Our experienced team is here to provide you with conclusive services in all aspects of your business. We would be glad to disclose more information as well as offer our assistance. Feel free to get in touch with us by sending us an email at info@argyrides-law.com

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Cyprus Investment Program | Highlightshttps://www.argyrides-law.com/cyprus-investment-program-the-benefits/?utm_source=rss&utm_medium=rss&utm_campaign=cyprus-investment-program-the-benefits Fri, 11 Oct 2019 08:35:37 +0000https://www.argyrides-law.com/?p=7161889Cyprus, An Attractive Destination The strategic location of Cyprus, situated at the crossroads of the busy shipping and air routes of three continents – Europe, Asia and Africa, has indeed contributed significantly to its economic growth.  Due to the country’s membership in the European Union since 2004 and the European Monetary Union since 2008, foreign...

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Cyprus, An Attractive Destination

The strategic location of Cyprus, situated at the crossroads of the busy shipping and air routes of three continents – Europe, Asia and Africa, has indeed contributed significantly to its economic growth. 

Due to the country’s membership in the European Union since 2004 and the European Monetary Union since 2008, foreign investors have the opportunity to freely access the EU market, at a relatively low cost and with fewer risks across the eurozone. 

Cyprus’s EU membership ensures safety and stability for investors, offering transparency and efficiency in transactions. Transparency in business practices is additionally guaranteed by Cyprus’ prosperous legislative and regulatory framework, which is based on English Common Law principles.

Thus, the effective, reliable and business-friendly legal system of Cyprus is also entirely compliant with the EU, Regulations, EU AML Directives and the Financial Action Task Force on Money Laundering (FATF). Not only that, but Cyprus actively participates in a plethora of EU programmes, encouraging Foreign Direct Investment (FDI) opportunities and focusing on its economic, innovation and entrepreneurship growth. 

Cyprus Investment Programme (CIP) Considerations

The government of the Republic of Cyprus (“Cyprus”) has established a variety of incentives to attract foreign direct investment into the country. 

The Investment Programme (CIP) is one of them, which respectively grants full Cypriot citizenship to non-Cypriot citizens that invest more than EUR 2 million and meet certain requirements set out by the Council of Ministers of the Republic of Cyprus. The Cyprus Investment Programme is based on subsection (2) of section 111A of the Civil Registry Laws of 2002-2019. The latest amendments to the CIP are effective from the 15th of May 2019 onwards. Any non-Cypriot citizen may apply for the Cyprus Investment Programme if they meet one of the investment requirements discussed below. 

The qualification may either be done personally or through a company in which the applicant acts as a shareholder or as a high-ranking senior manager or through investments made by their spouse. 

Amendments to the Cyprus Investment Programme (CIP):

On the 15th of May 2019, the Council of Ministers has revised the existing programme and has made certain amendments to the Cyprus Investment Programme. After the May amendments and onwards, investors applying are required to make donations amounting to at least € 75.000 to the Research and Innovation Foundation AND at least € 75.000 to the Cyprus Land Development Corporation. Exemption from the requirement above is granted in cases where the applicant has:

a. Invested at least €75.000 in a certified innovative or a certified social enterprise 

b. Made an investment of a total amount equalling to the 20% of the minimum required investment amount (i.e. €400.000) in Cypriot companies which are operating within the primary or secondary sectors of the economy (excluding the construction sectors), or in the fields of research, health, education, technology and renewable energy. 

Another requirement is that an investment must be made in ONE of the following options: 

1. Investment in real estate, land development and infrastructure projects. The investment should amount to at least € 2 million. 

2. Investment in Commercial Properties. There has to be purchase/establishment/ participation in Cypriot business and companies, amounting to at least € 2 million in companies or organisations which possess a physical and tangible presence in Cyprus and employ at least 5 Cypriot or EU citizens. 

3. Investment in Alternative Investment Funds or financial assets of Cypriot companies /organisations licensed by the Securities and Exchange Commissions of at least € 2 million. 

4. Combination of the above investments analogous to a total of € 2 million.

Another essential requirement that applies is the purchase of a permanent property in Cyprus. The purchase price of the particular property should be at least EUR 500,000 plus VAT. In case the applicant proceeds with the real estate option, this property can be included in the EUR 2 million investment.

Furthermore, the Law provides for the granting of the Cypriot citizenship to the spouse and the children who are not obliged to meet any additional financial criteria. Cypriot citizenship can also be obtained by the parents of the investor on the basis of the amendments of the CIP. However, an additional financial criterion applies in relation to the parents of the main applicant, amounting to EUR 500,000 plus VAT.

Amendments on the Terms and Conditions:

  • Clean Criminal Record: The applicant and their family members that will apply, must ensure that they have a clean criminal record declaring respectively any citizenship applications they might have made in any other Member State.
  • Schengen Visa: Adult applicants should be in possession of a valid Schengen Visa. Individuals who were rejected a visa by any other EU state will be ineligible for submitting an application. 
  • Residence in the Republic of Cyprus: Prior to their naturalisation, the applicant must hold a residence permit in Cyprus for a period of at least six months.

The Advantages of the Cyprus Investment Programme

Cyprus Investment Program is provided by the government with a permanent ministerial decree, and also, it has been approved by the EU. The CIP is one of the fastest procedures available, among other investment programs.

Generally, individuals who have obtained their Cypriot citizenship can enjoy freely the four freedoms of the EU set out in the Treaty of Rome and then strengthened by the Treaty of Lisbon – free movement of goods, services, capital and persons within the EU. 

As a consequence, applicants can benefit from various advantages such as visa-free travel to a large number of countries worldwide, free move of capital, live and work under the policies of the European Union. 

The applicant and his family can possibly enjoy the right to education, business, employment in any EU Member State and also, in the Member States of EFTA (European Free Trade Association).

Finally, Cyprus Legislation allows for a Dual Citizenship for its citizens, and it is not necessary to continuously reside in the Republic of Cyprus before or after the approval of the application. 

How can we help?

As the information is general, and the legislation is subject to change we strongly encourage you to contact our office to obtain detailed and updated advice specific to your own circumstances. 

Our law firm can assist you from A to Z to establish your presence in Cyprus.

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Cyprus Company Formation: All you need to know about setting up a company in Cyprushttps://www.argyrides-law.com/cyprus-company-formation/?utm_source=rss&utm_medium=rss&utm_campaign=cyprus-company-formation https://www.argyrides-law.com/cyprus-company-formation/#commentsSun, 08 Sep 2019 20:09:37 +0000https://www.argyrides-law.com/?p=7161837Cyprus offers a very attractive base for setting up a company. With a tax rate on corporate profits of only 12.5%, one of the lowest in the European Union, the Mediterranean island is increasingly attractive to international business people who look for better alternatives for their corporate matters. Moreover, Cyprus has secured double tax agreements...

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Cyprus offers a very attractive base for setting up a company. With a tax rate on corporate profits of only 12.5%, one of the lowest in the European Union, the Mediterranean island is increasingly attractive to international business people who look for better alternatives for their corporate matters. Moreover, Cyprus has secured double tax agreements with more than 60 countries, ensuring protection against the risk of double taxation for the same income in two states and providing assurance of an aligned treatment for cross-border trade.

Setting up and leading a business in Cyprus is beneficial as the island has a modern, free-market, service-based economy giving both international investors and domestic businesses the confidence to invest, grow and prosper.

Generally, the procedure of establishing a company in Cyprus is a straight forward one, for both EU and non-EU citizens. Moreover, foreign investors in Cyprus are also given the unique opportunity to obtain a Permanent Residence Permit and even Cyprus citizenship. It’s important to note that there are no specific requirements for foreigners wishing to establish a business presence in the country.

The Procedure for Company Formation

The majority of companies incorporated in Cyprus are private limited liability where the liability of the shareholders is limited to the amount unpaid on their shares. The law regulating this procedure is Cyprus Companies Law, CAP 113 which is based on the Companies Act 1948 of the United Kingdom and applies both to Private and Public companies. 

Legal Forms of Corporate Entities in Cyprus:

– Cyprus Company

– Branch of a Foreign Company

– Partnership

– Sole Proprietor

– Cyprus International Trust

– Cooperatives 

First step: finding a service provider in Cyprus

Cyprus company formation and company registration require a licensed service provider to undergo thorough due diligence and compliance, based on rules of the EU.

The starting point of the procedure, for both residents and non-residents, is to appoint a lawyer/service provider who would also act as a registering agent and proceed with the preparation of all the necessary documents for the registration of the Cyprus Company. 

An essential point to be noted is that, according to the Cyprus law, only lawyers licensed by the Cyprus Bar Association are allowed to prepare and sign the Memorandum, Articles of Association of the company and the HE1 form. As such, the legislation does not make any distinction between residents and non-residents, as both have to appoint a service provider. Our team is specialized to help you with this process.  

Approval of the company name

The procedure of a Cyprus Company registration begins with an application for registering a company which is to be submitted to the Registrar of Companies. Formal approval to use the name is required from the Registrar before the name can be used. It is essential to be noted that as a matter of good practice, legal advisors in Cyprus usually maintain a number of company names which are already approved by the Registrar and are offered to clients for whom speed is of the essence. Moreover, the Registrar is allowed to object names and a name would not be accepted if it is misleading. Those who have decided to acquire a ready-made (shelf) company can later apply for a name change. 

Memorandum of Articles and Association

Upon approval of the Company name, the applicant shall submit in detail information such as the activities of the company, the amount of the share capital, the internal regulations etc., to their lawyer to prepare the Memorandum of Articles and Association.

Minimum Capital

Cyprus companies usually have authorized and issued share capital of €1,000. However, there is no minimum share capital requirement for the incorporation of a Private Limited Company. Each subscriber to the Memorandum must subscribe for at least one share. For a Public Limited Company, the minimum share capital is € 25,629.

Surely, a paid capital which reflects the actual business is advisable for the financial standing of the company in Cyprus.

Administration 

According to the law, each company should appoint at least one Shareholder, who can respectively be either a physical person or a legal entity. Except for the Shareholder, Cyprus Limited Companies also have to appoint at least one Director and one Secretary. If there is only one member, they may act as both the director and the secretary. Although there are no nationality requirements imposed on Directors, in order for the company not to lose its tax advantage of a low tax rate of 12,5%, it is recommended that the majority of Directors are of Cypriot Residence or foreigners living permanently in Cyprus. 

Registered Office

It must be noted that the Registered Office of the Cyprus Company must be any address located in Cyprus and the address can be appointed at the service provider’s office as well. 

Submission of documents at the Department of Registrar of Companies and Official Receiver

Once the company name has been approved by the Registrar, the following documents must be submitted for the registration of a Cyprus Company:

1. Declaration Form (HE1)

2. Declaration Form concerning the registered office address (HE2)

3. A form containing details on the Company Directors and Secretary (HE3)

4. Original Memorandum and Articles of Association which have to be signed by:

(a) the subscribers to the Memorandum whose signatures must be attested by at least one witness; and

(b) the lawyer who has drawn up the same.

Once the Certificate of Incorporation is obtained, all companies must register with the Tax Department in order to secure a tax identification number and a VAT registration number, as well as with the Social Insurance Services. The last step in incorporating a company in Cyprus is registering at the Ministry of Labor for the Social Contribution.

Substance in Cyprus

The concept of economic substance in tax planning is a continuously evolving and increasingly significant topic area in the global economy. The term “substance” is usually used to demonstrate real/physical presence of legal entities in their country of tax residence. The substance is commonly considered together with the tax residency test, and it is linked with the effective management and control of a corporation. 

Due to the tax regulations, the business environment is becoming more challenging, and companies must adopt an appropriate structure to comply with the requirements concerning tax residency. As a consequence, adequate measures have to be taken in order to prove that the company is managed and controlled in Cyprus and that the substantive business operations are genuinely carried out in Cyprus. In order to support the tax residency position of the company, appropriate corporate governance procedures and indicators of substance should be in place.

Effective management and control mean that the:

· Registered office address is in Cyprus

· The majority of the Board of Directors are Cyprus residents

· Board Meetings are held in Cyprus

· Board Decisions are taken in Cyprus

Companies registered in Cyprus should also possess a real physical substance in the country in order to avoid further tax obligations in other jurisdictions. 

Physical substance in Cyprus means that the company has:

  • Its own physical office space 
  • Employment of staff to carry out the administrative management of the company
  • Business activities are mainly undertaken from Cyprus
  • Documentation of the decision-making process and administration of the company taking place in Cyprus

A trading company which implements all or some of the above will not only enhance its ‘substance’ but will also strengthen its Cyprus tax residency claim beyond any doubt.

Our law firm provides registered address services, Director’s and secretary’s services and serviced offices. 

Who needs substance and why?

A Cyprus company demanding Double Tax Treaty benefits and having access to EU Directives needs to have sufficient substance in order to be able to benefit from those.

The main aim of a tax treaty is the avoidance of double taxation on the earned income.

Apart from the tax advantages and risk mitigation benefits, investors can also benefit from the significant incentives the Cypriot government has implemented in recent years for the attraction of foreign investors, such as the acquisition of citizenship on a fast track basis and the enactment of the non-domicile regime where individuals can obtain income from dividends, rent and interest completely tac free. Therefore, in order to minimize the risk of denial of Double tax treaty benefits, it is essential to create a sufficient substance in Cyprus. 

The global trend in relation to commercial companies, involving the establishment of an entirely operational commercial set-up with offices, employees and qualified managers doing real work clearly seems to be gaining ground in Cyprus too.

How can we help?

As the information is general, and the legislation is subject to change we strongly encourage you to contact our office to obtain detailed and updated advice specific to your own circumstances. 

Our law firm can assist you from A to Z to establish your presence in Cyprus.

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Why Cyprus? A general overview for international investorshttps://www.argyrides-law.com/why-cyprus-a-general-overview-for-international-investors/?utm_source=rss&utm_medium=rss&utm_campaign=why-cyprus-a-general-overview-for-international-investors Thu, 22 Aug 2019 12:09:44 +0000https://www.argyrides-law.com/?p=7161817Why Cyprus? The answer is a very simple one: from spectacular mountain peaks and beautiful beaches to an advanced economy, Cyprus has it all. Cyprus is a beautiful sunny island in the Mediterranean, where individuals can enjoy a high quality of life, a safe environment to raise a family and a modern lifestyle. Nevertheless, Cyprus...

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Why Cyprus? The answer is a very simple one: from spectacular mountain peaks and beautiful beaches to an advanced economy, Cyprus has it all.

Cyprus is a beautiful sunny island in the Mediterranean, where individuals can enjoy a high quality of life, a safe environment to raise a family and a modern lifestyle.

Nevertheless, Cyprus also offers various investment opportunities and excellent conditions for establishing a business.

Location and Population

Since 1974, following the Turkish invasion, Cyprus has been divided de facto into the Greek-Cypriot Government controlled two-thirds of the island and the remaining one-third of the island, which is administered by the Turkish Cypriots.

Cyprus is the third largest island in the Mediterranean, with an area of 9,251 km² and a population estimated 854,800 people in 2016. The strategic location of Cyprus, situated at the crossroads of the busy shipping and air routes of three continents – Europe, Asia and Africa, has indeed contributed significantly to its economic growth.

EU Membership and Currency

Cyprus has been a member state of the European Union since 2004 and a member of the Eurozone since 2008. Thus, its currency is the Euro since 1 January 2008.

Due to the country’s membership in the European Union since 2004 and the European Monetary Union since 2008, foreign investors received the opportunity to freely access the EU market, while they are also benefiting from lower costs and fewer risks across the eurozone.

Economy

Overcoming the challenges of recent years, Cyprus is now one of the fastest-growing Eurozone economies. The island offers capacity in both traditional and emerging economic growths sectors. On the one hand, the traditional sectors are those such as shipping, tourism, services, banking, which have been the main ones that advanced and developed the island’s economy for a very long period. On the other hand, there are the newly established sectors such as, energy, oil and gas, investment funds, research which respectively offer a more modern perspective promoting Cyprus’s growth. The small EU country has indeed exceeded international expectations and maintained a balanced pace in improving efficiency, implementing reforms and boosting investor confidence.

Business Perspective

Although small in size, Cyprus offers a variety of business opportunities to both foreigners and locals. Setting up a business in the Republic of Cyprus is beneficial as it has a modern, free-market, service-based economy giving both international investors and domestic businesses the confidence to invest, grow and prosper.

EU and Non-EU citizens opportunities

Cyprus is an ideal investment gateway to the European Union, as well as a portal for investment outside of the EU, particularly into the Middle East, India and China. As a member of the EU and the Eurozone, Cyprus ensures safety and stability for its foreign investors. On the one hand, EU citizens are now able to start a business without needing a local Cypriot partner and there is no minimum capital required.

On the other hand, the “Cyprus Startup Visa” scheme allows entrepreneurs from third countries, individuals or in a team, to enter, reside and work in Cyprus in order to establish/operate/develop a startup with high growth potential. The scheme’s goal is the creation of new jobs, the promotion of innovation and research, the development of the business ecosystem and consequently the economic development of Cyprus.

Cyprus: Key Highlights

  • The strategic location of Cyprus, situated at the crossroads of the busy shipping and air routes of three continents – Europe, Asia and Africa.
  • Due to the country’s membership in the European Union since 2004 and the European Monetary Union since 2008, foreign investors received the opportunity to freely access the EU market, while they are also benefiting from lower costs and fewer risks across the eurozone.
  • The process of establishing a company in Cyprus is a simple one, as the Government of the Republic of Cyprus assists foreign investors, both EU and Non-EU citizens, in its attempt to attract even more foreign capital mainly by using a beneficial tax system and low red tape. For instance, a company could be registered for no longer than 10 days and at the same time, a bank account could be opened within a period of 2 weeks.
  • The island offers one of the most attractive tax regimes in Europe, as it has one of the lowest EU corporate tax rates at 12.5%. Additionally, with a few exceptions, holding companies do not have to pay withholding taxes on dividends. Cyprus has a modern, transparent and efficient tax system that is fully aligned with EU and international regulations, encouraging more and more entrepreneurs to set up their companies in Cyprus.
  • Transparency in business practices is additionally ensured by Cyprus’ prosperous legislative and regulatory framework, which is based on English Common Law principles. Thus, the effective, reliable and business-friendly legal system of Cyprus is also entirely compliant with the EU, Regulations, EU AML Directives and the Financial Action Task Force on Money Laundering (FATF). Not only that, but Cyprus actively participates in a plethora of EU programmes, encouraging Foreign Direct Investment (FDI) opportunities and focusing on its economic, innovation and entrepreneurship growth.
  • Tax losses incurred in any one year and which cannot be set off against other profits of the same year can be carried forward and set off against future profits of the next five years.
  • There is absolute freedom of movement of foreign currency which allows the maintenance of a bank account in foreign currency anywhere in the world.
  • Non-domiciled individuals are not taxed on their income from dividends and interest. Basically, dividends paid to either non-Cyprus tax resident or non-Cyprus domiciled shareholders are exempt from withholding tax in Cyprus.
  • The dividends of the Shareholders are excluded from the Tax Authorities as long as they are not tax residents of the Republic of Cyprus.
  • Foreign investors in Cyprus are given a unique opportunity to obtain a Permanent Residence Permit or EU/Cyprus citizenship

Tax Treaties

Although the Cypriot tax system is very advantageous for companies, Cyprus has established Tax Treaties with other countries. Cyprus has double tax treaties with more than 50 countries and is presently negotiating with other countries in order to extend its double taxation network. The main purpose of Double Taxation Avoidance Agreements – also called Tax Treaties – is the avoidance of double taxation of income earned in any of these jurisdictions.

The Republic of Cyprus has agreements that promote and protect investments with more than 20 countries, as well. These agreements are meant to protect companies against discrimination, to protect the capital and profits that need to be sent back to the country in cases of expropriation or any negative outcome from doing business in Cyprus.

Non-domiciled tax residents do not pay tax on dividends, interest or rental income earned abroad.

Finally, it is important to be mentioned that Technology companies producing Intellectual Property can apply for an 80% tax exemption, reducing the corporate tax rate to an effective 2.5%.

Cyprus, indeed, has all the right ingredients to maintain a strong and resilient economy, due to its small size, productive labour force, business-friendly and flexible government.

How can we help?

As the information contained is generic, we encourage you to contact our office to obtain detailed and up-to-date advice specific to your own circumstances.

Our law firm can assist you from A to Z to establish your presence in Cyprus.

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British Citizen Living in Cyprus? Get Ready for Brexit.https://www.argyrides-law.com/british-citizen-living-in-cyprus-get-ready-for-brexit/?utm_source=rss&utm_medium=rss&utm_campaign=british-citizen-living-in-cyprus-get-ready-for-brexit https://www.argyrides-law.com/british-citizen-living-in-cyprus-get-ready-for-brexit/#commentsWed, 17 Apr 2019 13:52:39 +0000https://www.argyrides-law.com/?p=7161794European Union leaders have granted the UK another extension to Brexit, setting the new deadline to 31 October 2019. Although, UK can leave earlier if the UK’s Prime Minister and the Parliament manage to find an agreement. As we have been receiving several inquiries from UK citizens residing in Cyprus about what they can do...

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European Union leaders have granted the UK another extension to Brexit, setting the new deadline to 31 October 2019. Although, UK can leave earlier if the UK’s Prime Minister and the Parliament manage to find an agreement.

As we have been receiving several inquiries from UK citizens residing in Cyprus about what they can do to be prepared for Brexit, we’re outlining the procedures to be followed under each possible scenario – i.e. the scenario in which UK approves the Agreement (Deal Scenario) and the situation in which the UK does not endorse the Agreement (No-Deal Scenario).

In either case, The British High Commission in Nicosia underlines the importance for UK Nationals and their family members who live in Cyprus, to be registered with the Civil Registry & Migration Department with either a MEU1 (Registration Certificate) or MEU3 (Certificate of Permanent Residency).

DEAL SCENARIO

SECURING YOUR RESIDENCY BEFORE DECEMBER 31, 2020

Under the Agreement, the UK nationals who are currently eligible for residence rights along with their family members will be able to stay and continue their lives in Cyprus.

To be legally covered, you should register with either one of the two –

  1. MEU1 – Registration Certificate
  2. MEU3 – Permanent Residence Certificate

All UK nationals should secure their residency before December 31, 2020.

If you have any other form of residency (including an old stamp in your passport), this should be changed to either one of the above, by the end of the implementation period, end of December 2020.

MEU1 – Registration Certificate for UE Citizens (Yellow Slip)

Within four months from the entry in Cyprus, a Union citizen and their family members should submit the application for the Residence Certificate (commonly referred to as the Yellow Slip).
Depending on the purpose of residing in Cyprus, different documentation will be requested –

If you are Working

(a) Valid Passport or Identity card and their copies
(b)

  • In case you are Employed – Confirmation of Engagement by the employer or a Certificate of Employment.
  • If you are Self-employed – Certificate of Registration to the Social Security Services as self-employed
    (c) Two Passport-sized photographs

If you are Studying

a) Valid Passport or Identity Card and their copies
(b) Proof of enrolment to study at a private or public educational institution accredited or financed by Cyprus, including vocational training courses.
(c) Proof of comprehensive health insurance covering health services in the Republic of Cyprus
(d) A declaration which states that you have sufficient resources for yourself and your family in order not to become a burden on the social services system of Cyprus
(e) Two Passport-sized photographs

For other activities, you should provide proof of adequate income from employment (or another legal source) outside of Cyprus or sufficient deposits in financial institutions local or abroad. In all cases, proof of comprehensive health insurance in Cyprus is required.

For the registration of the family members of the Union Citizen who are also citizens of the UE, the applicants must submit a document attesting to the existence of a family relationship, applicable to the spouse and to all direct dependents under 21.

All documents issued aboard must be translated officially by the Press and Information Office, in case they are not in Greek or English.
An apostille is necessary for documents coming from the countries signatory of the Hague convention of 1961.
Otherwise, other procedures need to be followed, which are outlined on the Civil Registry and Migration department here (Link)

According to the Civil Registry and Migration Department, failure to register will result in a financial penalty of up to Euro 2.562,90. In the context of Brexit, it is still unknown if there could be other consequences on top of the monetary penalty, so we suggest you register within the timeline outlined by the regulator.

MEU3 – Permanent Residence of UE Citizens and Their Family Members

UE nationals who have been living in Cyprus for a continuous period of 5 years are eligible to apply for a permanent residence certificate, which will confirm their right to live in the country permanently.

The UE Citizen family members who are not citizens of a Member state will need to apply within one month after the expiration of the validity of the Residence Card, to obtain a Permanent Residence Card.

The validity of the residence card can be affected by absences longer than six months in a year. However, military services, maximum 12 consecutive months of absence for important reasons such as pregnancy, childbirth, serious illness, study or vocational training will not affect the validity of the residence card.

In case of absence of more than two consecutive years, the right of permanent residence will be lost.

You can still enjoy the right of permanent residence even before the completion of the continuous residence for five years if, after three years of continuous employment and residence in Cyprus, you move with your work in another Member State while retaining the place of residence in Cyprus to which you return once a week. This is applicable only to employees or self-employed individuals.

The Civil Registry and Migration Department outlines the entire procedure for acquiring MEU3 on their website here.

New Residency Certificate from January 1, 2021

Cyrus authorities will issue a new type of residence certificate which will be in line with the Withdrawal Agreement and will protect the UK nationals’ rights as citizens, even after Brexit.
As of January 1, 2021, at the end of the Transition Period, the holders of MEU1 or MEU3 will be entitled to request this new residence certificate.

NO DEAL SCENARIO

However, there is a possibility that the Agreement will not be ratified by the UK and then the UK will leave the EU on 31 October 2019 without an Agreement (the No Deal-Scenario). In this scenario, the UK citizens will be treated as third-country nationals, both de facto and de jure.

Cyprus Government has expressed its intention to protect the residence rights of UK nationals and their family members, including family members who are third-country nationals and aims to implement the majority of the provisions of the Agreement.

The residence documents under the directive 2004/38/EC (MEU1, MEU3) will continue to be valid until the end of 2020, however, starting 2021, new applications will be required for people covered by the new legislation.

The Cyprus Government intends to put forward a legislative proposal to protect, even in a case of a No Deal Scenario, the residence rights of United Kingdom nationals and their family members, including family members who are third-country nationals, by unilaterally implementing, as far as possible, the provisions of this Agreement. The new law is intended to apply to UK nationals and their family members in accordance with EU rules on free movement.

Are you still concerned about Brexit?

We can help with your residency registration, and not only. Contact our firm for a personalized consultation.

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