The post Cyprus Investment Program | Highlights appeared first on Y. Argyrides & Associates Law Firm.
]]>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.
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.
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.
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.
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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]]>The post Cyprus Company Formation: All you need to know about setting up a company in Cyprus appeared first on Y. Argyrides & Associates Law Firm.
]]>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 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.
– Cyprus Company
– Branch of a Foreign Company
– Partnership
– Sole Proprietor
– Cyprus International Trust
– Cooperatives
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.
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.
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.
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.
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.
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.
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.
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:
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.
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.
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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]]>The post Why Cyprus? A general overview for international investors appeared first on Y. Argyrides & Associates Law Firm.
]]>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.
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.
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.
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.
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.
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.
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.
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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]]>The post British Citizen Living in Cyprus? Get Ready for Brexit. appeared first on Y. Argyrides & Associates Law Firm.
]]>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).
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 –
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.
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)
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.
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.
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.
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.
We can help with your residency registration, and not only. Contact our firm for a personalized consultation.
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