In this issue, we put the spotlight on Cyprus and discuss the advantages the jurisdiction can offer to EU businesses, we present the process of redomiciliation of a foreign company to Cyprus and compare the fast track and non-fast track routes to Cyprus Permanent Residency. We also answer some of the most Frequently Asked Questions (FAQs) in terms of Cyprus Company Formation and our Banking Services.
We highlight UAE Free Zone companies as a means to fulfill increasing economic substance requirements, and in industry news, we take a look at the most recent tax treaty updates.
We hope you enjoy reading our newsletter and are happy to hear your comments and feedback.
Internet Incorporate
FOCUS ON CYPRUS
Cyprus: an EU Hub for UK businesses: Given today’s financial and political uncertainties, heavy taxation and the structural problems facing the EU, Cyprus can be utilized as an EU hub for companies and individuals who wish to base their activities in a tax efficient and cost competitive environment, whilst maintaining or establishing an EU presence. Moreover, Cyprus is a viable alternative solution for online businesses acting, either as a collecting agent or as a holding company within an online business EU structure. Read more.
Redomiciliation of a company to Cyprus: Companies redomicile for a variety of reasons, such as to benefit from a favourable tax environment, take advantage of less stringent regulations, align their place of registration with their shareholder base and realize cost savings. Foreign companies that choose to transfer their domicile to Cyprus are able to do so while preserve their existing legal status, goodwill and operational history. They are also able to benefit from Cyprus’ favourable tax regime, less regulatory scrutiny and lower operational costs. To find out the requirements and procedure click here or contact us to arrange a consultation (info@internetincorporate.com).
Cyprus Permanent Residency: A non-EU national may obtain a permanent residency status through a secure real estate investment. Permanent Residency status means that applicants and their families have the right to live freely in Cyprus, or continue to live in their home countries and use the permit whenever needed. There are currently two routes for an applicant to obtain permanent residency in Cyprus, the regular and the fast track procedure:
A. Fast track procedure (Regulation, (2)) within 2 months. Requirements:
1) Purchase a property in Cyprus, a house, apartment or other building; of a minimum market value of €300.000 (V.A.T. is not included). The property must be new. 2) Prove annual income of €30.000 (applicant together with his spouse/husband), from sources other than employment in Cyprus (derived from salaries of employment abroad and not in Cyprus, pensions, stock shares, rents, etc., and is increased by €5.000 for each dependent person). 3) Deposit a minimum capital of €30.000 in a bank account in Cyprus, which will be pledged at least for a three-year period.
B. Category F (Regulation 5(f)) within 6-8 months. Requirements: 1) Purchase of a property in Cyprus, a house, apartment, building, or even land of an approximate market value of €150.000 (V.A.T. is not included) 2) Prove annual income of approximately €20.000 – €30.000 (applicant together with his spouse/husband), from sources other than employment in Cyprus. (derived from salaries of employment abroad and not in Cyprus, pensions, stock shares, rents, etc., and is increased by €5.000 for each dependent person). 3) Deposit an approximate capital of €30.000 in a bank account in Cyprus, which will not be pledged.
What is the minimum number of directors and shareholders, and who can be one? Under Cyprus Law, every company limited by shared must have a minimum of one director, one secretary and one shareholder. From a tax-planning point of view, it is often required that the company is shown to be managed and controlled in Cyprus and, accordingly, it is recommended that the majority of the directors appointed, are Cyprus residents.
What information is required for each shareholder and /or beneficial owner and director? For shareholders: full name, date and place of birth, nationality, residential address, utility bill as proof of the residential address or passport with registration stamp for CIS countries, occupation (CV is required), notarized copy of passport, number of shares to be held.
What are the share capital requirements? There is no legal requirement as to the minimum or maximum share capital of the company. The usual nominal share capital is €1.000, however, should s higher capital be required then the stamp duty of 0.6 percent on the increase on authorized capital needs to be paid to the Registrar of Companies. Read more.
What services do you offer in terms of banking? We can assist in all banking matters which entail the opening and operation of corporate accounts. Do I have to visit the bank in order to open the account? The majority of banks that we work with will allow for accounts to be opened remotely. There are some banks that have a requirement for a personal visitation.
Will I receive a refund for your fees if my application is rejected? Shall a bank reject your application we can either refund our fees or suggest the opening of the account in another bank, depending on your preference. Can you guarantee the account opening? Unfortunately, we cannot guarantee the account opening. This is simply because this decision depends solely on the banks discretion. Read more
HIGHLIGHT ON UAE
Fulfilling economic substance in UAE Free Zones: The days of “brass plate” registrations are coming to an end. An increasing number of double tax treaties incorporate anti avoidance provisions. Further, tax authorities are not looking only at the place where central management and control is exercised in order to determine where a company is taxable. In fact, they are also looking at the economic rationale behind a company in a particular country. More so, if it happens to be a low or no tax country.
The UAE is particularly well positioned to cope with the increasing requirements from tax authorities to provide real economic substance.
By making use of the UAE free zone (FZ) structures it is now possible to locate business functions, realize tax savings and satisfy the criteria of economic substance which is very significant these days. By making use of the UAE FZs, there are now opportunities for companies of any size to locate business functions in the country. It is hard to think of a place where it is so easy and quick to set up a business as it is in a UAE FZ. Read more.
UAE remains top investment destination for GCC citizens: The UAE has maintained its position as a top investment destination for citizens of the Gulf Cooperation Council (GCC), with 1.899 new licenses granted to GCC citizens to practise economic activities during 2015, and with a total of 19.803 license count by the end of 2015. Read more.
LATEST TAX TREATY NEWS
India - Mauritius: On August 10, 2016, India completed its domestic ratification procedures in respect of the DTA Protocol signed with Mauritius. Ireland - Ethiopia: The DTA between Ireland and Ethiopia entered into force on 12 August 2016. Hong Kong - Russia: The DTA between Hong Kong and Russia became effective on 29 July 2016. Ukraine - Malaysia: Ukraine and Malaysia signed a DTA on 4 August 2016. Guernsey - Chile: The TIEA between Guernsey and Chile entered into force on 2 August 2016.
