Fiscal Advantages of Establishing an Offshore Company in Cyprus

by Shaiya Ong on September 26, 2012

  • SumoMe

Establishment of offshore companies is a manner less explored by some business enthusiasts. At times entering into one is even feared by some because they are not aware of the numerous advantages it will bring to their business. Little do they know that registering an offshore company is a way of providing financial stability, privacy, and confidentiality to your business.

Cyprus as Haven of Offshore Companies

Cyprus is a country in the Mediterranean that has attracted several business persons because of its low tax regime and dozens of Double Tax Treaties negotiated and closed with other countries. It is one of the most trusted countries in the international community related to corporation tax management and it has become one of the main financial attractions of the region.

Top Ten Fiscal Incentives Offered by the Cyprus Government to Established Offshore Companies in the Region

Below is a list of the several fiscal incentives it offers, as proof of the country’s support of establishing offshore companies in their territory.

  1. International Business Companies (IBC), which includes Offshore Companies, is considered residents Cyprus are granted ten percent (10%) tax on its net profits.
  2. Resident IBC are granted full advantage of the benefits provided in Cyprus double tax treaty networks, which includes Austria, Lebanon, Malta, Belarus, Belgium, Poland, Canada, Croatia, Denmark, Egypt, The Peoples Republic of China, UK, Ukraine, Italy, Ireland, India, Thailand, USA, Greece and many more.
  3. Withholding tax on dividends, royalties, and interests paid by IBC to its non-resident companies or individuals is not applied in the region.
  4. Profits gained from permanent establishment of the IBC abroad are non-taxable.
  5. The disposal or selling of shares resulting to profit made Cyprus tax residents are also non-taxable.
  6. Carry forward tax losses experienced by the company can be done indefinitely and can even be set-off against its future profits without restrictions.
  7. Events like mergers, amalgamations, re-organizations, and acquisitions of companies can be fulfilled without any tax implications.
  8. IBC Companies are given opportunity to open a bank account in the country without the hassles of exchange control restrictions.
  9. Capital gains tax is exempted, except when sales of immovable properties of the company are located in Cyprus.
  10. Ultimately, anonymity and confidentiality of beneficial owners are strictly implemented by the Cypriot Government. It is only to be disclosed to your chosen bank and cannot be disclosed to any other party unless criminal investigation requires so, if and only if it is backed-upon by a court order requiring banks to reveal bank information in a limited scope.

Aside from these fiscal advantages, companies that picked the region enjoy reduced operating costs because of the opportunity to establish a virtual office through certain legal and financial institutions. The low crime rate of the region also makes it an ideal residence for those who wish to have a closer look at the daily operations of the company. Moreover, those in-lines with the shipping industry will find more incentives from the country because of the additional benefits provided to it.

At present, numerous companies in line with the following services and industries are enjoying the above-mentioned benefits in Cyprus,

  • Commission agents
  • E-business
  • Royalty companies
  • Real estate companies
  • International trading companies
  • International construction and engineering companies
  • International distribution and transport companies
  • International service companies
  • Shipping and Management Companies

It isn’t too hard to decide if it is good choice to start gathering the requirements for you to establish an Offshore Company in Cyprus. The simple incorporation and filing requirements designed by the government and a list of professional advisers in the legal and financial industry makes it more convenient to quickly establish an Offshore Company in the region. Begin your selection of reliable and credible legal affiliates in the country for speedy processing of your registration.


About the Author:

PM Corporate Law is a Business Law Firm providing assistance both in the national and international market, primarily catering to Offshore Company in Cyprus. It is founded on the precepts of integrity, transparency, and efficiency to guarantee excellent service to all of its clients.



Shaiya Ong

Shaiya Ong

Shaiya Ong

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