Apart from international banking units, international captive insurance companies, shipping companies etc, which are discussed below, other types of international companies that can be registered in Cyprus are the following, although the list is not exhaustive:
6.1 Construction and Engineering Companies
These are used extensively for construction operations in the Middle Eastern and CIS countries, and are particularly popular with Dutch, British, American, Greek and Yugoslavian interests. Cyprus not only affords a greater degree of stability than most other Middle Eastern states, but by sensible use of the double taxation treaties, maximum profit potential is ensured.
6.2 Employment Companies
These companies can be established with their main object being the provision or recruitment of labour for contract or other work carried on outside Cyprus. This can be particularly advantageous to nationals of countries whose own tax laws provide that, wherever tax is paid in another country, their salaries can be remitted to their home countries without payment of any further local income tax. Belgian, Australian, Austrian and French residents all fall within this category.
6.3 Headquarter Companies
These companies are often used by multinational companies wishing to have centralised regional management control. Cyprus has become a popular base for centralising the activities of American, European and Far Eastern multinational entities, and is also attractive to companies incorporated in distant tax haven states but having interests in the Gulf, Middle Eastern and Central and East European regions.
6.4 Invoicing Companies
Such companies may be used for the re-invoicing of materials, goods and services from any country and to any destination. Administration is relatively easy as all that is required is an office base with a competent manager to arrange transactions. Trade and transit depot activities may be facilitated by use of a bonded warehouse and the Cyprus Chamber of Commerce is always available to assist with the issue of the necessary certificates.
6.5 General Trading Companies
These companies represent the majority of all international business entities incorporated in Cyprus. Such companies may be used for transit trade activities. Again the Cyprus Chamber of Commerce will help with the issue or legalisation of any required certificates of origin.
6.6 Trust Companies
These companies may be used for managing trust funds held outside Cyprus or for the administration of pension funds. There is no fixed minimum capital requirement. Please see section 15.
6.7 Holding and Investment Companies
These companies, which are usually the parent companies of a number of international business entities, are often incorporated for beneficial tax reasons. With effective tax planning they may be beneficially used in other countries with which Cyprus has concluded double taxation treaties. Such companies are mostly used to hold participations in joint ventures particularly in Central, Eastern European and Middle Eastern countries, N. Africa, China and India in order to avoid or reduce withholding taxes.
6.8 Shipping and Ship Management Companies
The shipping industry on the island is growing steadily and this kind of company is therefore becoming popular along with crew management companies. German, Dutch, Greek, Scandinavian, British, Japanese and Russian companies are particularly prominent in this field. Please see section 19.
6.9 Finance Companies
These companies are particularly active in financing joint ventures or other acquisitions in countries with which Cyprus either has a double taxation treaty or where either no, or very low, withholding tax is levied. Entities from Denmark, Ireland, Germany, Greece, Britain, the Netherlands, the United States and Australia are particularly active in this field.
6.10 Printing and Publishing Companies
The low cost of local printing and an extensive telecommunications system are just two of the factors which make Cyprus an ideal location for this type of company. Printing and type-setting of publications and books locally is permitted provided that they are distributed abroad. This type of entity is being increasingly used by American and Middle Eastern interests.
6.11 Royalty Companies
Cyprus' domestic tax system and laws coupled with the network of double taxation treaties, provide opportunities for effective tax planning involving the crossborder routing of royalties, which is the usual income derived from the transfer or exploitation of intellectual and industrial property rights. A Cyprus intermediary royalty or licensing company can centralise a group's control over the intellectual property rights of its member companies and can cause the reduction or avoidance of foreign taxation on royalty income by receiving tax deductible royalty payments from high tax countries subject to nil or reduced royalty withholding tax rates through applicable double taxation treaties. There is no Cypriot withholding tax on the payment of royalties by international companies to any non-resident and according to Cyprus Revenue practice, only a 10% spread of the total royalties receivable will be taxable at the 4.25% rate applicable to Cyprus international companies.
6.12 Real Estate Companies
These companies are used both for dealing in property and for investment purposes and they can benefit greatly from the effective application of the relevant double taxation treaty. Middle Eastern, Danish, Swedish, French and British interests are particularly active in this sphere.
The purpose of this publication is to assist clients and associates in clarifying and appreciating the range of opportunities which are available in or through Cyprus. Although every effort has been made to provide the reader with a clear and comprehensive picture of the island's beneficial regime, it should be appreciated that is not possible to cover all aspects comprehensively in a publication of this size.
Individuals or companies who are seriously considering using Cyprus for any of their international business activities are advised to obtain expert professional advice before taking positive action.
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