Cyprus is an EU member state which is increasingly becoming a jurisdiction of choice for the structuring of corporate finance and acquisitions.
This is the case for a number of reasons:
- it features one of the most attractive transactional tax regimes in the EU
- there is no taxation on the acquisition or disposal of shares and no withholding tax on dividends
- its common law system affords certainty and clarity in acquisitions and corporate finance
- the Cypriot corporate law framework is modelled after English company law
- Cyprus features versatile financing legal tools, such as redeemable preference shares
- investors can benefit from tailored rights through classes of shares as well as private shareholders agreements to regulate their affairs
- it affords an intragroup financing framework which is fully aligned with the OECD's BEPS
- it is a member of the Eurozone and has the euro as its currency
- it adheres to the highest anti-money laundering standards and features on the white list of the OECD
- it features one of the largest networks of double tax treaties, including the UK, the US, the UAE, India and China
- its tax system is fully aligned with EU State aid rules and no tax rulings have been challenged by the European Commission
- reorganisations, such as mergers, demergers, exchanges of shares and transfers of assets can be effected in a tax-neutral manner.
Download our AMC Insight titled 'Cross-border acquisitions and corporate financing through Cyprus'
Originally published October 18, 2018
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.