The British voters on 23rd June 2016 passed a historical decision to exit the European Union, changing the landscape and making the ''BREXIT'' a forthcoming reality. Inevitably, this decision will also affect the entire financial sector, including both local and international companies which are currently based in the UK.
Cyprus, being a full member state of the EU since 2004, has a well-established business, legal and tax infrastructure to fully facilitate, assist and support UK companies which may decide to explore and expand their business by establishing a parallel legal presence in an alternative EU jurisdiction such as Cyprus. By doing so, they will be able to continue and enjoy all the advantages the EU has to offer. Companies may need to consider taking strategic decisions and actions, which may include restructuring of their businesses so as to be least affected.
A VAT registration in the EU may prove a necessity to continue their operation in the common market. One significant advantage of operating a Cyprus company is retaining the application of the EU VAT regime. For example, you will be able to continue and take advantage of intra-community trading within the EU by applying the reverse charge mechanism and effectively offer your products and services to your clients with zero VAT.
This would be a start contrast to trading goods and offering services which will possibly be treated as imports and exports subject to VAT in the UK post BREXIT.
Furthermore, Cyprus applies the same reporting and assurance standards as the UK. These are the International Financial Reporting Standards (IFRS) and the International Standards of Auditing (ISA) which are the recognized generally accepted accounting practices within the global business community.
In addition to the common financial reporting frameworks, the legal systems of both countries are based on common law and as such, Company Law between them is approximately 90% identical and as a result minimizes the time required for familiarization with a new legislation.
Finally, Cyprus has one of the lowest corporation tax rates in Europe standing at 12.5%, compared to the UK corporation tax rate which currently is 20% and can achieve an overall lower effective tax burden.
How can Eurofast assist you?
- We will assist and guide you in the process of establishing your business in Cyprus and ensure that all applicable steps and actions have been duly undertaken
- We will assist you in the preparation, review and submission of all required documentation to the relevant local authorities and administrations
- We will provide you with customised business advisory and guidance you may need to meet your requirements
- We can incorporate a new company or branch for you
- We can provide you with a full range of supporting services including, but not limited to, bookkeeping and reporting, legal and audit among others
With more than 35 years of experience, our highly skilled professionals have in-depth knowledge of all the areas in which a company is affected and will continuously advise you and provide necessary guidance to allow you to manage your business effectively and simultaneously and to ensure full compliance with the all Cypriot laws, rules and regulations.
Companies currently based in UK may need to evaluate to which extent their business will be affected by the BREXIT. By taking into consideration the above mentioned, companies may need to consider taking strategic decisions and actions, which may include restructuring of their businesses so as to be least affected. A VAT registration in the EU may prove a necessity to continue their operation in the common market. Therefore, a parallel registration in an EU country, like Cyprus, needs to be carefully considered.
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.