The establishment of a Cyprus International Business Partnership requires that a specific 2 stage procedure is followed for:
- Obtaining a Central Bank of Cyprus permission
- Registration with the Registrar of Companies
Central Bank of Cyprus permission
The requirements are the same those for the Central Bank of Cyprus permission for an IBC.
Registration with the Registrar of Companies
After obtaining permission from the Central Bank, the partnership must be registered with the Registrar of Companies under the Partnership Law.
The procedure for the formation and registration of an International Business Partnership in Cyprus is effected by the submission of a return to the Registrar of Companies containing:
- the name, object and duration of the partnership
- the names and addresses of the partners, and
- their authority to bind the partnership.
Where the non-resident partners intend to reside in Cyprus, work permits issued by the migration authorities are required to file with the Registrar before the partnership is registered.
Advantages of registering an International Business Partnership
An International Business Partnership registered in Cyprus can enjoy all the advantages extended to all the international business legal entities.
The profits of the partnership are not taxed. This exemption applies both at the partnership and the individual partners’ level.
Despite the tax advantage, however, partnerships are not used very often, mainly because of the disadvantage of at least one of the partners having unlimited liability.
Where investors wish to maintain the advantage of the nil tax position and at the same time enjoy limited liability, it is possible to set up a limited liability partnership. Under this set up, individual partners can be limited liability partners, while a Cyprus International Business Company can be the general partner with unlimited liability as far as the partnership is concerned.
The content of this article is intended only to provide general guidelines related to this particular matter. For your specific circumstances, full specialist advice is recommended.
To receive more information on offshore services or to discuss the particulars of your international tax planning needs please contact the authors.