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Cyprus IBC Company Information

The term International Business Company (or offshore company) refers to any legal entity whose beneficial ownership and business activities lie outside Cyprus.

An IBC can either be resident in Cyprus (provided its management and control is in Cyprus) or it can be non-resident (if its management and control is outside Cyprus). Further an IBC can either operate from the office with permission to employ expatriate staff or it can have its registered office at the office of a local accountant or lawyer.

Restrictions on Trading

Company cannot undertake the business of banking, insurance or rendering of financial services to the public unless special permission is granted. Companies cannot trade with resident individuals or companies situated in Cyprus other than in relation to the maintenance of premises, banking and professional services, unless they have special permission from the Central Bank of Cyprus.

Language and Legislation of Corporate Documents

English and Greek.

Registered Office Required

All Cypriot companies are required to have a registered office and address in Cyprus which should be notified at the Registrar's Office.

Incorporation Time

7 - 10 working days, subject to name approval.

Name Restrictions

A company name must be chosen and approved by the Registrar of Companies. This procedure usually takes 2-4 working days. Taxways Limited has a “shelf list” with approved names to choose from, to speed up the registration of the company. Any name that is identical or similar to an existing company or sounds similar, any name that implies illegal activity or implies royal or government patronage is prohibited. Also the following words or their derivatives are forbidden: asset management, asset manager, assurance, bank, banking, broker, brokerage, capital, credit, currency, custodian, custody, dealer, dealing, deposit, derivative, exchange, fiduciary, finance, financial, fund, future, insurance, lending, loan, lender, option, pension, portfolio, reserves, savings, security, stock, trust or trustees. If the word “Group” is to be used in the company name the minimum number of corporate shareholders are two. All company names must end in the words: Limited or Ltd.

Language of Name

Names may be expressed in Greek or any language using the Latin alphabet if the Registrar is in receipt of a Greek or English translation and the name is not considered undesirable.

Names Requiring Consent or Licence

The following names or their derivatives require consent or a licence:

“Asset Management” “Asset Manager”, Assurance”, “Bank”, “Banking”, “Broker (s) / Brokerage”, “Capital”, “Credit”, “Currency (ies)”, “Custodian(s)”, “Custody”, “Dealer(s)” “Dealing”, “Deposit(s)”, “Derivative (s)”, “Exchange”, “Fiduciary (ies)”, “Finance”, “Financial”, “Fund (s)”, “Future (s)”, “Insurance”, “Lending”, “Loan(s)”, “Lender(s)”, “Option(s)”, “Pension(s)”, “Portfolio”, “Reserves”, ‘Savings”, “Security(ies)”, “Stock”, “Trust”, Trustees” their foreign language equivalents or any name that the Registrar considers may have a connection with the aforementioned.

Disclosure of Beneficial Ownership to Government Authorities

The identity of the beneficial owners of a Cyprus Company may remain confidential if corporate shareholders are engaged to act as the shareholder on behalf of the beneficial owners. This confidentiality is maintained as long as the company and its ultimate beneficial owners are not involved in any criminal activity.

Authorised and Issued Share Capital

The share capital must be expressed in Euros. The usual authorised share capital of a Cyprus IBC company is € 8,543 and the minimum issued and paid up capital is € 1,708 .

Classes of Shares Permitted

Registered shares of par value, preference shares, redeemable preference shares and shares with no voting rights.

Directors

The minimum number of directors is one (natural or corporate) but in such case he cannot also be the secretary of the company. He can be of any nationality and need not be resident in Cyprus. It is not necessary for directors to hold qualification shares. Alternate directors may be appointed. The Cypriot incorporation documents carry the names and identity of the shareholders, directors and secretary. As such the names appear on the public record. To secure the anonymity of director and shareholder, the nominee services are available.

Company Secretary

All Cypriot companies must appoint a company secretary, who may be a natural person or body corporate. It is advisable to appoint a resident company secretary.

Shareholders

The minimum number of Shareholder is one. Corporations are permitted. Shareholders and directors may be the same. The Cypriot incorporation documents carry the names and identity of the shareholders, directors and secretary. As such the names appear on the public record. To secure the anonymity of director and shareholder, the nominee services are available.

Taxation

Under the current legislation, Cyprus has the lowest tax regime in the European Union and its role as an international financial centre is greatly enhanced. On 1 st January 2003 the favourable tax regime previously available to IBC’s was abolished and all companies are now taxed on the same basis. Following the changes a uniform 10% corporate tax rate, applicable to the worldwide income, is now levied on all resident companies that has management and control in Cyprus. Management and control is considered to be exercised in Cyprus if the important decisions about the company are made in Cyprus and the majority of the members of the board of directors are residents of Cyprus for tax purposes (i.e. they live in Cyprus for more than 183 days a year). The Holding International Business Companies operating from Cyprus are now in a much more beneficial position because they can enjoy the benefits deriving from the tax exemptions as well as the corporate tax benefits by virtue of the new tax legislation.

Tax Exemptions

In view of the new tax legislation 50% of interest received by a corporation is tax exempt, excluding interest received from the recipient's ordinary course of business or closely connected with the recipient's ordinary business.

Dividends received