offshore advantages

Advantages of a Cyprus IBC


	Anonymity / Confidentiality
	Major fiscal incentives
	VAT and duty free privileges

Anonymity / Confidentiality

The names of company shareholders, directors and secretary may easily be obtained by anyone from the public records of the Cyprus Registrar of Companies. Therefore, in order to achieve absolute anonymity, the company shares may be registered in the names of local trustees who hold the shares on behalf of the actual beneficial owners (trust deeds, blank instruments of shares transfer and other safeguards are usually given to the beneficial owners). Details of the beneficial shareholders are only disclosed to the Central Bank of Cyprus where this information is protected by rules of absolute secrecy and is not available for inspection by any third party.

The beneficial owners of a company may who do not wish to appear as directors may appoint local directors in order to ensure anonymity and to show that the company is being managed and controlled from Cyprus. Such local directors sometimes referred to as "nominee directors" may sign contracts and perform various activities in strict conformity with instructions given by the beneficial shareholders. Furthermore, the nominee directors may upon the instructions of the beneficial shareholders grant a Power of Attorney to third persons enabling them to perform the business of the Company. There is a very wide use of nominee directors by offshore companies.

Major fiscal incentives

International business companies as well as international branches managed and controlled from Cyprus are taxed at only 4.25% of their profits
International business branches which are managed and controlled from abroad and international business partnerships are totally exempt from corporation or income tax. The beneficial owners of international business companies, branches and partnerships are not liable to additional tax on dividends or profits over and above the amount paid or payable by the respective legal entities
Expatriate employees of international business companies living and working in Cyprus are taxed at one half the rates applicable to locals i.e. from 0 to 20 percent
Expatriate employees of international business companies living and working outside the island are exempt from income tax if they get paid through any bank in Cyprus or are taxed at one tenth of the rates applicable to locals if they get paid directly abroad
No capital gains tax is payable on the sale or transfer of shares in an international business company
No estate duty is payable on the inheritance of shares in an international business company
Cyprus has concluded an impressive number of treaties for the avoidance of double taxation. There are currently 27 in force. The existence of these treaties, combined with the low tax paid by international business companies, offer significant possibilities for international tax planning through the island.

VAT and duty free privileges

International business companies and their expatriate employees may acquire duty free:

Office equipment such as computers, fax machines, photocopiers, etc.
Household equipment such as television sets, video recorders, washing machines, etc.
Motor cars, including saloon and sports cars, station wagons, etc.

Those eligible for relief from duty are:

International business companies operating continuously from their fully fledged and fully staffed offices which are open during normal working hours and separate from private residences
Full-time expatriate employees of the above enterprises who live and work in Cyprus during most of the year and whose remuneration exceeds CYP12.000 (USD 24.000 approx.) per annum.

An eligible expatriate may acquire a second duty-free car for the use of his family if his salary, as declared to the Department of Inland Revenue, is more than CYP20.000 per annum.

Transactions effected by international business companies are outside the scope of value added tax. As a result, offshore enterprises do not need to register for VAT purposes. All duty free importations by offshore enterprises are exempt from VAT.

Telecommunications services offered to offshore enterprises which have fully fledged and fully staffed offices in Cyprus may be exempted from VAT with the approval of the Central Bank.