CYPRUS COMPANIES ARE THE MOST EFFECTIVE VEHICLES FOR INTERNATIONAL INVESTMENTS AND TAX PLANNING
• CYPRUS IS NOT AN OFFSHORE JURISDICTION BUT A RESPECTABLE TAX REGIME ACCEPTABLE BY EU AND OECD
• WITH THE LOWEST TAX RATE IN EU @10% WITH LONG AND STABLE FISCAL HISTORY & STRONG ECONOMY THAT ENABLES IT TO MAINTAIN IT
• MEMBER OF EU CAN BENEFIT OF EU DIRECTIVES WITH AN EXTENSIVE DOUBLE TAX TREATY NETWORK WITH ALMOST 50 COUNTRIES OFFERING MANY OPPORTUNITIES FOR EFFECTIVE TAX PLANNING
• WITH THE BEST DOUBLE TAX TREATY EVER CONCLUDED WITH RUSSIA &UKRAINE &OTHER CIS COUNTRIES
• WITH VERY GOOD DOUBLE TAX TREATIES WITH OTHER EMERGING MARKETS WHICH ATTRACT THE INTEREST OF THE INTERNATIONAL INVESTOR LIKE CHINA AND INDIA
• WITH PARTICIPATION EXEMPTION ON DIVIDENDS –subject to minimal conditions & FULL PARTICIPATION EXEMPTION ON DISPOSAL OF SHARES without minimum holding period or shareholding unlike other international business companies like UK or Dutch
• UNILATERAL CREDIT RELIEF FOR FOREIGN TAXES, NO CFC LEGISLATION, NO THIN CAPITALISATION RULES OR TRANSFER PRICING RULES
• NO WHT ON DIVIDENDS PAID EVEN IF THEY ARE PAID TO OFFHSORE C OMPANIES
AS A TRADING COMPANY
EXPORT ISRAELI CO
CYPRUS TRADING COMPANY
IMPORT COMPANY
NET PROFIT IS TAXED IN CYPRUS AT 10%SUBSTANCE OF THE CYPRUS COMPANY IS IMPORTANTMANY IMPORTANT ISRAELI COS HAVE THEIR BASE IN CYPRUS DUE TO THE COST EFFICIENT AND DEVELOPED BUSINESS ENVIRONMENT CYPRUS CAN GIVE ACCESS TO NEW EXPORT MARKETS TO ISRAELI COs
AS INVESTOR IN ESTATE CO
HOLDING CYPRUS CO
ESTATE CO ABROAD
INVESTOR PROPERTY OWNED BY ESTATE CO ABROAD IS SOLD BY DISPOSING THE SHARES OF THE CYPRUS CO BEING THE SOLE SHAREHOLDER OF THE ESTATE CO 0% TAX ON PROFIT FROM DISPOSAL OF SHARES PROPERTY ABROADPROPERTY ABROAD
AS AN INVESTMENT COMPANY TRADING IN SECURITIES
SELL SECURITIESBUY SECURITIES
PROFIT IS TAX EXEMPT
USE OF DOUBLE TAX TREATIES
NO WITHHOLDING TAX ON DIVIDENDS OUT OF CYPRUS
CYPRUS CO TRADING IN SECURITIES
INVESTOR
AS A HOLDING COMPANY
TREATY SUBSIDIARY EU SUBSIDIARY
CYPRUS HOLDING CO
ULTIMATE HOLDING CO
NO WITHHOLDING TAX ON DIVIDEND PAID FROM EU SUBSIDIARIES
LOWERS WITHHOLDING TAX FROM TREATY SUBSIDIARY
0% TAX IN CYPRUS ON DIVIDEND ;DIVIDEND PARTICIPATION EXEMPTION
NO WITHHOLDING TAX ON DIVIDEND PAID TO NON RESIDENT BY CYPRUS CO
AS A FINANCE COMPANY
OPERATING CO
HEAVEN COMPANY
CYPRUS FINANCING CO
CYPRUS CO. IS USED TO FINANCE A TRADING CO. IN ANOTHER COUNTRY
SMALL MARGIN TAXABLE AT 10% IN CYPRUS
NO WITHHOLDING TAX
CYPRUS CO AS A ROYALTY COMPANYPLAN: PARENT Co. ESTABLISHES CYPRUS
ROYALTY Co. TO COLLECT ROYALTIES FROM Co. IN EU COUNTRY OR TREATY COUNTRY
BENEFITS: 10% TAX ON PROFIT IN CYPRUS ON
THE NET AMOUNT OF THE ROYALTY INCOME
ROYALTY IS DEDUCTED FROM TAXABLE PROFIT IN PAYING COMPANY
NO WHT ON ROYALTY FROM CYPRUS TO THE PARENT Co. OR ANOTHER FRANCHISOR
NO WHT IF ROYALTY IS PAID BY EU Co. OR LOWER OR EVEN ZERO IF PAID FROM TREATY COUNTRY DEPENDING ON THE DTT
CYPRUS ROYALTY Co.
PARENT Co. ORFRANCHISOR
EU/TREATYOPERATING Co.
0 WHT OR LOWER WHT FOR SOME
TREATY COUNTRIES
10%
0 WHT
CYPRUS HOLDING COMPANY FOR INVESTMENTS TO RUSSIA, UKRAINE &OTHER CIS COUNTRIES
– CYPRUS HAS THE BEST DTT WITH RUSSIA, UKRAINE &OTHER CIS COUNTRIES
– DIVIDEND WHT • UKRAINE 0%• RUSSIA 5% ( OR 10% FOR INVESTMENTS BELOW € 100.000)
– WHT ON INTEREST FOR BOTH COUNTRIES 0%
– WHT ON ROYALTIES FOR BOTH COUNTRIES 0%
CYPRUS HOLDING COMPANY FOR RUSSIA & UKRAINE
– TAX EFFICIENT HOLDING STRUCTURE DUE TO FAVOURABLE DOUBLE TAX TREATY
– PERMITS THE FLOW OF PROFITS (VIA DIVIDENDS) FROM RUSSIA/UKRAINE TO A FOREIGN PARENT CO WITH MINIMAL TAX BURDEN
– DIVIDEND WHT• RUSSIA 5%• UKRAINE 0%
– NO TAX IN CYPRUS ON DIVIDEND FLOWS
– NO WHT ON DIVIDEND FROM CY Co.
Dividend
Dividend 5% Russia0% Ukraine
0%
0%
PARENT
CYPRUS COMPANY
RUSSIAN Co. OR UKRAINE Co.
• CHINA IS THE FASTEST GROWING ECONOMY IN THE WORLD ATTRACTING HIGH INBOUND INVESTMENTS
• CHINA ISSUED NEW TAX RULES 1 JANUARY 2008 RELEVANT TO INBOUND INVESTORS
• WITHHOLDING TAX OF 10% INSTEAD OF NIL ON DIVIDENDS FROM FOREIGN INVESTMENT ENTERPRISES
• WITHHOLDING TAX FROM 10% ON CHINA-SOURCED PASSIVE INCOME (E.G. DIVIDENDS, INTEREST, RENTS, CAPITAL GAINS, etc)
• TAX PLANNING OF INBOUND INVESTMENTS IS NOW EVEN MORE ESSENTIAL
• CYPRUS CHINA DTT: 10% WHT ON DIVIDEND, INTEREST & ROYALTY; NO CGT ON PROFIT FROM SALE OF SHARES OF CY CO IF IT HOLDS LESS THAN 25% IN CHINESE CO
CYPRUS HOLDING COMPANY FOR INVESTMENTS TO CHINA
11
CYPRUS HOLDING COMPANY-CHINESE INBOUND INVESTMENT
NON-EU PARENT
CYPRUS HOLDING COMPANY
CHINESE OPERATING COMPANY
EU PARENT
WHT ON DIVIDEND PAID 0%
WHT ON DIVIDEND PAID 10%
TAX ON DIVIDEND RECEIVED 0%
PLAN• ESTABLISH CYPRUS COMPANY TO
HOLD OPERATING SUBSIDIARY IN CHINA FOR DIVIDEND STREAM INCOME THROUGH WHICH CAPITAL WILL FLOW INTO CHINA
BENEFITS• WITHHOLDING TAX IN CHINA ON
DIVIDEND PAYMENT TO CYPRUS AT 10%
• DIVIDEND RECEIVED IN CYPRUS IS TAX EXEMPT
• NO WITHHOLDING TAX ON DIVIDENDS TO PARENT WHETHER EU OR NON-EU
CHINESE INBOUND INVESTMENT THROUGH CYPRUS AND HONG KONG CO
NON EU
CYPRUS HOLDING CO
HONG KONG HOLDING CO
EU
WHT ON DIVIDEND PAID 0%
WHT ON DIVIDEND PAID 5%
TAX ON DIVIDEND 0%
CHINESE OPERATING CO
TAX ON DIVIDEND IN HK 0%
PLAN• ESTABLISH CYPRUS COMPANY TO HOLD
OPERATING SUBSIDIARY IN CHINA THROUGH HONG KONG CO FOR DIVIDEND STREAM INCOME THROUGH WHICH CAPITAL WILL FLOW INTO CHINA
BENEFITS• WITHHOLDING TAX ON DIVIDEND FROM CHINA
TO HONG KONG IS FURTHER REDUCED TO 5%DUE TO THE DTT BETWEEN CHINA HK
• DIVIDEND RECEIVED IN CYPRUS IS TAX EXEMPT• NO WITHHOLDING TAX ON DIVIDENDS TO PARENT
WHETHER EU OR NON-EU• IN CASE OF DISPOSAL OF THE INVESTMENT THE
SHARES OF THE CYPRUS HOLDING CO ARE SOLD AND THE PROFIT IS FULLY TAX EXEMPT
CYPRUS ROYALTY COMPANY-CHINESE INBOUND INVESTMENT
NON-EU PARENT
CYPRUS ROYALTY COMPANY
CHINESE OP COMPANY
EU PARENT
WHT on Royalty 10%
No tax on royalty in Cyprus due to tax credit
PlanEstablish Cyprus royalty company to collect royalties from company in China. The Cyprus company is owner of intangibleBenefits•10% WHT on royalty in China•No additional tax in Cyprus because of treaty tax credit•Royalty deductibility in paying company•No WHT tax on dividend paid from Cyprus whether to EU or non-EU
No WHT on dividend
CYPRUS FINANCE COMPANY-CHINESE INBOUND INVESTMENT
Non EU ParentEU Parent
Cyprus Fin Co
Chinese Op CO10 % WHT on Interest
Tax on interest 0% due to tax credit
0% WHT on Dividend
Plan•Establish Cyprus company to be the group finance company of China operations. Capitalisation with equity•Benefits•No additional tax in Cyprus because of treaty tax credit.•Access to the China/Cyprus treaty.•Interest deductibility in borrowing company subject to debt-equity ratio•No WHT on dividends paid from Cyprus whether to EU or non-EU
CAPITAL GAINS-CHINESE INBOUND INVESTMENTS
•When Cyprus company holds less than 25% in Chinese company
• No tax in China no tax in Cyprus when the shares are sold
When Cyprus company holds more than 25% in Chinese company then the holding can be through a number of Cyprus companies.
EUParent
Non EU parent
CyprusComp
Cy Co5Cy Co4Cy Co3 Cy Co2Cy Co1
ChineseCompany
0 CGT25%
0 WHT
Dividend or Interest
0 WHT
Dividend or Interest
CYPRUS HOLDING COMPANY FOR INVESTMENTS TO INDIA
–BENEFICIAL DOUBLE TAX AGREEMENT WITH INDIA-TAXING RIGHT FOR CHARGEABLE GAINS WITH CYPRUS
–PARTICIPATION EXEMPTION ON DISPOSAL OF SHARES – FULLY EXEMPT
–NO WHT ON DIVIDENDS FROM INDIA
–PARTICIPATION EXEMPTION ON DIVIDENDS-SUBJECT TO MINIMAL CONDITIONS
–NO CYPRIOT WHT ON DIVIDENDS PAID BY CYPRIOT COMPANIES
CYPRUS HOLDING COMPANY FOR INVESTMENTS TO INDIA
ParentCo.
BVI
CY Co.
India Co.
India Project
Dividend 0%
Dividend 0%
Dividend 0%
0%
0% CGT
• TAX EFFICIENT HOLDING STRUCTURE
• NO INDIAN CGT CHARGEABLE
• CYPRUS DOES NOT TAX DISPOSAL OF SECURITIES
• NO WHT ON DIVIDENDS FROM INDIA
• NO TAX IN CYPRUS ON DIVIDEND FLOWS
• NO WHT ON DIVIDEND FROM CY Co.
LEGAL ASPECTS OF A CYPRUS INTERNATIONAL BUSINESS COMPANY
• LIMITED COMPANIES• PARTNERSHIPS• BRANCHES• COMPANY INFORMATION FILED AT THE REGISTRAR• EASY REGISTRATION PROCEDURE• TO SERVE OUR CLIENTS BETTER AND QUICKER WE HAVE
READY MADE ‘OFF THE SHELF COMPANIES’
REGISTRATION REQUIREMENTS
• APPROVAL OF NAME• SHARE CAPITAL: MIN
€ 100• SHAREHOLDER: AT LEAST ONE INDIVIDUAL OR COMPANY-
NOMINEE SHAREHOLDER SERVICE• DIRECTOR: AT LEAST ONE CYPRIOT OR ALIEN- NOMINEE
DIRECTOR SERVICE• SECRETARY: INDIVIDUAL OR COMPANY• REGISTERED OFFICE IN CYPRUS• AUDITED FINANCIAL STATEMENTS
SHAREHOLDING
• BENEFICIAL SHAREHOLDERS CAN EITHER HAVE THE SHARES REGISTERED IN THEIR NAME AT THE REGISTRAR OF COMPANIES
OR
• CAN USE NOMINEE SERVICES I.E THE SHARES WILL BE HELD BY OUR NOMINEE COMPANIES IN TRUST FOR BENEFICIAL OWNERS TO ENSURE CONFIDENTIALITY
PROTECTION IN CASE OF NOMINEE SHAREHOLDERS
• REPUTABLE NOMINEES
• DECLARATION OF TRUST IS ISSUED BY THE NOMINEES
• SIGNED INSTRUMENT OF SHARE TRANFER IS GIVEN BY THE NOMINEE TO THE BENEFICIAL OWNER
• CONFIDENTIALITY IS SAFEGUARDED AS :
COPY OF THE PASSPORT IS HELD WITH US AND THE BANK ONLY
THE BANK DOES NOT DISCLOSE THE INFORMATION UNLESS IN CRIMINAL CASE
THANK YOU
GLOBALSERVE CONSULTANTS LTD9 VASSILI MICHAELIDES3026, LIMASSOL-CYPRUSP.O BOX 57048, 3311, LIMASSOL, CYPRUS
TEL. 00357 25 817181, 00357 25 824545FAX. 00357 25 824055
WEB SITE: www.globalserve.com.cy EMAIL: [email protected]
CONTACT PERSONS:DINOS ANTONIOU, C.E.OPHANI SCHIZA ANTONIOU, MANAGINGDIRECTOR