An offshore company is a business established outside the country in which the owner lives and pays taxes. The offshore company can be established in one or more countries and the main reasons for creating an offshore company in Cyprus are asset protection and tax reduction.
The types of Cypriot offshore companies are the limited liability company, the branch, the general or limited company, the offshore banking unit, the offshore insurance company, the offshore financial services company and the shipping company.
Please feel free to contact us if you need help starting a business in Cyprus.
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Cyprus is mainly preferred for 2 reasons:
- establishment of holding type structures: for example, for those companies seeking to expand to a greater number of countries, Cyprus is a very suitable destination to establish their parent company;
- Setting up Cyprus trading companies for low corporate tax (12.5%) and 0% dividend tax, as well as low company management fees.
Conditions for starting an offshore company in Cyprus
To open an offshore company in Cyprus, the foreign company must meet some conditions. There are no specific requirements for shareholders and directors of any nationality or residence. If anonymity is desired it can be obtained using nominated shareholders, but the central bank must be informed who the beneficial owners are.
If you want to create a Cyprus offshore company we can assist you.
Taxes for offshore companies in Cyprus
Cypriot corporate taxes that apply to onshore companies generally apply to offshore businesses as well. The income tax for offshore companies and branches with a board of directors in Cyprus is 12.5% and is one of the lowest taxes in Europe. There are no withholding taxes for dividends, interest or royalties paid by offshore companies either. Cyprus also has an extensive network of treaties to avoid double taxation, which includes more than 45 countries.
Offshore companies are not allowed to carry out commercial activities in Cypriot territory with residents. The only activities that an offshore company can carry out in Cyprus relate to the management and control of the company.
If you want to set up a business in Cyprus and need legal advice on choosing the right type of company, you can contact our Cyprus company formation experts.