An offshore company is a business established outside the country the owner lives and pays taxes in. The offshore company can be established in one or more countries and the main grounds for setting up an offshore company in Cyprus are the protection of assets and tax reduction.
The types of Cypriot offshore companies are the limited liability company, the branch office, the general or limited partnership, the offshore banking unit, the offshore captive insurance company, the offshore financial services company and the shipping company.
Cyprus is preferred mainly for 2 reasons:
1) Setting up holding structures: for instance for those companies looking to expand into a larger number of countries Cyprus is a very suitable destination to set up your parent company;
2) Setting up Cyprus trading companies for the low corporate tax (12,5%) and 0% dividend tax as well as low company management fees.
More information on the offshore companies in Cyprus are available below:
In order to open an offshore company in Cyprus, the foreign company must comply with some conditions. There are no specific requirements for shareholders and directors of any nationality or residence. If anonymity is desired it can be obtained by using nominee shareholders, but the Central Bank must be informed who the beneficial owners are.
The Cypriot corporate taxes that apply to inland companies are usually applied to offshore businesses as well. The profit tax for offshore companies and branches with a management board in Cyprus is 12,5% and it is one of the lowest tax rates in Europe. There are no withholding taxes for dividends, interests or royalties paid by offshore companies either. Cyprus also has an extended network of treaties in order to avoid double taxation which includes more than 45 countries.
Offshore companies are not allowed to carry trading activities on Cypriot territory with the residents. The only activities an offshore company is allowed to conduct in Cyprus refer to management and control of the business.
If you want to set up a business in Cyprus and need legal advice in order to choose the suitable type of company, you can contact our experts in company formation. If you would like to start an offshore company in another jurisdiction, we can put you in contact with our partners from the Isle of Man, the British Virgin Islands or Belize.