Cyprus is an offshore zone or not. Offshore zone of Cyprus. List of offshore zones

The long-known so-called classical jurisdictions, which include Cyprus, are popular with businessmen doing business in various parts of the world. They value this country for its developed infrastructure, optimally functioning banking system, respect for confidentiality and sound tax policy.

Infinity Group offers assistance in registering companies in Cyprus. This is a guarantee of asset security, stability and safety of profits, and a consistently high business reputation. An offshore company in Cyprus is definitely the right solution for those who want to give their business an international status, conduct business with European partners without problems, and most importantly, enjoy a loyal taxation system. It is worth considering that European tax standards apply in the country, so it is necessary to maintain high-quality accounting and submit reports in a timely manner.

Advantages of an offshore company in Cyprus

The country highly values ​​confidentiality, so the use of a nominee director and shareholder is quite acceptable. Among the main advantages of opening an offshore company in Cyprus it is worth noting:

• Prestige and European status.
• Double tax treaties with many countries.
• Low corporate income tax rates (12.5% ​​of net profit), a tax policy that is loyal to foreign companies operating in Cyprus.
• Possibility to obtain a VAT number.

Stages of company registration in Cyprus

• Selecting a name and checking its originality in a special register.
• Preparation of a package of documents.
• Payment of government duties and fees.
• Entering information about a registered company in Cyprus into the register.
• Notarization and apostille of documents.

Infinity Group offers assistance to anyone who intends to buy or register their company in Cyprus. We save the client’s time and help organize the entire process as efficiently and quickly as possible. Specialists are ready to organize an offshore company in Cyprus for the effective development of your business!

13.09.2017

Cyprus is one of the most popular jurisdictions in international tax planning, including among Russian businesses: in rare cases, a group of companies or an international holding does not have at least one company registered in Cyprus in its structure. Cyprus itself has repeatedly been among the leading countries in terms of investment in Russia.

Indeed, a friendly business environment, a favorable tax regime, combined with the benefits of EU membership and a wide network of double tax treaties, make Cyprus an attractive place to register companies, open bank accounts and conduct real business.

However, the websites of hundreds of intermediary companies still offer to register or buy an “offshore in Cyprus”. Moreover, many, including respectable, Russian business and political publications and online resources still call Cyprus an “offshore”, and with the negative connotation that has long been characteristic of this word. In this regard, we propose to figure out once and for all whether Cyprus is an “offshore” (“offshore zone”, “tax haven”, etc.) or not.

First of all, what is offshore?

“Offshore” usually refers to either the offshore zone itself (i.e. a specific country or territory) or a legal entity registered in such a jurisdiction.

Among main features of offshore companies, the following should be highlighted:

• tax-free (or ultra-preferential tax) regime,
• the most confidential nature of corporate and financial information and
• minimum administration and reporting requirements.

So, the first sign of an offshore is a special regime for companies registered in a given jurisdiction, but at the same time not having the right to operate on its territory. It is expressed in full exemption from local taxes(the exception is a small fixed annual fee for company renewal) or maximum preferential taxation, as well as (although not always) the presence of a special status of “international business companies” (International Business Companies, IBC).

The second sign of offshore companies is the traditional confidentiality of corporate registers, confidentiality of data on beneficiaries And lack of international information exchange. However, this feature begins to gradually (and for some countries, rapidly) lose its relevance. It cannot be ruled out that in the coming years there will be virtually no countries left in the world that ensure absolute confidentiality of corporate and financial information.

The third sign of offshore is no obligation to submit financial statements to government agencies. However, today, even in classic offshore jurisdictions, companies are required at a minimum to maintain and store their financial records (accounting records, primary documents), which makes it possible to establish the content of the company’s transactions and determine its financial position. In addition, in modern conditions, the preparation of financial statements, even for a classic offshore company, becomes relevant due to the need for Russian tax residents to comply with the legislation on controlled foreign companies (CFCs).

Is Cyprus offshore?

Now let’s correlate the above-mentioned signs of offshore companies with what Cyprus is today.

Firstly, Cyprus is not a tax-free zone– it establishes a corporate income tax at a rate of 12.5%, and there are a number of other taxes (capital gains tax, VAT, special contribution for defense, individual income tax on a progressive scale, etc.). Despite preferential tax conditions for companies (e.g. in relation to dividends received, withholding tax), these in themselves do not make Cyprus offshore.

Cyprus has a significant number double taxation agreements(more than 50), which is almost never typical for offshore companies.

Finally, in the area of ​​general tax policy, banking regulation, anti-money laundering, Cyprus, as a member of the EU, is subject to regulations and directives of the European Union, which in principle excludes its “offshore” status.

Secondly, in Cyprus, unlike offshore zones, information about directors, secretaries and shareholders companies is publicly available. Only information about the beneficial owners remains confidential (under normal circumstances).

Cyprus is actually implementing international exchange of tax information“upon request” (both on the basis of bilateral agreements on the avoidance of double taxation or on the exchange of tax information, and on the basis of the multilateral Convention on Mutual Administrative Assistance in Tax Matters of 1988/2010), including in relations with the competent authorities of Russia.

Moreover, Cyprus is a member automatic exchange information on financial accounts according to the OECD CRS standard, and is among the “first priority” of countries starting the exchange in September 2017. Currently, according to the OECD portal, automatic exchange is “activated” between Cyprus and 52 countries (after 2018, Russia may also be included in this number).

Thirdly, all Cypriot companies, without exception, by force of law are required to maintain accounting records and submit audited financial statements, which is not typical for any classic offshore.

Thus, modern Cyprus does not satisfy any of the key characteristics of offshores and, therefore, is not an offshore.

Is Cyprus considered an offshore in Russia?

From the point of view of current Russian legislation, Cyprus is not offshore zone.

The basic list of offshore companies is contained in Order of the Ministry of Finance of Russia dated November 13, 2007 No. 108n. Republic of Cyprus was excluded from this list from January 1, 2013. This list affects, in particular, the possibility of applying a zero tax rate on dividends in Russia, the recognition of transactions as “controlled” and the possibility of exemption from tax on CFC profits for active holding and subholding companies).

Moreover, Cyprus was originally absent in the list of countries that do not exchange information with Russia (approved by Order of the Federal Tax Service of Russia dated September 30, 2016 No. ММВ-7-17/527@). This list affects the possibility of applying certain exemptions from taxation of CFC profits, as well as the need for the mandatory preparation of an audit report on the financial statements of the CFC.

Previously (in 2010) Cyprus was excluded and from the list of offshore zones approved by the Directive of the Bank of Russia dated August 7, 2003 No. 1317-U. This list determines the procedure for Russian banks to establish correspondent relations with non-resident banks.

Thus, Cyprus is not included in any Russian list of offshore zones, that is, neither the Ministry of Finance, nor the Federal Tax Service, nor the Central Bank of the Russian Federation officially recognize Cyprus as an “offshore zone”.

Why is Cyprus still often called an “offshore”?

The offshore zone in Cyprus actually existed earlier - since the 70s of the 20th century. However, it was abolished in 2003 as part of tax reforms that preceded Cyprus' accession to the European Union in 2004.

The reform unified the status of companies by abolishing the division of companies into local and international commercial (i.e. offshore) and linking taxation in Cyprus solely to the residence of companies (determined on the basis of the “direction and control” criterion). Corporate tax was increased from 4.25% to 10% (from 2013 to 12.5%). The current rules regarding dividends received and withholding tax on payments of income to non-residents were introduced.

At the same time, large-scale measures were taken to bring Cypriot legislation into compliance with the requirements of the EU, OECD and FATF. Already at the beginning of 2009, Cyprus was included in the “white” part of the famous “OECD list” (published regularly from 2009 to 2012) as “a jurisdiction that has largely implemented internationally agreed tax standards.”

However, even despite all of the above, Cyprus “by inertia” continues to maintain a certain “offshore image” in Russian and foreign media and non-professional sources, where “offshore” is a general term for any companies or assets located abroad (and not necessarily in tax-free countries ). Such a generalization is, of course, incorrect. In the same sense, offshores are often understood in the context of “de-offshorization” in Russia, which, as is known, applies not only to offshore companies themselves, but also to any controlled foreign companies, including Cypriot ones.

Offshore in Cyprus is a territory with preferential tax legislation

Offshore in Cyprus: advantages and conditions for organizing a business, consequences of the global crisis

Expand contents

Collapse content

Offshore in Cyprus - this is the definition

Offshore in Cyprus is an island state located in the eastern part of the Mediterranean Sea, famous for its mild and attractive climate both for resort holidays and for doing business. This is an international offshore center that allows you to conduct commercial activities under the terms of preferential tax legislation and while maintaining complete confidentiality.

Offshore in Cyprus is an island in the northeastern part of the Mediterranean Sea, a territory with preferential tax legislation.

Offshore in Cyprus is international offshore business and financial center. Cyprus, as an offshore center, is very popular among businessmen around the world, especially Russian ones. Most of the investments in the Russian economy pass through Cyprus.

Offshore in Cyprus - This island country in the eastern Mediterranean Sea. Member of the European Union since May 1, 2004.

Offshore in Cyprus- This the third largest island in the Mediterranean Sea - famous for the fact that the sun shines here 340 days a year. The healthy climate and natural beauty of Cyprus, combined with the archaeological wealth and hospitality of its people, make the island an ideal holiday destination. Each city in Cyprus is at the same time a large resort center with many comfortable hotels and beaches.

Cyprus - This an island glorified in legends and myths. It was here that the goddess of love, Aphrodite, emerged from the foam of the sea. Every year, newlyweds come to Cyprus from all over the world. According to legend, if lovers swim in these places, they will never be separated.

Officially, the territory of the Republic of Cyprus includes 98% of the island of Cyprus (the remaining 2% is occupied by the British military bases of Akrotiri and Dhekelia), as well as the nearby islands of Agios Georgios, Geronisos, Glyukiotissa, Kila, Kiedes, Kordylia and Mazaki. In reality, after 1974, the island is divided into three parts: 60% of the island's territory is controlled by the authorities of the Republic of Cyprus (populated mainly by Greeks), 38% by the Turkish Republic of Northern Cyprus (populated mainly by Turks), 2% by the British armed forces. The TRNC is recognized as an independent state by the Republic of Abkhazia and Turkey.

Area - 9.3 thousand square meters. km. The length of the coastline is about 800 km. The capital is Nicosia. The official language is Greek and English. The currency is the euro. The government system is a parliamentary republic. The head of the republic is the president. The legal system is based on English common law. Cyprus is a signatory to the 1961 Hague Convention. Cyprus is part of the European Union and the Eurozone. Since the division, the vast majority of Greek Cypriots live in the south and Turkish Cypriots live in the north. The total population is about 790 thousand people, of which 160 thousand are Turks. Also living in Cyprus are 17 thousand Englishmen, at least 40 thousand Russians (according to the Ambassador of the Russian Federation), 4 thousand Armenians.

After the 1974 war, some 180,000 Greek Cypriots fled or were forcibly resettled to the south. About 42 thousand Turks moved to the north. And only in the city of Pyla, Larnaca district, under the UN-appointed administration, both groups of the population live. The population under the control of the Republic of Cyprus, at the end of 2011, reached 838,897 people, many of whom (21.4%) are foreign citizens. The majority of the population of Cyprus - ethnic Greeks - professes Orthodox Christianity, while the ethnic Turks profess Islam.

Offshore in Cyprus

For Russia, the words “Cyprus” and “offshore” are almost the same thing. Most Russians express their idea of ​​Cyprus in the same way, slightly changing the Soviet-era slogan: when we say “Cyprus,” we think offshore, and when we say offshore, we mean Cyprus. The starting capital when opening a company in Cyprus, in comparison with other European countries, is quite low. It is approximately 1900 euros, and for the incorporation of a company in the amount of 7000 euros has been waived. In Europe, income tax starts at 15%, while in Cyprus it is 10%. There is no tax on purchase. Offshore Cyprus is the best option for doing business in Europe. This offshore is not a “classic offshore” like Dominica, Seychelles, BVI. Offshore Cyprus is subject to taxation and requires reporting and auditing. However, due to the fact that Cyprus is part of the EU, there are no restrictions when concluding contracts between European and Cypriot companies (unlike some offshore jurisdictions). When working with Russia, Cyprus also has an undeniable advantage - the Double Taxation Avoidance Treaty signed between Russia and Cyprus.

There are no restrictions regarding starting capital for opening a company. But it is worth considering the costs of registration, organizational, legal, advisory and other costs when organizing a business. The first step before registration is to decide where the company will be managed: directly in Cyprus or from another country. In the case of residence, companies are subject to UK laws, according to which the legal entity is resident in the state from which management and control is exercised. Thus, Cyprus is a representative of the British offshore model, the main elements of which are non-resident companies.

Advantages of doing business offshore in Cyprus

Registration of Cyprus offshore companies was one of the best options to invest the capital that was exported back to your country. In particular, when purchasing shares of a Russian company, a businessman registering a company in offshore Cyprus may not indicate his name in the register of shareholders, but appoint a proxy who has the right to vote at the meeting of the company’s shareholders. The profit received from the sale of shares, as well as dividends, are transferred to Cyprus, where they are not subject to taxation. Taking into account the fact that Cyprus is included in many “black lists” as the most “offshore” zone in its classical sense, it is not appropriate to use “offshore” companies registered in the territory of the Republic of Cyprus for ordinary trading operations. expedient.

But in some cases, offshore companies in the Republic of Cyprus are the best way to reduce taxes. That's why. For offshore companies registered in Cyprus, there is an agreement on the avoidance of double taxation, which Cyprus has concluded with many countries, including Russia. Based on this, Cypriot offshore companies are good for registering such forms as subsidiaries in Russia (i.e. participating in the capital of Russian companies, in the Russian stock market and a number of other operations). The most popular scheme for minimizing taxes in a company’s commercial operations is the introduction of a kind of intermediate company in the chain of transactions between companies. Moreover, all income from the high tax zone ends up in Cyprus, i.e. offshore where taxes are very low. In this kind of scheme, for a company from Russia, goods are supplied not directly from a foreign company, but from “its own” Cypriot company used for these purposes, which significantly reduces the cost of income taxes. For the export of goods, the reverse scheme is used. Based on the above, the Cypriot offshore is very beneficial for doing business and minimizing losses in profit.

The advantages of creating an offshore company in Cyprus include low costs for registration, annual maintenance and filing of an annual (zero) balance sheet. Also, due to the fact that Cyprus has signed double tax treaties with almost all countries, offshore companies can use this advantage. Also important is the possibility of using a nominee service, which allows the beneficiary (real owner) to remain incognito when carrying out business transactions and minor legal actions. And, as you know, confidentiality is one of the motives for creating an offshore company. This also includes preferences arising from minimizing and optimizing tax deductions, as well as image benefits from owning a respectable European company. Finally, all these advantages are actively supported by the government of the state of Cyprus.

Advantages of registering a company in Cyprus:

Taxation of non-resident companies is carried out in accordance with the general principles of taxation in Cyprus (10% income tax);

Offshore partnerships are not subject to tax on profits earned outside Cyprus;

Exemption from taxes on all types of dividends paid by the International Business Company (IBC);

Interest paid by a company to another person or company outside Cyprus is not subject to income tax;

Cyprus has treaties with 38 countries on the exclusion of double taxation (including Russia and Ukraine);

Offshore companies located in Cyprus can purchase equipment for their own needs without paying customs duties;

The services of a nominee director are permitted, information about the founders is not contained in the registration papers and the names of these people do not appear in any public records, which ensures complete confidentiality;

There are no audit requirements.

Offshore banking system in Cyprus

The banking system of Cyprus, although not as perfect as, for example, in Hong Kong, is quite flexible. However, the services of Cypriot banks cannot be called cheap. Many Cyprus Commercial Banks have websites in English, including the Central Bank of Cyprus (centralbank.gov.cy). Some banks, such as ALPHA BANK, have all the necessary information in Russian (alphabank.com.cy). Laiki Bank has over 150 branches in Cyprus, 15 branches in the UK, 20 branches in Greece (subsidiary bank) and 5 branches in Australia. Representative offices in Russia, USA, Canada, South Africa, Yugoslavia.

The Central Bank of Cyprus (Greek: Kεντρική Τράπεζα της Κύπρου, Turkish: Kıbrıs Merkez Bankası) is the central bank of the Republic of Cyprus, located in Nicosia. The bank was founded in 1963. In 2008, the Central Bank of Cyprus became a member of the Eurozone. Banking in the Republic of Cyprus has long been one of the priority areas for the development of the offshore sector of the country's economy, although ultimately the insufficient diversification of their assets led to a crisis in the banking system. As of the beginning of 2013, there were 26 banking systems from different countries operating in the Republic of Cyprus, containing in their accounts an amount equivalent to 835% of the country’s GDP, which is significantly higher than the EU average of 354%. At the start of the crisis, the island's banking system contained deposits worth 68 billion euros at interest rates reaching +4.5% per annum, including 38 billion (55.9%) in accounts containing over 100,000 euros. Maintaining such a sum has become an unbearable burden for the republic, whose population (0.84 million people) is smaller than Voronezh. Among these 26 banks, the largest were the Cypriot-origin systems Bank of Cyprus and the Cyprus People's Bank. They also have branches abroad, primarily in the UK. Vneshtorgbank of the Russian Federation also has its branch in Cyprus. Before the acute banking crisis of 2013, the country's banking systems were trying to digest capital flowing from outside into two rather risky sectors of the economy: the construction boom on the island itself (which led to the development of a financial bubble in the real estate market), as well as the purchase of rather risky government debt obligations Greece, which was on the verge of default due to the actual loss of control over the country's debt obligations.

On March 16, the Government of Cyprus was forced to freeze the activities of the country's banking system (with the exception of foreign branches) to prevent a massive outflow of capital, as well as to expropriate part of the deposits of private individuals. As of March 24, 2013, the plans of the country's president include the restructuring of the Bank of Cyprus, as well as the liquidation of the Cyprus People's Bank. The losses of their investors, as well as the size of layoffs, have not yet been determined. On Saturday March 30, 2013, Greek media published the text of the decree of the Central Bank of Cyprus on the reorganization of the bank accounts of the country's two largest banks with two different formulas for restructuring their accounts. According to it, the Bank of Cyprus plans to issue shares for which 37.5% of the amount of accounts exceeding 100 thousand euros will be exchanged. An additional 22.5% of invoice amounts exceeding 100 thousand euros will not accrue interest. It is assumed, however, that the bank will also be able to exchange these funds for shares in the future. Interest will be charged on the remaining 40% of deposits over 100 thousand euros, but these funds also cannot be withdrawn from the account until the financial and economic situation in the country normalizes. According to media reports, the Central Bank of Cyprus also prepared a decree on the reorganization of the Cyprus People's Bank. Finance Minister Michalis Sarris said the bank's large depositors may have to accept the loss of 80% of funds in accounts holding more than €100,000. The remaining 20%, according to the minister, can be obtained over the next few years.

How to use offshore in Cyprus

Construction of international holdings:

Registration of shares (shares) of Russian enterprises into Cypriot holding companies in order to protect assets;

Withdrawal of dividends with minimal taxes abroad.

Creation of a financing mechanism:

Organization of project financing through a Cypriot company;

Optimization of taxation of interest income;

Reducing the borrower's tax obligations;

Registration of ownership rights to intangible assets: trademarks, inventions, industrial designs, computer programs, etc.:

Asset protection;

Optimization of taxation of license fees;

Reducing the licensee's tax liability;

Withdrawal of funds to a controlled foreign company.

Organization of international trade in goods:

Optimization of currency payments;

Tax optimization;

Obtaining preferences of European traders: VAT, EORI;

VAT

Registration of marine vessels for private and commercial use in order to protect assets and optimize costs;

Creation of European licensed investment companies on favorable terms;

Organization of E-Commerce business: Processing companies, payment systems, merchant accounts;

Obtaining preferential loans secured by Russian real estate;

Sale of a business through the placement of shares of a European company on stock exchanges.

Taxation of offshore business in Cyprus

The current tax regime is approved by the EU and OECD. Companies registered in the Republic of Cyprus may have resident or non-resident status:

A tax resident is a company that is managed from the territory of Cyprus (as a rule, it is enough that the board of directors includes citizens or residents of the Republic of Cyprus and the decisions of the board of directors are made on the territory of the state). Only residents can take advantage of the benefits provided by the Double Taxation Agreement;

Non-resident companies are exempt from paying tax on income received outside Cyprus and are used as an offshore company. Cyprus imposes more stringent requirements on such companies than, for example, an offshore company in Belize. Each company, regardless of whether it operates in the country and pays income tax, must submit and have its reports certified by an auditor.

Income Tax and Corporation tax, regulated by The Income Tax Law, 2002, No.118(I)/2002. The subjects of this taxation are all persons receiving income within the country. Income received by entities on the territory of the Republic is subject to taxation. The Income Tax applies to individuals, and the Corporation Tax applies to legal entities. For legal entities, the tax percentage is 10. To determine the tax base, expenses are deducted if they were incurred for the purpose of generating income and were fully incurred. Special Defense Contribution, regulated by Special Defense Contribution Law 117(I)/2002. The subjects of the tax are residents of Cyprus, and the objects are dividends, interest income and rent. The tax base is determined by the type of income. Capital Gains Tax, established and regulated by Capital Gains Tax Law 52/80 as amended. During the sale of real estate, a 20% tax is paid on capital gains located in Cyprus. The object of tax is direct income from sales.

Stamp Duty is levied on any transaction in the business environment (from registration and purchase to the issue of shares). Foreign companies are exempt from it. In conditions from CYP2-CYP20, the amount is 2 cents, when exceeding CYP20 - 4 cents.

Contracts (transactions carried out in Cyprus): less than CYP100,000 - CYP1.5 for every CYP1,000, over CYP100,000 - CYP2 for every CYP1,000.

When registering a company with limited liability and authorized capital: up to CYP5,000 - CYP75, from CYP500,001 to CYP100,000 - CYP125 and over CYP10,000 - CYP125 for the first CYP10,000 and CYP3 for each subsequent CYP1,000.

Issue of shares by a limited company: CYP1 for every CYP1,000.

Value Added Tax, regulated by Cyprus VAT Law 95(I)/2000 as amended. This type of tax is paid on income from operations related to the sale of services, goods in Cyprus and when importing goods. There are 3 tax rates: 15% - standard, 5% - reduced and 0% - zero.

Social Cohesion Fund Contribution. Tax to this fund is paid in the amount of 2% on the amount of wages of hired company employees. Foreign companies can receive tax exemption, provided that the personnel are foreign employees.

To take advantage of interstate agreements for the avoidance of double taxation (on income tax, dividends, etc.), which Cyprus has with more than 40 states, it is necessary to obtain a tax residence certificate. To obtain such a certificate, it is necessary that the company is managed from Cyprus. This can be achieved even if the directors are not resident in Cyprus. To do this, it is necessary to correctly draw up the minutes of the meeting of directors of the Cyprus company. Since 2013, the flat corporate tax rate is 12.5%.

Cyprus has concluded agreements with more than 40 countries on the elimination of double taxation, which can be successfully used in international tax planning. The Double Taxation Avoidance Agreement concluded between Cyprus and Russia provides great opportunities for tax optimization.

Types of offshore companies in Cyprus

It has become a tradition that companies registered in Cyprus are called “offshore”. Although now Cyprus is not an “offshore” jurisdiction, i.e. companies registered in Cyprus are taxable and essentially onshore. But habit is second nature, so we will continue; companies registered in Cyprus are called “offshore companies”. Type of offshore company: Cyprus international business company (offshore). An “offshore” company can operate in Cyprus in the following organizational and legal forms:

Trading companies (most companies operating in Cyprus). In general, they are used for conducting transit trade, on which relations with the West and East are built.

Holding and investment companies. Such companies often take part in joint ventures. Thus, it is possible to reduce (or completely avoid) withholding taxes. The advantage of Cyprus holding companies is that there is no tax on the payment of dividends to shareholders.

Service companies. The main task of these companies is to provide various services to promote goods, supply the labor necessary to produce the planned products, provide transportation services, perform accounting tasks, etc.

Financial companies. The activities of such companies are based on the financing of enterprises. In addition, they can carry out various operations with loans abroad. In this case, it is profitable to finance the countries with which the agreement has been signed, as well as those countries in which the tax will be minimal (absent).

Royalty companies. Double taxation treaties provide for low tax rates on royalty companies, making the establishment of royalties in Cyprus extremely advantageous.

All companies that use the royalty scheme automatically become VAT taxpayers (Cyprus). This scheme provides for the following: any company that is registered in an offshore zone and is the owner of the rights to certain intellectual property, under the terms of a concluded agreement, provides an object of intellectual property for use by a Cyprus resident company. The resident company enters into an agreement with the Russian company. Therefore, the use of the facilities will be carried out on Russian territory.

Any company that is registered in an offshore zone is considered the owner of its intellectual property. An agreement is concluded between this company and a resident of Cyprus for the use of objects that are the intellectual property of the company. In parallel, the company of the Republic of Cyprus enters into an agreement with a Russian company, and the subsequent use of intellectual property takes place on the territory of the Russian Federation. The Russian company pays royalties to Cyprus, which in Russia are subject to an additional value tax (18% rate). In case of payment of royalties to Cyprus, the Russian company (source) is not subject to profit taxation.

In the case of outgoing royalties, VAT is charged, but may not be paid for some reasons. This may be the transfer of copyrights, trademarks, etc. Since the sale will take place directly on the territory of Cyprus, which represents the place of demand (buyer), the Cyprus company must calculate the VAT required for payment. In this way, VAT is calculated, but the tax itself is not actually paid.

In the states that are part of the EU, both taxpayers and recipients of goods (services) are subject to VAT credit with the condition that this product (service) will be supplied to third countries, and VAT would be charged only if the goods (use services) in the state that is a supplier to third countries. This condition is fixed in the Cyprus VAT law.

Real estate companies. They are widely used to carry out various economic transactions related to real estate.

Shipping companies. Cyprus is considered an excellent center for setting up shipping companies.

International Financial Corporations.

Double taxation agreements. The Republic of Cyprus has concluded agreements for the avoidance of double taxation with the following countries: Armenia, Belgium, Bulgaria, Great Britain, Hungary, Germany, Greece, Denmark, Egypt, India, Ireland, Italy, Canada, China, Kuwait, Kyrgyzstan, Lebanon, Mauritius, Malta, Moldova, Montenegro, Norway, Poland, Russian Federation, Romania, Serbia, Singapore, Syria, Slovakia, Slovenia, USA, Tajikistan, Turkmenistan, Thailand, Ukraine, Uzbekistan, Finland, France, Montenegro, Czech Republic, Sweden, South Africa, Japan.

Disadvantages of companies in Cyprus:

The need to provide audited financial statements, the cost of which may be

from 1000-3000 euros.

Procedure and procedure for registering an offshore company in Cyprus

Verification and confirmation of the company name in the register - preparation and completion of all necessary documents (Memorandum and Articles of Association, various resolutions).

Payment of required registration fees and charges.

Incorporation of a company in the Register of Companies.

Notarization and apostillization (if necessary).

Delivery of documents to the client by courier mail (DHL, UPS).

Documents for registering an offshore company in Cyprus

Company with nominee service:

Company registration certificate in English, apostilled;

Certificate of shareholders in English, apostilled;

Company No. 1 share certificates;

Certificate of directors and secretary in English, apostilled;

Certificate of the company's legal address in English, apostilled;

Memorandum of Association and Articles of Association of the company in Greek, apostilled;

Memorandum of Association and Articles of Association of the company in English, apostilled;

Minutes of the first meeting of directors;

General power of attorney, notarized and apostilled;

Corporate resolution on the issuance of a general power of attorney;

Letter of appointment of director;

Letter of appointment of company secretary;

Company's stamp;

Shareholder Trust Declarations.

Restriction of activities of offshore companies in Cyprus

When registering a company, the name, address, nationality and residence of shareholders is required, but this information is confidential.

IBCs are not allowed to carry out banking, insurance activities or provide financial services.

Cyprus IBCs cannot conduct business with residents of Cyprus.

Certain border operations may be carried out with the permission of the Central Bank of Cyprus: transit trade through Cyprus, repackaging for re-export, within tariff classification, printing of foreign language magazines or books for distribution abroad, storage, repair or maintenance of goods to be used or sold outside Cyprus, the establishment of private bonded warehouses for foreign goods intended for re-export.

Deadlines for registering offshore companies in Cyprus

The registration period for a Cyprus company is approximately three weeks and is subject to the following procedure: one week is required to obtain approval for the name of the Cyprus company; Another week is spent on the actual registration process; and finally, the third week is required for apostille of registration documents for a ready-made company.

Registration of a new company usually takes 3 weeks. Delivery of documents to Moscow - 2-3 days (DHL).

Ready-made companies are provided immediately.

Confidentiality of offshore companies in Cyprus

The level of confidentiality is quite low. In Cyprus, the information contained in the constituent documents of a Cyprus company (Memorandum and Articles of Association, Certificates of shareholders, directors, secretary, registered office of the company) is available. However, when using a nominee service (shareholders and/or directors), information about the beneficiaries of the Cyprus company remains closed. Information about the shareholders, directors and secretaries of the “offshore” company of the Republic of Cyprus is stored in the Register and is publicly available. When using nominee Shareholders and Directors, the true owner of the company cannot be identified.

Deliberate liquidation of offshore companies in Cyprus

The Cyprus Company Law provides for the possibility of voluntary winding up of a company. To carry out liquidation, the company must be creditworthy. Voluntary liquidation of a company is governed by Articles 261 to 292 of the Cyprus Companies Law. Below is a summary of the steps required to wind up a Cyprus company.

Step 1. Holding a meeting of the Board of Directors and adopting a resolution on the voluntary liquidation of the company:

To prepare for voluntary winding up of a company, the Directors must approve a statutory declaration that the company is creditworthy and pay all debt obligations. The statutory declaration drawn up at the meeting of the Board of Directors must contain a statement that a detailed investigation of the company's affairs has been made, as a result of which it has been determined that the company can pay its debts. After the declaration of creditworthiness, a general meeting is scheduled, at which the members of the Company make a firm decision on the voluntary liquidation of the company. This is recognized as the date of commencement of liquidation of the company. From this moment on, the company ceases to conduct business, with the exception of the liquidation procedure and the necessary operations for this.

Step 2. Appointment of liquidator and submission of relevant documents:

A liquidator must be appointed at a meeting when a decision is made to liquidate the company. He is responsible for completing all the affairs of the company and for distributing the capital of the company. The winding up order must be published in the official gazette within 14 days, making any legal action against the winding up of the company possible. Within 5 weeks of the decision to wind up the company, a declaration must be drawn up and sent to the Companies Registration Office. Such a declaration must contain provisions regarding the assets and liabilities of the company.

Step 3. Obtaining a certificate of liquidation:

Debts must be repaid in full within 12 months of the commencement of liquidation. As soon as all debts are paid, a certificate of absence of tax debt is issued. Immediately after completion of these actions, the liquidator calls a general meeting of the company. This is done by announcing the meeting in the official newspaper one month before it takes place. At the meeting, the liquidator will issue the winding up bill, explain what it consists of, and how the company's property assets will be distributed. All remaining capital is distributed among shareholders. Within a week of the meeting, a copy of the bill must be submitted to the Registrar's Office. Within approximately 3 months of submission of all documents, the Companies Registration Office will issue a Certificate of Dissolution and the company will be deemed to be wound up.

As you can see, the liquidation process is quite simple, and if no difficulties arise, then the Intentional Liquidation of a Company in Cyprus is carried out within 6-8 months.

Reporting of offshore companies in Cyprus

Every company registered in Cyprus is required to submit financial statements (Financial Statements) to Companies House and Tax Returns to the Tax Office annually.

Financial statements include: director's report, balance sheet, profit and loss account, explanatory note to the balance sheet and profit and loss account, auditor's report (if a statutory or voluntary audit was carried out), consolidated statements (if a Cypriot the company has subsidiaries and is not exempt from filing consolidated statements), a statement of cash flows and other reports and explanatory information included at the discretion of the company's auditors and directors.

Tax reporting of a Cyprus company is divided into: main, submitted at the end of the year and intermediate, submitted before July 31 of the current year. We need a year-end report on business results. activities of the company and an audit with a financial report on it. From the moment of registration of an “offshore” company to the first reporting period, no more than 18 months should pass.

Requirements for naming offshore companies in Cyprus

The name must end with the word "Limited", or the abbreviation "Ltd.". Restrictions on names - without special permission, registration of names containing the words their derivatives is not allowed: “Asset Management/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/Trustee".

Mandatory requirements for the company: Availability of a legal address and a registered agent in Cyprus.

A Cyprus offshore company must have a company name that is legally approved by the Registrar of Companies. The name of the company will not be approved in cases where the name of the new company is similar to the name of a company that was founded earlier and/or currently exists, the name is similar to a popular trademark, the name of the company implies a religious direction, the name of the company implies the names of countries, cities, other geographical locations, the name of the company is in any way misleading, the name of the new company is similar to the name of a company that carries on similar activities, the name of the company implies government or royal patronage, other variations of the name that the Registrar of Companies considers objectionable and will refuse their legal approval.

Requirements for shareholders of an offshore company in Cyprus

Shareholders of an offshore company in Cyprus can be both individuals and legal entities, regardless of their nationality. The company must have at least one shareholder. The director of the company can be either an individual or a legal entity, regardless of his nationality and citizenship. The minimum number of directors of a company is one. Control must be carried out directly from Cyprus, therefore the director of the company for which the benefits of the tax system will be available is a resident of Cyprus. The secretary of the company can be either an individual or a legal entity, regardless of its nationality.

An individual is considered a resident of the Republic of Cyprus if during a financial year he resides in the country for more than 183 days. A company is a resident if its management is located in Cyprus. Resident companies are subject to total income tax, non-resident companies only on income received in Cyprus.

Every offshore company must have an office in Cyprus. Each resident company undertakes not only to pay the necessary taxes, but also to maintain financial reporting on them. Unlike offshore zones, all information about the directors and shareholders of Cyprus companies is accessible. Thanks to these and many other characteristics, Cyprus companies are considered an ideal vehicle for conducting corporate activities. Their prestige is recognized throughout the world.

The cost of services for registering an offshore company in Cyprus includes

Payment of government fees, legal address in Cyprus, company registration certificate, registered address certificate, shareholder certificate, director certificate.

As well as payment for a general power of attorney with an apostille, apostilled translation of documents into English, a trust declaration, a letter of transfer of shares, a rubber stamp, courier delivery of documents to Russia.

Economy of the offshore Republic of Cyprus

The economy of the Republic of Cyprus is highly dependent on the influx of offshore capital from foreign countries, including Russia. A similar financial direction of the country’s economy began to take shape during the period of British colonial rule and over time took on an increasingly pronounced speculative nature, which in turn increased the risks associated with the growth of the so-called financial bubble. By 2012, the share of capital contained in the banking sector of the Republic of Kazakhstan reached 835% of its GDP. About a third of all deposits in Cyprus belong to foreign citizens, primarily from the Russian Federation (Russian banks hold about 20 billion euros in Cyprus, about 30% of all deposits, as of 2013), they issued another 40 billion as loans various Cypriot companies. And Russian businessmen transferred approximately $12 billion for storage to Cypriot offshore companies. It is noteworthy that throughout the 2000s, Cyprus was one of the largest suppliers of foreign investment in the Russian economy. However, most of the investment influences from Cyprus come from capital once transferred there by citizens of the Russian Federation itself, i.e. there is a return of part of the withdrawn capital. The Cyprus government will solve its problems at the expense of bank depositors, taking away up to 10% from them in one day

The massive influx of capital in expensive, highly convertible currencies gradually led to a disproportionate rise in the cost of labor in the country and gradually reduced the competitiveness of other sectors of its economy (industry, agriculture, tourism). As a result, the country became one of the leaders in the European Union in terms of unemployment growth, which reached 14.7% in February 2013. This became especially obvious after the country entered the Eurozone, when the Republic of Kazakhstan actually lost control over financial processes within its territory. The problem of the country's growing external debt is also acute. In 2011, due to the deteriorating economic situation on the island, Russia provided the Cypriot government with a loan of 2.5 billion euros for a period of 5 years at 4.5% per annum. The appeal to Russia occurred because none of the world's creditors agreed to provide a loan at less than 10% per annum. In 2012, the Kirpio government asked for a new tranche of a loan from the authorities in the amount of 5 billion euros, but was refused by the Russian government.

To save the country's economy from collapse, injections of 17 billion euros are required in 2013. In March 2013, the authorities of the European Union, the European Central Bank and the IMF put forward a plan that provides for the freezing of Cypriot deposits exceeding 100 thousand euros: they are planned to be forced to be stored in special accounts at a minimum interest rate for a period of 15 to 30 years. In addition, at the same time the government of the country officially appealed to citizens with a request to share their income with the government in the name of saving the country's economy. Shortly thereafter, the Cypriot government froze all accounts in the country's banking system. On March 24, 2013, French Finance Minister Pierre Moscovici compared the economic model of the Republic of Cyprus to a bankrupt casino.

General information about the Republic of Cyprus

Republic of Cyprus- a state in Western Asia located on the island of Cyprus. The island with a total area of ​​9.2 thousand km2 is located in the northeastern part of the Mediterranean basin at a distance of 380 km from Egypt, 105 km from Syria and 75 km from Turkey. The Greek mainland is located 800 km to the west, and the nearest Greek islands - Rhodes and Karpasos - are 380 km away. The silhouette of Cyprus looks like a lizard frozen in the sun. Cypriots compare the contours of their island with a golden-emerald tree leaf that has fallen into the sea. In the southwest of the island there is the vast Troodos mountain range with the peak of Olympus (Chionistra), whose height is 1952 m above sea level. The coastline in the north is rugged and rocky, while the south has long sandy coastlines. Forests make up about 20% of the total territory of Cyprus. There are 2 salt lakes on the island, one of which is used for salt extraction.

Cyprus is an independent sovereign republic with a presidential form of government. Cyprus first gained independence in 1960. In 1974, Turkish troops landed on the island, since then 37% of the northern territory of the country belongs to Turkey. There are no diplomatic relations between the Greek and Turkish parts. The Turkish part is closed to entry from the Greek side. The capital of Cyprus is Nicosia.Time is 1 hour behind Moscow. The main cities (aka resorts) are Limassol, Larnaca, Paphos, Ayia Napa, Protaras, Polis. Ski resort (also a nature reserve) - Troodos Mountains. Cyprus is an island of beauty and a land of contrasts. Cool cedar forests in the mountain ranges and golden, sun-drenched sandy beaches. The peace and quiet of the villages contrasts sharply with the bustling life of modern cosmopolitan cities; the view of luxury hotels on the seashore is replaced by amazingly beautiful natural landscapes.

In 1974, Turkey occupied the northern part of Cyprus, and since then the island has been divided into Turkish Cypriot (Turkish Republic of Northern Cyprus) and Greek Cypriot parts. The capital Nicosia is divided into two parts by a demarcation line. Population, demographics, capital and major cities. The population of Cyprus is 736.6 thousand people, of which 176 thousand (including 60 thousand immigrants from Turkey) live in the territory of the “Turkish Republic of Northern Cyprus”. 78% of the island's population are Greek Cypriots, 18% are Turkish Cypriots, and Armenians also live. The capital of Cyprus is Nicosia, which is divided into two parts: Greek and Turkish. The Greek part is home to 177 thousand people, and the Turkish part is home to about 30 thousand people. The largest cities are Limassol, Larnaca, Paphos. The cities of Famagusta, Kyrenia, and Morphou are located on territory controlled by Turkish troops.

Political structure. According to the constitution, which came into force on August 16. 1960, the country's government system is based on the principle of ethnic dualism. Cyprus is a presidential republic. The President shall be a Greek Cypriot, the Vice-President shall be a Turkish Cypriot; each is elected by the respective community for a five-year term. The President and Vice President exercise executive power through the Council of Ministers, which they form, and both have the right of veto. Legislative power belongs to the House of Representatives, whose deputies are elected for a term of 5 years by each community separately.

Since intercommunal clashes in December 1963, Turkish Cypriots have not participated in the work of the House of Representatives, the Council of Ministers and other government bodies of the Republic of Cyprus. The Council of Ministers consists of 11 representatives of the Greek community. The House of Representatives consists of 56 Greek deputies (24 seats are reserved for Turkish Cypriots). Currency - Cypriot pound = 100 cents. Both in the Republic of Cyprus itself and in the Cypriot “offshore” zones, there is currency regulation, but this does not apply to “offshore” companies. All lawmaking in Cyprus is based on the legal system of the British Kingdom, but the political system is built on the model of Western democracies with a presidential form of government.

The country has a multi-party political system. The main religions in the country are Orthodox Christianity and Islam. The official languages ​​are Greek and Turkish. English, French and German are also widely spoken. 30 direct flights connect Cyprus with most countries in Europe and the Middle East, in turn providing connections with the whole world. Modern international airports are located in Larnaca and Paphos. Limassol and Larnaca are seaports. There are also yacht harbors here. Bus transport connects the main cities of Cyprus. Several major tour companies organize bus excursions throughout the island in modern, air-conditioned buses.

Climate of Cyprus subtropical Mediterranean with many sunny days throughout the year. Summers are hot and dry, and winters are mild and rainy. The average daily temperature from June to September is +32 ° C, from October to November +25 ° C, from December to February +16 ° C. There are no large rivers or lakes in Cyprus. The climate in Cyprus is uniform throughout the year. The Cypriot winter is very short and mild. The climate is moderate, with plenty of sunny days throughout the year. Winter is very short and mild, the average temperature is from +17 to +19 °C, and in the highlands in winter the thermometer drops several degrees below zero and snow falls. Summer is hot, lasting from mid-May to mid-October. During this period, the temperature can rise to +35 °C in the shade, but due to low humidity the heat is easily tolerated.

Offshore financial crisis in Cyprus

The debt, financial, budgetary and economic crisis of the Republic of Cyprus in March 2013 led to the paralysis of the country's banking system and plunged its economy into a pre-default state. On the night of March 25, 2013, the Eurogroup lifted the threat of an unregulated default of the Republic of Cyprus. The causes of the crisis were:

A strong tilt of the economy towards the offshore sector (emphasis on banking - the amount of deposits in the country's banks is approximately 835% of GDP (the European average is 354%), the assets of the troubled banking sector amount to 458% of GDP.

Unsuccessful investments by Cypriot banks in Greek debt - since the beginning of 2012, many Cypriot banks have suffered losses due to large write-downs on Greek bonds (the write-down of which resulted in the Cypriot banking sector losing 81% of its total investments, which is in excess of €4 billion or 24% of GDP); also an increase in the share of non-repayment of loans from private individuals.

The bursting of the financial bubble in the speculative real estate market within the country, in which Cypriot banks invested excess capital.

Gradual loss of the country's price competitiveness as a result of a massive influx of capital. Even before Cyprus joined the Eurozone, the current account deficit reached 15% of annual GDP.

Failure of the government to reimburse government expenses.

The general weakening of the economies of the EU countries, the Eurozone, especially the so-called countries of the European periphery after the global financial crisis of 2008, from which many of them were never able to recover and with which Cyprus continues to be linked within the framework of a single currency, common labor markets and trade ( This primarily concerns Greece, whose economy has been shrinking since 2008).

Cyprus joined the eurozone on January 1, 2008. Due to the deterioration of macroeconomic indicators in the world, a gradual deterioration of economic indicators began in the economy of the Greek part of the island, which coincided with the deterioration of economic indicators in other countries on the periphery of the euro area. At the same time, bank interest on deposits in Cyprus (+4.45%) is several times higher than interest rates in the same currency in Germany (+1.5%). These high interest rates were paid mostly at the expense of new depositors, that is, there was a financial pyramid. These and other problems brought the republic's economy closer to collapse, and the country faced the need to receive financial assistance from international creditors.

Since mid-2012, the Cypriot authorities began to ask the Eurotroika to provide financial assistance in the amount of 17 billion euros (Financial Times writes about 16.7 billion euros), but the Troika is ready to provide Cyprus with only 10 billion, and the government of Cyprus was asked to find the remaining amount within the country by increasing taxes and fees. Disputes about how to raise these funds for the national anti-crisis plan led to a crisis, which was expressed primarily in the freezing of bank accounts within the country.

On the other hand, on November 6, 2012, Der Spiegel distributed a secret report from the German Federal Intelligence Service, which indicates that financial assistance from the European Union will be useful to “Russian oligarchs” who keep $26 billion in Cypriot bank accounts.

A two-day EU summit took place on 14-15 March 2013, at which a positive economic study was presented. Politicians did not consider the issue of providing financial assistance to Cyprus.

On Saturday 16 March 2013, at the next meeting of the Eurogroup, it was decided to introduce a one-time tax on all bank deposits in the country as a prerequisite for receiving assistance.

On the same day, all banks in the country suspended their activities, electronic transfers were also not made, and all cash in Poland was removed from ATMs. To maintain the standard of living of its military and diplomatic staff, Great Britain sent a plane with cash on board to Cyprus. The ban on transactions with clients did not affect only branches of Cypriot banks outside Cyprus. Despite the proposal of the German Merkel government, which called on the Cypriot government to actually expropriate part of the bank deposits, the Cypriot parliament rejected this proposal (36 deputies voted against, 19 abstained).

After Plan A was rejected, signs of a crisis began to appear more and more clearly in the republic, including at the everyday level. By Thursday (March 21), an acute shortage of cash began to be felt in the country's market, as a result of which gas stations gradually began to close, unable to pay for gasoline. The banks were scheduled to open on Tuesday 26 March. Until the same date, the Cyprus Stock Exchange also remains closed.

The second round of negotiations between the Cypriot delegation and the Russian government on the restructuring of old loans and obtaining new ones ended in failure in Moscow on March 21, 2013.

Meanwhile, street protests and mass demonstrations began in Cyprus against the actions of the Eurotroika and the head of the German Government.

On March 22, European Commission President Barroso, at a press conference in Moscow, expressed his confidence that a positive solution for Cyprus will be found.

On March 23, a new expropriation plan emerged: 20% will be withdrawn from accounts with more than 100,000 euros. In addition, 4% will be withdrawn from all uninsured accounts in 26 banks in Cyprus, including branches of foreign banks in Cyprus.

On March 24, 2013, President of Cyprus Nicos Anastasiades announced the final anti-crisis plan after negotiations with the European troika. According to it, deposits of less than 100 thousand euros will not be taxed. Also, the losses of large depositors will vary depending on which bank their deposits were placed with. In addition, the country's largest bank, Bank of Cyprus, will be restructured, and the country's second largest bank, Cyprus Popular Bank, operating under the Laiki Bank brand, will be liquidated. The losses of its investors, as well as the size of layoffs, have not yet been determined. Capital controls will remain in place. Although the initial total volume of the national anti-crisis plan was 5.8 billion euros, it is expected that, taking into account revenues from an increase in corporate income tax from 10% to 12.5%, as well as from the introduction of a tax on interest income on bank deposits, it will be able to reach the ultimately required value of 7 billion euros. However, the country's Parliament must approve this plan for it to come into force. Experts view restrictions on capital movements as an actual exit from the eurozone, and bank holidays and the inability to withdraw deposits as an actual default.

On March 26, 2013, the Minister of Finance of Cyprus, Michalis Sarris, made a statement according to which losses of uninsured deposits could reach 40%. On March 25, 2013, information appeared in the world media that the outflow of capital from the banking system of Cyprus did not stop even during the closure of banks. Thus, on the morning of March 26, the external manager of the Bank of Cyprus, Andreas Artemis, resigned. He is suspected of organizing gray schemes to withdraw money from the island through branches of the main banks of Cyprus, which were not closed in London and which were not subject to withdrawal restrictions. Another possible channel for withdrawing money ran through the Russian Uniastrum Bank, 80% of whose shares belong to the Bank of Cyprus and in respect of which no withdrawal restrictions were also introduced. A representative of the Central Bank of Cyprus said that after almost two weeks of freezing (March 16-27), Cyprus banks will resume operations on Thursday, March 28 at 09:00 (11:00 Moscow time). At the same time, customer service on this day was carried out from 12:00 to 18:00 hours (14:00-20:00 Moscow time). Restrictions on the export of capital from the country continue to remain in place. So, within a week after the opening of banks, max. the amount of money transfers abroad should not exceed 5 thousand euros per month per person and per bank. Non-residents will be able to take out no more than 3,000 euros.

On March 27, a special flight from Frankfurt am Main to Larnaca, Cyprus brought 5 billion freshly printed Euro banknotes to meet the country's demand for cash.

On 28 March 2013, the head of Cyprus's second largest bank, Laiki, Takis Fidias resigned, following the example of his Bank of Cyprus colleague who had resigned two days earlier.

It is expected that this crisis will have some consequences both for the economy of the country itself and the world as a whole. However, the opinions of various parties differ in assessing the severity and severity of these consequences. Firstly, in the pre-crisis months, some capital had already left the country, and after the opening of banks, a massive outflow of offshore capital is again expected, as well as a cessation of their inflow in the future (deoffshorization economy). The latter is explained by the fact that tax rates in the countries of origin of capital, from which the holders of Cypriot accounts tried to hide, ultimately turned out to be lower than the expropriation rates in Cyprus, to which significant risks of uncertainty should be added. The restructuring of banks will lead to the virtual liquidation of the banking sector as one of the two pillars (along with tourism) of the economy of the modern Republic of Cyprus, an increase in unemployment due to laid-off bank employees, mass emigration of the working population and an estimated reduction in GDP by 10% in 2013.

The Cypriot government's attempt to introduce a tax on deposits has created a dangerous precedent, which, given the gradual deterioration of economic and financial indicators in countries of the European periphery, may lead to the spread of a similar scenario to other countries in Southern Europe. In addition, the crisis in Cyprus may negatively affect the flow of foreign direct investment into the Russian economy. Before the crisis, capital from Cyprus accounted for 23-25% of the flow of foreign direct investment into Russia. In fact, these were reinvestments of Russian citizens with accounts in Cyprus, and not the money of the Cypriots themselves. After Russian money gets stuck in Cyprus, the flow of reinvestment will stop until new reinvestment structures emerge. The crisis in Cyprus has already led to the fact that on March 28, 2013, the euro exchange rate dropped to a 5-month low against the ruble.

Due to the pre-default state of many Eurozone countries, the share of the euro in the basket of world foreign exchange reserves decreased from 31% (in 2009) to 24%, returning to the 2002 level. It is expected that the sale of Euro-denominated reserves will continue under the influence of the Cyprus crisis. To overcome the financial crisis, the government of Cyprus plans to develop recently discovered gas fields on the island's shelf, shares in which were offered to Russian companies during negotiations in Moscow. However, the TRNC and Turkey plan to challenge any individual initiatives of the Greek Cypriot side in this direction.

After blocking individual accounts, Cyprus actually left the Eurozone. From an economic point of view, due to restrictions on the movement of capital, the euro in circulation in Cyprus is no longer identical to the pan-European currency of those countries where monetary mobility has been preserved. This factor will help reduce the investment attractiveness of Cyprus in the future.

Alternative versions of the offshore crisis events in Cyprus

Based on materials from the article by Nikolai Starikov “Cyprus - what is really happening”: The attention of the whole world is focused on a small island in the Mediterranean Sea. Cypriot legislators, on the advice of friends and partners from the European Union, first decided to take away part of the deposits in Cypriot banks, then changed their minds. Not only the banking system of Cyprus, but the entire economy of the country was hanging by a thread. What is the problem with the Cypriot banking system? She is not unique. The entire Western economy, the entire Western financial system is sick with the same thing - living in debt, living beyond your means. They are all bankrupt - just to varying degrees. And among them there are bankrupts who have the main thing - in the hands of these bankers there is a “typewriter” that creates money out of thin air. Therefore, the constant influx of new loans created from this very air maintains the viability of the system. And there are small countries, small banks - which do not have a “typewriter”.

One of the main pillars of the current financially oriented world is the inviolability of private property in all its forms. Including the inviolability and guarantee of funds in banks. And so the Cypriot financial system and the whole of Cyprus felt the difficulties inherent in the WHOLE SYSTEM. Europe is ready to help Cyprus too. But one of the conditions for the allocation of approximately 10 billion euros is, in fact, the expropriation (nationalization) of some of the deposits in Cypriot banks. It is obvious that such actions will undermine not only the financial system of Cyprus, but will also lead to the erosion of trust in the entire financial system. It is obvious that the amount for which Cyprus should allegedly adopt the methods of the Bolsheviks is insignificant. This is approximately 6 billion euros. To make it easier to understand the insignificance of this amount: Abramovich’s two yachts or one tunnel, which is being built today in New York, cost the same. It's not money, it's nothing. Of course, by the standards of the state or the global financial system.

And for the sake of such a trifle, the European Union, the IMF and the entire “civilized world” invite Cypriots to violate the right to inviolability of private property. Strange? Very. If we assume that the goal is “stabilization of the financial system.” If you understand your goals correctly, everything will fall into place. Wars and revolutions are designed to save the dollar. That is, the current financial system. She needs cataclysms and catastrophes to smoothly lower the level of consumption around the world. The golden billion cannot be fed. Therefore, we need “silver” 500 million, and another 500 million “bronze”. The suicidal “proposal” to Cyprus to take away money from investors is nothing more than a desire to trigger a new global crisis. Remember when we were told that the crisis of 2008 began because of one unemployed black man who did not pay his mortgage? What will happen if the financial system of an entire island collapses? And what will collapse is clear in advance - money will flee from Cyprus, then from Greece, then from Europe. The situation with Cyprus is unique - too many interests are intertwined in one ball. Different, sometimes opposite.

1. The USA needs a new world crisis. Since it is impossible to organize it by military methods (they are stuck in Syria, no one else wants to fight either), we have to go, as Vladimir Ilyich Lenin would say, “to go the other way.” As a result of the collapse of the financial system of Cyprus, the United States plans to weaken the European Union and destabilize world finances. And this always leads to an increase in demand for American debt securities. Any instability is a benefit for the US government debt pyramid; it is an influx of new investors. There will not only be a flight from the euro, there will also be a flight of money to US banks. After all, this is an island of stability - only no one will take money there.

2. The European Union (Germany) needs a crisis in order, on the one hand, to accuse the world hegemon of being unable to “rule the world,” and on the other, to reset the principles of the European Union. Small countries with their selfishness have taken the situation to the extreme - how long can this be tolerated? It's time to put things in order. Let decisions be made in Brussels, not in Nicosia or Tallinn. We need a new, strictly regulated European Union. United States of Europe. As a result, with greater independence from the United States of America.

3. Cyprus understands perfectly well what is going on, and that its well-being has become a pawn in a big game. Then he resists. And seeks salvation. Who offers it?

No one except Russia. Only Russia came out with a sharp condemnation of what, in theory, all world democrats should vehemently denounce. But the Democrats are silent, as if they had taken too much water. The United States is silent, the European Union offers pure Bolshevism, which is supported by all world-class financial institutions led by the IMF. To understand the absurdity of such a decision, imagine that in 1998 Russia would have decided to help itself avoid default in this way? What would the IMF and human rights activists say? Did you support? Russia is not the only force that is disadvantaged by the crisis. Russia is the only one who can play on this field. A small crisis would even be beneficial for China and, among other things, China plays in Africa and Asia. Europe is our area of ​​responsibility. The crisis is not beneficial for Russia: this is a fall in oil prices, this is the depreciation of about 45% of our gold and foreign exchange reserves, at the time of rearmament of the army. We need peace and stability. And we are against the crisis. And therefore, only the Kremlin at this moment offers help to Cyprus. The Cypriots are seizing on it - this gives them room for maneuver and the opportunity to postpone the terrible decision for a few days. What do we offer? Give 6 billion in exchange for the right to extract gas. Europe's reaction is very mild - Merkel only “asks” not to discuss solving problems with Russia. The Americans are generally silent, amazed at the impudence of Russia’s actions. The Kremlin's demarche means movement across the entire plan of the powers that be. For just 6 billion, Russia can “buy” Cyprus. Washington already sees a Russian base on the island, next to the base of its “British colleagues.”

It is impossible to refuse the Russians without an alternative solution. You can’t say, don’t take Russian money, just rob your investors, lose their trust and destroy your country. We will have to look for a soft solution - to give money to Cyprus in one form or another, just so that they do not get involved with the Russians. It is important for us to remember: Russia is not allowing a global crisis to start. What about the talk about “Russian money” in Cyprus? What role did this money play in the adoption of our country’s behavior strategy? The West chose Cyprus for two reasons - firstly, it is small and peripheral, and secondly, the deposits there are indeed largely non-European. This means there will be few victims (and there will be few dissatisfied ones) within the West. The presence of “Russian money” in Cyprus made it possible for Putin to consolidate the elite. Patriots already understand everything. Liberals understand only through the wallet. Have you ever seen government liberals denounce the West with such frenzy? But if there were no money in Cyprus, the Kremlin would still have made such a beautiful move. Let's be realistic - no one will give Cyprus to us, but the world elite is split, and this split is only growing. Here are just two signals that one part sent to the other (pro-American) during the “Cyprus crisis”.

Another version of the unprecedented financial crisis in Cyprus is that the crisis has geopolitical rather than economic roots. Germany (and the United States), using the Eurogroup and the eurozone as a supporting mechanism, are desperate to gain control of the rich gas reserves discovered off the coast of Cyprus. Control of energy resources is what is at stake here. Therefore, the will of Cyprus and the political system of Cyprus must be completely controlled, and the way to do this is to impose huge debts on the economy and the country for the next twenty to thirty years. An integral part of this strategy is to exclude or minimize Russian influence on the island. This is why the Eurogroup (ie Germany and the United States) is pushing for deposits or funds belonging to Russians to leave the island. The fact that Russian businessmen prefer Cyprus as a safe place to park their money and run their businesses is anathema to Germany. The goal is to remove any Russian influence from Cyprus and control the Cypriot economy and thus its energy resources in the coming years.

Russian communities in offshore territory in Cyprus

Given the almost thousand-year history of Russian-Cypriot ties, the fact that the Russian-speaking community appeared on the island relatively recently is surprising. However, this is true: only in recent years have significant groups of Russian speakers formed in Cyprus and a full-fledged Russian diaspora has been formed. Today, the Russian-speaking community of Cyprus numbers, according to various sources, from 20 to 50 thousand people, most of whom live in the cities of Nicosia, Larnaca, Paphos and Limassol. The latter has the largest Russian-speaking community, about 10 thousand people.

At the same time, today the Russian diaspora in Cyprus has a high degree of institutionalization: there are several large organizations of Russian compatriots on the island, Russian-language magazines are published, there are radio programs and TV channels in Russian. As mentioned above, the oldest organization of compatriots in Cyprus is the USSR-Cyprus Friendship Society (now the Russia-Cyprus Friendship Society), created back in the mid-1960s. For more than twenty years, the cultural and educational society of compatriots “Romashka” has been functioning, formed in the second half of the 1980s on the basis of a small circle of Soviet citizens who were permanently residing in Cyprus, with the aim of providing assistance in the adaptation of compatriots. Large Russian-speaking organizations on the island are the Association of Russian-Speaking Residents of Cyprus “Horizon”, “Russian Society” of Larnaca, etc.

It is worth noting the Russian Orthodox Educational Center - the only charitable Russian-Cypriot Orthodox organization created with the blessing of the Cypriot Orthodox Church with the spiritual support of the Moscow Patriarchate. The number of Russian speakers in Cyprus is up to 40 thousand. The percentage of Russian-speaking people living illegally is 25-30%. What part of the Russian-speaking population has Cypriot citizenship? - 10-15%. What part of the Russian-speaking population has Russian citizenship? 60%. What part of the Russian-speaking population speaks the state language at a level sufficient to work and understand the mass media? - 15-20%. What part of Russian-speaking immigrants of the first generation purposefully tries to assimilate (does not communicate with compatriots, switches to the local language at home, does not use Russian-language sources of information)? - 5-10%. How many Russian-language newspapers and magazines are published? 3 newspapers, 7 magazines.

History of the State of Cyprus

The prehistoric period of Cyprus begins with the appearance of the first traces of man on the island, dating, according to the latest data, to the 10th millennium BC. e., and ends at the junction of the 2nd and 1st millennia BC. e., with the beginning of socio-political processes that led to the creation of the Cypriot kingdoms in the historical period. The history of Cyprus dates back to the Neolithic era, unlike Greece, where remains of human presence have been found since the Paleolithic period. Cyprus has always been an integral part of Hellenism. Hellenistic culture reached the island immediately after the Trojan War, when the Achaeans landed on the island and assimilated the autochthons, the so-called “etheo-Cypriots”. Since then, the island has been inhabited by Greeks.

The advantageous strategic position of Cyprus in the Mediterranean Sea contributed to the fact that during its history it changed hands more than once, remaining on the periphery of various empires. In 58 the province of Cyprus was formed. Having become part of Byzantium in 395, the theme of Cyprus was created in 965; in 1191 it was captured by the crusading troops of Richard the Lionheart during the Third Crusade, becoming the Kingdom of Cyprus. Already in 1192, the island was transferred to the French crusader Guy de Lusignan, who founded the Lusignan dynasty in the Kingdom of Cyprus.

In 1489, the last queen of Cyprus, Caterina Cornaro, handed over the island to the Venetian Republic, which was already defeated by the Turks in 1571. Ottoman rule in Cyprus continued until 1878. In 1878, the Cyprus Convention of 1878 was concluded between the British Empire and Turkey, a secret Anglo-Turkish treaty on a “defensive alliance” directed against Russia. The treaty was signed on June 4, 1878 in Istanbul before the opening of the 1878 Berlin Congress. Great Britain pledged to help the Ottoman Empire “by force of arms” if Russia, having retained Batum, Ardahan and Kars, tried to acquire new territories in Asia Minor. In exchange, Türkiye agreed to the British occupation of the island of Cyprus. The convention was annulled by the British on November 5, 1914 due to Turkey's entry into World War I on the side of Germany and the annexation of Cyprus by Great Britain.

As a result of many years of national liberation struggle, the island gained independence in 1960, soon becoming an arena of clashes between the Greek and Turkish communities. In 1974, the island was actually divided into 2 parts. About 60% of the island's territory belongs to the Greek sector of the Republic of Cyprus, about 38% to the Turkish Republic of Northern Cyprus and 2% to the United Kingdom (military bases).

Sources and links

legalinsight.ru - legal magazine Legal insight

ru.wikipedia.org – free encyclopedia Wikipedia

youtube.com - YouTube video hosting

images.yandex.ua - Yandex pictures

google.com.ua - Google images

newscyprus.net - All about life in Cyprus

offshor.info - encyclopedia and directory of offshore companies

offshore-sfi.com - Suntiger International website

eltoma-offshore.com - Eltoma Holdings Limited, registration of offshore companies

russian-world.info - Russian-speaking world project

vedomosti.ru - Electronic periodical "Vedomosti"

nstarikov.ru - blog of Nikolay Starakov

oko-planet.su - eye of the planet, a portal for studying global changes in society

fbs-offshore.com - website of the Finance Business Service company

Cyprus - unique opportunities for work and stay in Europe

Registration of a company in Cyprus allows you to enjoy reduced taxation when operating in the jurisdiction of the European Union

Reputational benefits for doing business in Cyprus are obvious: the country is part of the EU, so companies registered there are of European origin, and they are not offshore companies, which means they are excluded from the blacklist. This is what opens up opportunities for cooperation with European counterparties, as well as duty-free import of goods into the EU.

Registration of a company in Cyprus allows you to conduct business and investment activities with more than 50 countries in Europe, Asia and Africa, with which the Republic of Cyprus has concluded agreements on the avoidance of double taxation, including Russia.

Cyprus is a low tax jurisdiction with a corporate tax of 12.5%, which is considered one of the lowest tax rates in Europe (20-30% EU average). A resident company must pay local taxes only. The VAT rate is 19%, which can be avoided if the recipients of goods and services are not residents of the EU, and also if the services were not provided in Cyprus.

For residents, income from the purchase/sale of securities, interest, dividend income and royalties, profits from transactions with real estate located outside Cyprus, income from any foreign branches, subsidiaries, etc. are taxed at a zero rate.

Provided that all business activities and sources of income are conducted outside of Cyprus, a non-resident company has the opportunity not to pay taxes. For non-residents there are also no taxes on dividend payments, interest, income, royalties, or financial gains. However, firstly, such a company cannot take advantage of double taxation, and, secondly, it will be faced with the need to prove substance (actual residence) outside Cyprus.

A Cyprus company can become the founder of subsidiaries in Russia or European countries. Income received in the form of dividends by a Cypriot company from a Russian subsidiary will be taxed at a rate of 5 or 10 percent.

Confidentiality of doing business is respected in Cyprus. Due to the fact that Cypriot companies operate under English law, nominee service is officially permitted.

Registration of a company in Cyprus requires an authorized capital of at least 1,000 EUR (the authorized capital is declared, there is no need to pay for it). The minimum value of one share is 1 EUR. The minimum number of shareholders for registration of a Cyprus company is one, individual or legal entity. The company name must be approved by the local registrar.

West Union can act as the secretary of the newly created company, since it has its own office in Nicosia, the capital of the Republic of Cyprus (the secretary must be a resident of Cyprus and have the appropriate licenses to provide this service). The simplified procedure for registering a company allows you to go through this process quickly, especially taking into account the removal of all legal registration issues when contacting West Union. Consulting support when contacting the office includes resolving issues regarding company registration, private banking, audit, and tax planning. West Union also has the opportunity to offer to purchase an existing company. If necessary, clients can use the service of redomiciliation of a company from another jurisdiction (BVI, Belize, Seychelles, Panama, etc.), that is, transfer of a ready-made company to the jurisdiction of Cyprus.

The most popular form of company registration form in Cyprus isLTD (limited liability company). Cypriot businesses are often used in the financial sector (investment holding companies, insurance, financing, leasing), including securities trading. Also, opening a Cyprus company is useful when conducting international trade, transactions with real estate abroad and its ownership, e-commerce, foreign economic activity, and cargo leasing.

Creating a new company takes about two to three weeks, and there is no need to visit the country in person. Together with the company, you can open both a corporate and personal bank account, which can be used remotely through online banking. There are no currency controls in the country, and it is possible to pay on behalf of the company in any currency with which the bank works.

To maintain the activities of a Cyprus company, it is necessary to maintain accounting records, annually submit audit reports, income statements and financial statements to government authorities. If the need arises, the closure of the company is carried out with the passage of a minimum number of bureaucratic procedures, and the company can be restored to the commercial register within 20 years.

Registration of a company in the Cypriot jurisdiction can also be considered to obtain “economic citizenship”, since direct investment in the country’s economy allows foreign citizens to undergo an accelerated naturalization procedure. The condition for obtaining an EU citizen passport and the right to visa-free visits to 150 countries is an investment in the Cyprus economy of €500,000.

In addition, in Cyprus, the so-called non-dom status is actively used for foreign entrepreneurs, which provides for conditions of stay of at least 60 days in Cyprus, taking into account the conduct of business or employment in a local company, and provides foreigners with tax residency in Cyprus, which exempts them from tax on dividends, on interest on bank deposits, on the sale of securities, and other tax benefits. At the same time, residents of Cyprus who fall under non-dom status are exempt from paying the above taxes, regardless of the country where the income was received.

We hope that the information presented will be useful to you and wish you and your business success.

Cyprus is an island country that is known throughout the world for its specific approach to taxation. Until relatively recently, Cyprus led. After joining the European Union in 2012, the government of the country had to change the laws somewhat, but this did not reduce the attractiveness of the island as a quiet “tax haven”. Therefore, today it is difficult to answer the question unambiguously, or not, since this country no longer fully meets the classical canons of zones with liberal taxation.

A little about Cyprus

Cyprus is a European state that occupies the territory of the island of the same name in the Mediterranean Sea. The capital of the country is the city of Nicosia. Currency – euro. The official languages ​​are Greek and Turkish; in business, English predominates.

The territory of the island is divided into two parts: one is controlled by the Greeks, the second by the Turks. The President and Parliament are elected for 5 years. Most current laws are based on British law or are simply translations of them.

The absence of its own minerals has contributed to the development of the financial sector of the economy on the island: the government of Cyprus is actively promoting the development of small businesses, banking institutions, and tourism.

Advantages of the region

When registering a business in Cyprus, founders receive certain benefits:

• the country has had a positive image of a “tax haven” for many years and is trying to maintain its position at a high level;
• high prestige of the territory, which is not questioned;
• Cyprus has signed treaties on the abolition of double taxation with more than 40 countries (including Russia);
• enough ;
• low level of taxation, the possibility in a group of companies of reducing the income of one company at the expense of losses of another;
• receipt of dividends does not involve the payment of taxes;
• all non-residents, if desired, can obtain a special tax number (VAT), which will give them the opportunity to carry out trading operations in the European Union;
• It is beneficial for non-residents to register an inheritance through Cypriot companies, since in this case it is not subject to taxes;
• use of nominee service;
• high level of confidentiality.

Key points of registering a company in Cyprus

Every company that is established in Cyprus must meet the following requirements:

• type of company – Limited (joint stock companies with limited liability);
• The head of the company is at least one individual or legal entity. To reduce the level of taxation, it is recommended to register a resident of Cyprus for the position of director;
• number of shareholders – at least two; beneficiaries can be both firms and citizens.
• amount of capital: declared minimum 2000 euros, actually paid – 4 euros;
• the company must have a legal address and a registered agent;
• You cannot use in the name of a company names that have a generally accepted meaning indicating the specialization of a legal entity - Bank, Assurance, Fund, Trust, Deposit, etc. As a name of a company, it is also prohibited to use the names of companies that already exist, are consonant with well-known trademarks, are related to religion, imply the names of countries or geographical territories. The name is checked during creation by the registrar and his final decision determines whether the name will pass the test or not;
• the name of the organization must contain the word Limited or Ltd;
• Every year the company must pay a state fee of 350 euros;
• every year an audit must be carried out and financial statements must be submitted to the Registration Chamber, tax reporting to the tax office;
• A meeting of directors must take place annually, but it can be held formally through the use of a nominee service.

Features of taxation

So is Cyprus an offshore zone? This country now does not meet the classical principles of territory.

The state has a differentiated approach to calculating payments to the budget. The amount of tax depends mainly on the residence of the founders.

The amount of contributions to the Cyprus treasury from the profits of resident companies is calculated at a rate of 10%, which is currently the lowest in Europe.

In order to stimulate the development of certain sectors of the economy, the government of the country also established a zero rate for enterprises engaged in the field of insurance, shipping, transactions with intellectual property, as well as for the activities of actors, famous personalities, and athletes.

In addition, in Cyprus the following are completely exempt from taxation:

• income received in the form of dividends, regardless of the country of their source;
• income from transactions with securities;
• 50% of the received passive interest income. Active interest income is fully taken into account when calculating taxes. This income means profit from the main activities of the company;
• profit that a company receives from operating its activities abroad.

Considering the low tax rate, the high level of confidentiality during financial transactions and the possibility of using a nominee service, many businessmen continue to think that Cyprus is an offshore zone; but the Russian government excluded this country from the list of offshore companies.

What are offshore companies and how to work with them: Video