Cyprus Company Types - Uses

It is no exaggeration to say that there are no activities that a Cyprus Entity is not suitable for. The most common activities of Cyprus’ Legal Entities, which are currently being used, are set out in a summary format below (the list of such activities is not exhaustive).

To discuss operations not covered here or to examine the structures in more detail, please contact us directly.

Uses By Corporations

The most common activities of Cyprus Legal Entities, which are currently being used, are set out below:

(The list of such activities is not exhaustive).

Please contact us directly to discuss any operations not covered in this section.

[Note: The resulting Cyprus profits or funds can either be accumulated in Cyprus to be reinvested within the group or be repatriated to any jurisdiction - in any form dividend, interest or royalty using income transformation methods - without any additional Cyprus tax or exchange restriction].

For more detailed information about the Uses of Cypriot Companies by Corporations, please either scroll down on this page (quicker) or use the main menu on the left.

Uses By Individuals

The most common activities of Cyprus Legal Entities that are currently being used are set out below:

(The list of such activities is not exhaustive).

Please contact us directly to discuss any operations not covered in this section.

For more detailed information about the Uses of Cypriot Companies by Individuals, please either scroll down on this page (quicker) or use the main menu on the left.

Non - Tax Uses of Cyprus Entities

In addition, a number of significant non-tax benefits that can be achieved from Cyprus Structures include:

  • Use of the "High Credibility EU Status" of Cyprus Entities in order to transact internationally. Examples:
  1. it is a well known fact that EU Service Providers are subject to significantly less stringent due diligence requirements by banks and other institutions and entities,
  2. EU VAT Registration and verifiability of company details on the EU VIES system are widely considered as a criterion of added commercial credibility.
  • Pre-immigration planning.
  • Hedging against currency fluctuations.
  • Reduction in securities transaction costs.
  • Exemption from exchange controls.
  • Deployment of expansion strategies.
  • Asset Protection and shielding from litigation.
  • Confidentiality in Business and Financial affairs (anonymity).
  • Estate planning.
  • Access to new sources of finance.
  • Improved investment returns.
  • Creation of an International Equity base.
  • Reduction in employee costs.
  • Easier repatriation of funds.

Cyprus Double Tax Treaties

A constructive use of the Cyprus Treaties’ Network has rendered considerable advantages to businesses and individuals who have chosen to establish legal entities in Cyprus. Tax treaties legally supersede local tax legislation and for this reason they are a useful tax-planning tool to protect businesses and individuals against double taxation of income earned in other countries.

Notes:

  1. The main purpose of these treaties is the avoidance of double taxation of income earned in any of these countries. Under these agreements, a credit is usually allowed against the tax levied by the country in which the tax payer resides for taxes levied in the other treaty country, and as a result the tax payer pays no more than the higher of the two rates (a number of the treaties also contain very beneficial "tax-sparing credits").
  2. The EU Parent Subsidiary and the Interest & Royalties Directives can be used to eliminate withholding taxes on payments of dividends, interest and royalties from or to EU Group Companies and the EU Merger Directive to eliminate the tax effects of EU Group reorganizations

DTT Table (Received in Cyprus) updated Jan ’06 - please scroll down

DTT Table (Paid from Cyprus) updated Jan ’06 - please scroll down

The full text of Cyprus’s Tax Treaties can be downloaded here:

Cyprus Tax Treaties

Cyprus - Austria

Cyprus - Macedonia

Cyprus - Austria Final Protocol

Cyprus - Malta

Cyprus - Belarus

Cyprus - Mauritius

Cyprus - Belgium

Cyprus - Moldova

Cyprus - Bulgaria

Cyprus - Montenegro

Cyprus - Bulgaria Final Protocol

Cyprus - People’s Republic of China

Cyprus - Canada

Cyprus - Poland

Cyprus - Croatia

Cyprus - Romania

Cyprus - Czechoslovakia

Cyprus - Russian Federation

Cyprus - Denmark

Cyprus - Serbia

Cyprus - Egypt

Cyprus - Singapore

Cyprus - France

Cyprus - Slovenia

Cyprus - France Final Protocol

Cyprus - South Africa

Cyprus - Germany

Cyprus - South Africa Final Protocol

Cyprus - Germany Final Protocol

Cyprus - Sweden

Cyprus - Greece

Cyprus - Syria

Cyprus - Hungary

Cyprus - Tajikistan

Cyprus - Hungary Final Protocol

Cyprus - Thailand

Cyprus - India

Cyprus - Thailand Final Protocol

Cyprus - Ireland

Cyprus - Turkmenistan

Cyprus - Italy

Cyprus - UK

Cyprus - Italy Final Protocol

Cyprus - USA

Cyprus - Kurkystan

Cyprus - Ukraine

Cyprus - Kuwait

Cyprus - Uzbekistan

Cyprus - Lebanon

 

(updated Jan 2006)

If you have difficulty in downloading the Tax Treaties, please contact us. We will send them to you.

1) Received in Cyprus*

Important Notes:

Full summaries, as well as the full text of the above treaties, are available (on request) from Our Offices.

* Possible use can be made of EU Directives to eliminate or reduce these rates - so rendering the treaty benefits is redundant. Treaties will be used where EU Directives are not applicable.

Received in Cyprus*
CountryDividends (%)Interest (%)Royalties (%)

Austria

10

 0

 0

Belarus

5/10/15 (5 if amount invested > 200.000 EURO irrespective of % of votes / 10 if at least 25% of share cap. / otherwise 15)

5

5

Belgium

10/15 if <25% of votes

10 / 0 if paid to public body

 0

Bulgaria

5 / 10 if received by a company owning < 25% of share cap.

7 / 0 if paid to or guaranteed by a public body

10 / does not apply if > 25% of cap. of Cypriot resident owned directly or indirectly by Bulgarian resident paying the royalties and the Cyprus company is subject to a preferential tax rate

Canada

15

15 / 0 if paid to the Government or for export guarantee

10 / 0 on literary, dramatic musical or artistic work with the exception of films used for television programs

China

10

10

10

CIS (Armenia, Kyrgyzstan, Moldova, Tajikistan, Uzbekistan, and Ukraine consider themselves bound by the treaty signed with the former USSR. The rates shown are those of the treaty Cyprus / USSR)

 0

 0

 0

Czech Republic

10

10 / 0 if paid to public body or financial institution

5 / 0 on literary, artistic or scientific work including films

Denmark

10/15 if < 25% of votes

10 / 0 if paid to Government or in connection to the sale on credit of any industrial, commercial or scientific equipment or any merchandise by one enterprise to another or in relation to any form of loan granted by a bank or guaranteed from Government or other State body

 0

Egypt

15

15

10

France

10/15 if < 10% of votes

10 / 0 if paid to Government or in connection to the sale on credit of any industrial, commercial or scientific equipment or any merchandise by one enterprise to another or in relation to any form of loan granted by a bank or guaranteed from Government or other State body

0/5 on films including films used for television programs

Germany

10/15 if <25% of votes

10/ 0 if paid to public body or financial institution

0 / 5 on films including films used for television programs

Greece

25 but local rate is NIL so 0%

10

0 / 5 on film royalties (except films shown on TV)

Hungary

5/15 if <25% of votes

10/ 0 if paid to public body or financial institution

 0

India

10/15 if <10% of votes

10/ 0 if paid to public body or financial institution

15 / 10 on payment of technical fees, management fees and consultancy fees

Ireland

0 / 5 on film royalties (except films shown on TV)

  0

  0

Italy

15

10

 0

Kuwait

10

10/ 0 if paid to public body or financial institution

5 / 0 on literary, artistic or scientific work including films

Lebanon

5

5 / 0 if paid to public body

 0

Malta

0 The treaty provides that the tax on gross dividends shall not exceed that chargeable on the profits out of which the dividend is paid

10/ 0 if paid to public body or financial institution

10

Mauritius

  0

  0

  0

Norway

5 / 0 if >50% of votes

  0

  0

Poland

10

10/ 0 if paid to public body or financial institution

5

Romania

10

10/ 0 if paid to public body or financial institution

5 / 0 on literary, artistic or scientific work including films

Russia

5 / 10 if received by a company which has invested < $100.000

  0

  0

Singapore

 0

10 / 7 if paid to a Bank or similar financial institution / 0 if to the Government

10

Slovakia

10

10/ 0 if paid to public body or financial institution

5 / 0 on literary, artistic or scientific work including films

South Africa

  0

  0

  0

Sweden

5/15 if <25% of votes

10/ 0 if paid to public body or financial institution

 0

Syria

0/15 if <25% of votes

10/ 0 if paid to public body or financial institution

15 / 10 on literary, dramatic, musical, artistic work, films and TV

Thailand

10

15 / 10 on interest received from financial institutions, on interest paid in connection with industrial, commercial, scientific equipment or the sale or merchandise between two companies

5 / 10 on right to use industrial, commercial or scientific experience / 15 on patents, trademarks, designs, models, plans, secret formulas or processes

United kingdom

15 but local UK tax provides for 0 - so 0%

10

0/5 on films including films used for television programs

United States of America

15 / 5 if more than 10% of votes

10 / 0 if paid to the Government or a bank or a fin. Inst. Or in respect to debt obligations arising in connection with sale of property or the provision of services

 0

Yugoslavia

10

10

10

2) Paid from Cyprus

Full summaries, as well as the full text of the above treaties, are available (on request) from Our Offices.

* Important Notes:

* Low or no withholding taxes on outgoing dividends, interest and royalties (no withholding tax on dividends and interest – therefore there is no columns included below - no withholding tax on royalty payments for use of the rights outside Cyprus, 10% if the rights will be used in Cyprus (subject to DTT & EU Directives) and 5% on films (subject to DTT & EU Directives).

* If the rates of Cyprus tax are lower than those provided by the relevant treaty, then the lower rates are applicable in favor of the taxpayer.

* Possible use can be made of EU Directives to eliminate or reduce these rates - so rendering the treaty benefits is redundant. Treaties will be used where EU Directives are not applicable No tax is withheld when the royalty is paid for use outside Cyprus.

Paid from Cyprus
CountryRoyalties*(%)

Austria

 0

Belarus

5

Belgium

 0

Bulgaria

10

Canada

10 / 0 on literary, dramatic musical or artistic work with the exception of films used for television programs

China

10

CIS (Armenia, Kyrgyzstan, Moldova, Tajikistan, Uzbekistan, and Ukraine consider themselves bound by the treaty signed with the former USSR. The rates shown are those of the treaty Cyprus / USSR)

 0

Czech Republic

5 / 0 on literary, artistic or scientific work including films

Denmark

 0

Egypt

10

France

0 /5 on films including films used for television programs

Germany

0 /5 on films including films used for television programs

Greece

0 /5 on film royalties (except films shown on TV)

India

15 / 10 on payment of technical fees, management fees and consultancy fees

Ireland

0 /5 on film royalties (except films shown on TV)

Italy

 0

Hungary

 0

Kuwait

5 / 0 on literary, artistic or scientific work including films

Lebanon

 0

Malta

10

Mauritius

 0

Norway

 0

Poland

5

Romania

5 / 0 on literary, artistic or scientific work including films

Russia

 0

Singapore

10

Slovakia

5 / 0 on literary, artistic or scientific work including films

South Africa

 0

Sweden

 0

Syria

15 / 10 on literary, dramatic, musical, artistic work, films and TV

Thailand

5 / 10 on right to use industrial, commercial or scientific experience / 15 on patents, trademarks, designs, models, plans, secret formulas or processes

United Kingdom

0/5 on films including films used for television programs

United Sates of America

 0

Yugoslavia

10

Countries without agreement

5/10

* No tax is withheld when the royalty is paid for use outside Cyprus

Full summaries, as well as the full text of the above treaties, are available (on request) from Our Offices.