Cyprus: A Great Tax Haven and International Tax Planning Destination

theodion
May 25, 2012

A recent piece of research that has been conducted by KPMG has revealed that Cyprus is considered as one of the friendliest offshore tax havens located in Europe. Similar to Switzerland and Ireland, there is transparency in the tax structures of Cyprus. Also, it is one of the places that flaunt the highest percentage of locals that are glad with the tax legislation level.

International tax planning is an important strategy that limits a company’s tax liabilities in a legal manner. With it, investors and entrepreneurs are able to keep their assets and business safe. At the same time, it can also give them the opportunity to improve those assets and business. Cyprus is an excellent tax haven and an incredible destination for international tax planning.

Cyprus is a progressive country and it is considered a tax haven. It is a member of the European Union, and for this reason, it has strict rules and regulations when it comes to keeping the offshore financial sector protected. Cyprus is a popular tax haven all because it has a low tax regime that offshore companies as well as resident companies enjoy.

A company that is incorporated in Cyprus tax haven is called an International Business Company when all the owners are foreigners to Cyprus. A Cyprus company can be used as a trading company and a means for investment. For every company that is incorporated in the jurisdiction, they are subject to the same tax rate. All companies in Cyprus pay a corporate tax of 10%. There is also no wealth tax. When it comes to the payment of dividends, there is no withholding tax involved.

In Cyprus tax haven, offshore banking is one of the services that have made it popular all over the world. Offshore bank accounts can be established with several banking institutions in the country. In terms of the interests that are gained from the said offshore bank accounts, there are no taxes involved. Therefore, offshore bank accounts give way to investment.

Cyprus is considered a well regulated tax haven. Among the various tax havens in the world, privacy is one of the major features that are given importance. There is also a corresponding legislation that is meant to protect the privacy of those people who own international business companies, offshore bank accounts, and international trusts. There are bank secrecy laws in Cyprus tax haven, and they keep the integrity of the offshore bank accounts safe and protected. It is important to note that there are some laws that tend to prohibit and punish information disclosure in Cyprus. People that are involved or associated with Cyprus banks as well as the workers in the bank are all made to take an oath of secrecy. This is another requirement of the Central bank which promotes privacy.

Privacy is also given to Cyprus international business companies that depend upon the companies’ legislation of offshore Cyprus. The registration of the companies’ beneficial owners is not required to be filed to the Registrar of Companies and this is made possible by the company’s legislation. The incorporation of the companies with the use of nominating directors and shareholders is made possible by company legislation. The beneficial owners’ names will not be disclosed. However, if there is a need for investigation related to the offshore company’s operations, then in this case, the names will then be released.

It is also very beneficial that Cyprus tax haven has signed double tax treaties with several other countries which include France, United States, Canada, Denmark, Sweden, and many others. Also, there is no exchange control for offshore companies and trusts. With this, companies will be able to engage in trade in an easy way. Also, since there is no exchange control, Cyprus tax haven is really suitable when it come to the remittance and transfer of huge funds.

To sum everything up, Cyprus offers the most attractive conditions that are perfect for opening offshore bank accounts, establishing international trusts, and the incorporation of offshore companies. Individuals of any nationality have the capability of forming offshore bank accounts and companies. Although they have strict laws, they still give way to the establishment of offshore structures that are truly flexible. It is also perfect for international tax planning. Without a doubt, Cyprus tax haven gives investors the opportunity to reduce tax liabilities in a legitimate manner.