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Cyprus Company, The

Cyprus Companies | How corporations can take advantage (Part 2)

Cyprus Companies - How corporations can take advantage (Part 2)

Cyprus Companies: How corporations can take advantage (Part 2)

There are many ways a corporation can take advantage of the benefits of a Cyprus company:

  • Royalty, Patent & Trademark Companies: Cyprus companies provide for Royalty routing as it has low withholding taxes for royalties. The Intellectual property, royalties, and licensing rights and fees can be assigned or owned by Cyprus company. The Cyprus company then has a license or agreement with other companies interested in exploiting these rights. By doing this, the overall tax burden is removed, there is tax deduction on royalty payments, effective tax depreciation of investments in intellectual property, Neutral VAT treatment, strong protection of intellectual property rights by legislation from Cyprus in international agreements…etc.
  • Construction and Engineering: Through the use of double tax treaties, international construction and engineering companies may avoid paying tax in a treaty country as long as the project does not exceed the duration specified in the tax treaty. If we take a look at the example of Russia, the double tax treaty allows for a long project duration before a permanent establishment obligation is born.
  • Employment companies: Through the use of double tax treaties, expatriates on short assignments are treaty protected if employed through Cyprus, they are entitled to tax exemption in Cyprus and at the same time, they do not become tax resident in the area they are sent for their short assignment either. Also expatriates working for foreign companies, performing outside Cyprus, and paid through Cyprus employment company can benefit from tax free status.
  • Administration and Treasury Management: Companies can take advantage of the banking and administration infrastructure that Cyprus has to offer, combined with beneficial tax regime, local experts, and a location at the cross roads of major continents. Costs are also lower than other countries.
  • Real Estate: structuring of ownership through a Cyprus company can reduce capital gains, stamp duties, and inheritance taxes. Basically the beneficial owners (shareholders) that own the property can sell its shares instead of the property. In that way, the legal ownership has not changed so transfer and stamp duties are avoided. Gain on disposal on Cyprus company’s shares is tax exempt (unless property is in Cyprus).

These are just some more of the possibilities available with a Cyprus company. Take a look at our Cyprus company publications to learn more about its beneficial tax system, possible structures, and much more.