Cyprus enjoys a favorable tax system in line with the EU requirements and OECD principles. In order to qualify under the Cyprus Yacht Scheme the applicant must incorporate a Cyprus company and lease out the yacht through that company provided that the applicant satisfies the following requirements, instead of buying the yacht outright and paying the full VAT on the transaction, noting that the current VAT rate in Cyprus is 19%.
Requirements – Cyprus Yacht Scheme
A lease agreement must be concluded between a Cyprus company and an individual or legal person, whereby the lessee is granted the option to purchase the yacht at a...
Foreign companies which are incorporated and they are currently operating in a different jurisdiction can transfer their seat to Cyprus and at the same time companies established in Cyprus can relocate their seat abroad as per the provisions of the Companies Law, CAP 113. Following the re-domiciliation, foreign companies that redomicile their seat to Cyprus can continue to exist and operate under the laws of Cyprus and cease to exist under the jurisdiction of incorporation.
Foreign companies can redomicile for various reasons including among other to take advantage of the Cyprus favorable tax regime. Foreig...
Measures undertaken by the Registrar of Companies to assist Cyprus companies affected by COVID 19
Following the measures taken by the Cyprus government to support companies and businesses affected by the strict measures imposed to limit the spread of COVID-19, the Registrar of Companies announces the following measures:
1. The submission of due Annual Reports:
The publication process at the Official Gazette of the Republic of Cyprus following the three months' notice before the strike off of non-compliant companies is now suspended until January 2021.
2. Payment of the annual levy:
The deadline to pay the annual levy for 2020 is extended until 31st December...
CYSEC FINALISES THE INVESTMENT-BASED CROWDFUNDING RULES
The Cyprus Securities and Exchange Commission (the “CySEC”) has issued a Policy Statement setting out its finalised rules for investment-based crowdfunding which will be implemented by the way of a CySEC Directive due to be published in the official Gazette imminently.
Crowdfunding may constitute an alternative method to traditional financing via which small and medium enterprises (“SMEs”) can obtain access to financing through the issuance of transferrable securities such as shares or debt instruments. Any potential investors can access these investment opportunities through an internet-based elect...
Setting up an Electronic Money Institution in Cyprus
Licensing and supervision of Electronic Money Institutions
In Cyprus the provision of electronic payment services is regulated by the Provision and Use of Payment Services and Access to Payment Systems Law 31(I)/2018 of 2018 and the Electronic Money Law of 81(I)/2012 (the "Laws") as amended which transposed the EU Directive 2015/2366. The provision of electronic services in Cyprus can be provided by an Electronic Money Institution (the “EMI”) which has been granted an authorisation by the Central Bank of Cyprus (the “CBC”).
Electronic Payment Services:
1. Services enabling cash to be placed on a payment...
Following recent amendments to the Cyprus Companies Law, Cap. 113 (the “Law”), the Registrar of Companies has now introduced new provisions aiming in further modernising the current legislative framework which shall be effective from 18th December 2019 onward.
A. Late Filing Penalties
1. Annual Return
The Registrar of Companies will now impose an administrative fine for the late submission of the annual returns of each Cyprus of (i) €50; plus (ii) an additional charge of €1 for each day of delay for the first 6 months and thereafter €2 for each day of delay, up to a maximum of €500.
The Cyprus Tonnage Tax System – a useful tool for ship owners, managers and charterers
With the emergence of Cyprus as a leading maritime centre encompassing the full range of shipping related activities coupled with its attractive tax regime, we would like to remind clients of the benefits and importance of the Tonnage Tax System (the “TTS”) which was approved by the European Commission transposed into national legislation by the Merchant Shipping (Fees and Taxing Provisions) Law of 2010 (the “Law 44(I)/2010”).
Qualifying owners of Cyprus and foreign ships, charterers and ship managers who opted and are accepted to be taxed under the TTS are subject to...
The double tax treaty between Cyprus and Kazakhstan was signed in Nursultan, Kazakhstan on 15th of May 2019 (the “Treaty”).
The Treaty is based on the OECD Model Tax Convention, a model for countries concluding bilateral tax treaties, aiming in removing tax related barriers to cross border trade and investment by implementing provisions for the avoidance of double taxation on income and capital gains tax.
Main Provisions of the Treaty:
1. Dividend Income
If the ultimate beneficial owner of a company is a company – not a partnership (as defined under Cyprus law), and holds a direct shareholding of at least 10% of the iss...
On the 13th of February 2019, the Council of Ministers of the Republic of Cyprus approved the revised Cyprus Investment Programme (the “CIP”) with the aim to revise and include new due diligence procedures to strengthen the credibility of the CIP taking into account at the same time the concerns raised by the European Union. The new CIP aims to allow foreign high-net worth individuals and their family members to obtain the Cypriot Citizenship within a six month-period.
Changes to the CIP effective from 15th of May 2019:
The proposed investors will be required to make a mandatory donation of Euro 75,000...
The Cyprus Securities and Exchange Commission (the “CySEC”) has completed a review on the quality of the data which has been reported to Trade Repositories in accordance with Article 9(1) of the European Market Infrastructure Regulation (the “EMIR”).
Article 9(1) of EMIR states that “Counterparties and CCPs shall ensure that the details of any derivative contract they have concluded and of any modification or termination of the contract are reported to a trade repository registered in accordance with Article 55 or recognised in accordance with Article 77. The details shall be reported no later than the working day following the conclusion, modification...