Ships Registration in Cyprus

Located on the crossroads of three continents, Cyprus has emerged into a growing maritime centre. The island’s geographical location recently combined with a number of financial incentives by carefully designed government planning have made the Cyprus flag widely attractive amongst the key players in the shipping industry.

The Cyprus Registry currently ranks tenth in the world accommodating a 20 million tonnage merchant fleet & third in the European Union. Ship-management companies operating in Cyprus manage one fifth of the global third party managed fleet. An effect of this has been that shipping industry now amounts to 7% of the country’s GDP.

Ship-owning companies and ship-management companies can benefit from a number of significant advantages by provisionally, permanently or parallel registering under the Cyprus flag.

Cyprus is a major international shipping centre. Ships and vessels of any type or size, except for those listed below, may be registered in the Register of Cyprus Ships or the Special Book of Parallel Registration, given that they satisfy age-related and type-related requirements.

Ships and vessels that are NOT qualified for registration:

  1. At the time of the application for their registration, are banned on port State control by a country member of any one of the Memoranda of Understanding on port State control, from entering the ports of the Countries party to that memorandum or that have been disqualified by a State from entering its ports;
  2. Have been detained on port State control grounds on more than three times within two years period before the submission of application for registration by States of the Paris or the Tokyo or the Mediterranean Memoranda of Understanding on port State control or by the US Coast Guard;
  3. Have been constructed exclusively for the use on inland navigation or that are to be utilized exclusively on inland navigation, i.e. internal waters, rivers, inland waterways, canals, natural or artificial lakes, water reservoir or dams.

Setting up a Forex company in Cyprus

Cyprus is the leading country in the EU regulating the Forex market due to its numerous tax advantages, low set up and operational expenses along with the “passport effect” to offer services in all EU countries. It’s a well-known financial and banking centre for international investors, who wanted to take advantage of low taxes, political and economic stability, the flexibility and progressiveness of the common law system, legislation protecting privacy of information, excellent telecommunications and travel infrastructure, ideal geographic location at the crossroads of three continents, and the availability of well-trained professionals to manage their business and financial affairs. All the above make it an ideal location in the EU to set up a Forex company.

Foreign investors interested in investing in Cyprus can set up a forex company, which carries out activities on the local and international trading markets. A forex company provides assistance to other investors, by offering advice on investment opportunities in the forex market.

Forex trading companies are regulated by the Cyprus Securities and Exchange Commission (CySEC), under the CIFs and Investments Firms Law. To set up a Forex company a license is required by CYSEC and the process to obtain such a license involves several steps and conditions.

Share capital requirements vary depending on the type of investment firm and the services to be provided. A company that will only deal with portfolio management and offer investment advice, only requires a minimum share capital of 50.000 Euros. However, companies that operate a multilateral trading facility require a share capital of 730.000 Euros.

Our firm has experience of setting up a Forex Company in Cyprus. We prepare the special memorandum and articles of the company. We apply to the Registrar of Companies, firstly for approval of the company’s name, then for registration of the company, and then the CySEC application is prepared after collecting all necessary information from the shareholders. After examination and resolution of any issues, CySEC authorises the CIF and grants it a licence. The above procedure, from commencement to final approval by CySEC can be completed in about 5-6 months.

Alternative Investment Fund (AIF) in Cyprus

The enactment of the Alternative Investment Funds Law of 2014 (“AIF Law”) marked the beginning of a new era and strong opportunities for Cyprus in the fund industry. The new AIF Law came to harmonise the Cyprus legal framework with the European legislation in an attempt to enhance its competiveness and place the country as an important player in the field of alternative investment funds.

The new AIF Law provides for the requirements for the establishment of alternative investments funds (“AIFs”), their operation and supervision as well as setting the framework for the key persons involved in the management and operations of such funds.

The Law provides for two types of Alternative Investment Funds (AIFs), namely AIFs without limitations as to the number of investors and AIFs with limited number of persons. The choice of an AIF has a number of significant advantages:

  • No restrictions are imposed by the Regulator regarding the type of investments;
  • The application process is fairly simple and not particularly time consuming;
  • Subject to the approval of the Regulator, the AIFs can be self-managed;
  • AIFs can be set-up as umbrella funds with multiple compartments, allowing the management of different asset pools with separate investment policies;
  • AIFs without limitations as to the number of investors can be listed on Cyprus Stock Exchange and other recognized EU stock exchanges;
  • No withholding tax on dividend distributions and no taxation of capital gains;
  • The services provided by the Investment Manager of the fund are not subject to VAT;
  • The ‘‘Company’’ legal form of an AIF can take advantage of the double tax treaty network of Cyprus;
  • No onerous ongoing reporting requirements to the Regulator;
  • Low set up and maintenance costs.

Cyprus Investment Firms

Investment firms are regulated by the Cyprus Securities and Exchange Commission (CySEC), under the CIFs and Investments Firms Law.

Certain activities and services are regulated and can only be provided if a license is obtained. The term “investment firm” includes, amongst others, portfolio managers, broker companies, investment advisers, forex trading companies and binary options trading companies, which all fall under the definition of CIFs are regulated by CySEC.

For CySEC to grant CIF authorisation, a formal application procedure needs to be followed, and certain requirements must be met, the most important of which are stated below.

Capital Requirements

The minimum capital requirement for a CIF depends on the type of services offered:

  1. A CIF that holds clients’ money, and/or clients’ financial instruments, and provides one or more of the following investment services:
  • The reception and transmission of orders in relation to financial instruments;
  • The execution of orders on behalf of clients;
  • Portfolio management;
  • Provision of investment advice; must have an initial capital of at least €200.000.

 

  1. A CIF that provides the investment services stated in subsection (I) and (IV) above, and does not hold clients’ money and/or clients’ financial instruments, and as a result may not at any time place themselves in debt to their clients, may have an initial capital of €80.000, or at least €40.000, and professional indemnity insurance covering all EU member states, or some other comparable guarantee against liability arising from professional negligence, providing at least €1.000.000, for a single claim, and on aggregate, at least €1.500.000 per annum for all claims.
  1. A CIF that provides one or more of the following investment services and/or performs the following investment activities:
  • Dealing on own account;
  • Underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis;
  • Placing of financial instruments without a firm commitment basis; shall have an initial capital of at least €1.000.000

 

Other Requirements

  1. When applying for a license, a firm must provide, amongst other documents, a business plan, an operations manual (which should include the Anti-Money Laundering Procedures,) completed questionnaires from the members of the board, managers and shareholders.
  2. The Board of Directors of the CIF shall consist of at least two executive members and two independent non-executive members. The majority of the members shall be Cyprus residents.

 

Time Frame

Our law firm has experience of setting up a Cyprus Investment Firm. We assist our customers with the preparation of the special memorandum and articles of the company. We apply to the Registrar of Companies, firstly for approval of the company’s name, then for registration of the company, and then the CySEC application is prepared after collecting all necessary information from the shareholders. After examination and resolution of any issues, CySEC authorises the CIF and grants it a licence. The above procedure, from commencement to final approval by CySEC can be completed in about 5-6 months.

 

Taxes in Cyprus

  1. Profits from CIF’s activities

Corporation tax on net profit is 12,5%. However, gains from the sale of titles, and, in most cases, dividends received are exempt from tax.

 There is no withholding tax on dividend, interest and royalties paid to non-residents.

2. Capital Gains

Capital gains are not taxable in Cyprus except for the 20% tax on gains on immoveable property that is located in Cyprus, and on any gain from the sale of shares in companies that own immoveable property in Cyprus. All other gains of a capital nature are not taxable.

3. VAT

Value Added Tax issues can be very complex for a CIF, due to the fact that some of the services offered by the CIF could be taxable, and others exempt. We will be happy to provide advice on all VAT issues.

 

 

 

Cyprus Company Registration

In the increasingly competitive modern business market, companies must do everything they can to maximise their chances of success. Financial considerations in particular are more pertinent today than ever before, and with this in mind, many companies are turning to new ways of conducting business in order to give themselves a competitive advantage.

Thanks to its beneficial tax system, Cyprus is proving itself to be of the most popular jurisdictions for holding, trading and intermediary companies to conduct international business.

We’re here to help by enabling companies in numerous sectors enjoy the many benefits of establishing a business presence in the popular European country of Cyprus. Below, you’ll find lots of useful information on the advantages of registering a company in Cyprus, including who can benefit and how to do it.

Advantages of Cyprus Company Formation:

  • European jurisdiction;
  • Advantageous vehicle for International Tax Planning and use;
  • 0% tax on Dividends received (Dividends received by a Cyprus Company, on certain conditions, are free of tax making Cyprus the most competitive jurisdiction for holding companies);
  • 0% withholding tax on Dividend payments (Dividends payable by a Cyprus resident company to its foreign shareholders (whether a company or individual) are not subject to any withholding tax in Cyprus);
  • Full tax exception on the payment of dividends to its non-resident shareholders and has a real advantage over the other traditional holding jurisdictions;
  • No capital gains tax is paid on the transfer of immovable property owned by a Cyprus Company abroad (outside Cyprus);
  • 12, 5% Taxation for tax resident companies. (Starting from accounting period of 2014);
  • 0% Taxation for NON tax resident companies;
  • Double Tax Treaties (Cyprus has signed a considerable number of Double Taxation Treaties with various countries, to avoid the double taxation of income earned in any of the two contracting states);
  • A minimum of one director is required for a Cyprus company formation. Director can be of any nationality and need not be resident, but Cypriot advisable for purposes of tax residency corporate directors are permitted;
  • A minimum of one shareholder is required for a Cyprus company formation;
  • Nominee Shareholders and Nominee Directors Allowed.

The law in Cyprus emerges out of a unique legal system, based on the Anglo-Saxon system, namely common law and equity, in a combination with the Continental system. Accordingly, various European law directives, regulations and international treaties, the constitution of the Republic of Cyprus (the supreme law of Cyprus), the legislation (statutory law) and the judicial precedent (case law), constitute the main sources of law in Cyprus.

In view of the above, a company is governed by the Companies’ Law Cap. 113. The Companies’ Law, being the core statutory law for corporate law in Cyprus, is comprised of several, detailed sections governing a Private Company from its incorporation until its dissolution. The law is mandatory and controls the contents of the Memorandum and Articles of Association.

A company is also governed by its own Memorandum and Articles of Association, provided that these have been set in accordance to the various provisions, rights or restrictions, mentioned in Cap. 113.

The main difference between the two is in the following:

The Memorandum of Association, declares the purposes for which a company has been incorporated, for example trading and / or holding assets, while the authorised share capital, the issued share capital and the name of the company, followed by the word “Ltd” or “Limited”, must also be clearly mentioned in the Memorandum.

The form of a Memorandum of Association of a Company Limited by Shares can found in Table B of the Companies’ Law Cap. 113. The Memorandum of Association can be amended, while the procedures followed for this alteration vary according to the nature of the amendment. For example, the name of a company can be amended through a special resolution signed by the shareholders of the company and upon the relevant approval by the Cyprus Registrar of Companies. The Memorandum may also be amended as to the purposes of a company, or for any changes to the company’s authorised capital.

On the other hand, the role of the Articles of Association is to specify various internal regulations controlling the day-to-day procedures of a company, e.g. the quorum needed for the shareholders’ meeting or the board of director’s meetings.

The Articles of Association of a company may adopt all or any of the regulations contained in Table A of the First Schedule of the Companies Law Cap. 113. The Articles of Association may be amended through a special resolution signed by the shareholders of the company as long as such an amendment is not in contradiction to the company law provisions; by restricting, for example, the interests of the minority of shareholders unless this would be analogous to the benefit of the Company.