Divorce in Cyprus

There is a list of different pieces of legislation, which include provisions regarding the divorce procedure, either for the dissolution of religious or civil marriages. The most recent piece of legislation is the Civil Marriage Law (N.104(I)/2003) which was put in force in Cyprus in 2003, in which there are a number of provisions regulating the divorce procedure.

Regarding the grounds for divorce, which an applicant can invoke, the aforementioned pieces of legislation provide for several grounds for divorce which include, among others, the following:

  • Adultery
  • Immoral, disgraceful or any other repeated unforgivable behavior resulting in serious deterioration of the marital relationship, which makes it intolerable for the applicant to continue to live with his/her spouse.
  • An attempt against life, e.g. physical abuse.
  • Final sentencing to a term of imprisonment longer than seven years
  • Disappearance
  • Sexual incapacity present at the time of marriage and which continues for at least six months and including the time the action is brought.
  • Persistent refusal to give birth to a child despite the other spouse’s desire and/or attempts.
  • Separation for a continuous period of four years.

Generally, the applicant must establish that the marriage has irretrievably broken down. The applicant may also invoke/prove that the respondent has behaved in such a way that the applicant cannot reasonably be expected to continue to live with him/her.

Regarding the procedure, in the event of religious weddings a letter should be dispatched to the Archbishop with the name of the applicant as sender. With such letter the intention of the applicant to file a divorce is notified. The letter shall be sent by registered post. The right to file an application for a divorce in Court is obtained 3 months after receipt of the letter by the Archbishop.

In the event of civil weddings, the party concerned can file a divorce application at any time before the Family Court, without any preceding action.

Furthermore, it should be noted that in Greece and in other jurisdictions, when both parties consent/agree with the divorce, then they both have to sign a series of documents in order for the marriage to be dissolved.

On the other hand, in Cyprus even if both parties agree to the divorce there is not such an option, as the one mentioned above, so the ordinary procedure should be followed. In practice, this means that the one party simply avoids appointing a lawyer, so that the applicant can proceed in his/her absence and the divorce may be issued within a very short period of time.

However if the respondent does not consent to the divorce application, then he/she can appoint a lawyer and proceed with the filing of an objection but in this case the whole procedure will take much longer.

Concerning the divorce application a number of details should be provided from the person concerned to the lawyer of his/her choice, including among others the Certificate of Marriage, the exact day that the wedding took place, the reasons for the divorce, etc. Once the divorce application is ready, it is filed in the Court and served to the other side/party involved.

Last but not least, the legal consequence of the divorce decision is only that the marriage is dissolved. This decision does not affect any property disputes that may arise, any custody proceedings (with the exception of divorces granted due to the physical abuse of children) and neither does it entail an obligation to pay maintenance to the other spouse. All these are independent procedures, which can be brought before the Courts only by way of filing separate applications.

For more information concerning the divorce procedure in Cyprus or other matters arising from the dissolution of a marriage, do not hesitate to contact us

British Virgin Islands entering the “white-list” of the cooperative tax jurisdictions of the EU

In 2018, British Virgin Islands were included on the EU’s ‘grey list’ of cooperative tax jurisdictions, despite its attempts to engage with the EU, because the EU required further progress in order to address its concerns.

Since that date, the BVI has proven its commitment to an effective cooperation with the EU and its dedication to promote good tax governance by passing the Economic Substance (Companies and Limited Partnerships) Act 2018.

There were also other pieces of legislation (either primary or secondary) which passed in order for BVI to achieve the aforementioned goals and at the same time to continue to be one of the most preferred jurisdictions for companies’ registration.

Each of these measures adopted by the BVI further establishes its position as an internationally respected and stable financial centre, which attracts businessmen from all over the world to establish their companies there.

Furthermore BVI seems to be present and committed in a positive dialogue with the EU, in order to meet and comply with the existing international standards.

Up to this end, during the last week of February 2020, EU announced that BVI managed to be included in the EU “white-list” of cooperative tax jurisdictions, among other countries and at the same time it managed not to impose/place irrational restrictions regarding the incorporation of companies.

Thus BVI is now, more than ever, one of the most appealing and stable jurisdictions for company incorporation, with a number of benefits, including among others the low taxation, the fast procedure of incorporation, the availability for residents of any country, etc.

For more information concerning company incorporation in BVI, do not hesitate to contact us directly in info@danoslawfirm.eu.

Andreas Danos Law Firm starts cooperation with Dubai law firm about registering companies

Andreas Danos Law Firm would like to announce that it has started successful cooperation with a Dubai law firm, mainly concerning companies’ registration, which would enable our clients to set up a company in the United Arab Emirates.

Even though the United Arab Emirates do not have the “tax heaven” stigma, registering a company there have a lot of advantages. First of all, for the entities registered in the UAE there is 0% corporate income tax. Further company registration’s details depend on the emirate where the entity is registered and the type of the entity.

There are several legal solutions for foreign companies wishing to conduct a successful business in the UAE. One of them is to register a company in numerous free-trade zones in the UAE. Those areas have a special tax, customs and imports regime and are govern by their own framework of regulations. Within the most investors-friendly free zones in the UAE are Dubai free zones. There are several free zones in Dubai and each of them is specified for the exact branch of business (f.e. Dubai Silicon Oasis, Dubai Media City, Dubai Internet City). Dubai free zone company can be established using the 3 following entities: Free Zone Establishment, Free Zone Company and branch. The two firstly mentioned enjoy limited liability, while the branch has unlimited liability for the parent company. All three types of entities allow the 100% foreign ownership, appointment of corporate directors and visa applications for foreign employees. The Dubai free zones companies are obliged to rent an office in the zone (but it is not necessary to hire the staff), appoint a resident company secretary, submit annual audited financial statements and annually renew the business licence. What is more, free zone companies do not require a UAE national shareholder and are excellent solution for investors wishing to use Dubai as a gateway to the consumer markets in Africa and the Middle East. Exemption on corporate tax minimalizes withholding tax on remittance to other countries and no customs duties are imposed on goods imported or exported from the free zone.

Another solution for the investor is opening a Dubai offshore company, which is an ideal, tax efficient and cost effective corporate structure for entrepreneurs who wish to conduct international trade. An offshore entity is sometimes called the ‘nonresident paper company”, because it allows foreign entrepreneurs to trade with Africa and Middle East without administrative obligations. The main difference between the Dubai free zone company and the Dubai offshore company is that the offshore company is not allowed to trade in Dubai and in the UAE. Besides that, a Dubai offshore company is quick and simple to set up and the shareholders and directors are not required to register their names and details for public record. What is more, an offshore company is exempt from all annual accounting and tax obligations.

The less popular corporate structure is the Dubai Limited Liability Company. This entity is advised for companies wishing to conduct consulting business (legal and accounting consultancy, IT and management consultancy, marketing consultancy). In other industries, the Dubai authorities require foreigners to create a joint venture with an UAE national, who must hold at least 51% of the shares.

REGISTRATION OF FOREX COMPANIES WORLDWIDE

We specialize in registration of Forex Companies worldwide especially in Cyprus, Vanuatu, Belize, etc. and we have recently successfully helped a client for registration of Cyprus Forex company.

FX or Forex (foreign exchange) trading is a relatively new type of market which investment firms worldwide conduct business in. It encompasses generally an over-the-counter market where buyers and sellers conduct foreign exchange transactions.

Why setting up a Forex Company in Cyprus, Vanuatu, Belize, etc?

Cyprus, due to its attractive tax regime, coupled with its EU Member status, its implementation of the Markets in Financial Instruments Directive (‘MiFid’), and regulatory regime has proved the perfect jurisdiction for the incorporation and operation of FX companies.

Vanuatu, a remote archipelago in the South Pacific, a popular tourist attraction is something called land diving. It has zero corporate tax, it also has no income tax, no capital gains tax, no estate tax, no wealth tax, no withholding tax, no gift tax and no other personal income taxes. Aside from a locally applied 12.5% VAT, there are almost no taxes at all.  With such a taxation regime in place for international companies and offshore companies incorporated in the jurisdiction, Vanuatu can rightly be considered as a “Tax Haven” – and one of the most attractive in the World from many perspectives.

Belize, is located on the eastern coast of Central America, is a tax haven in the purest sense, because it provides a simple incorporation process for offshore companies, which do not pay taxes on earnings from abroad. The tax code in Belize defines offshore income as dividends, capital gains, earned interest and revenues. Dividends paid by offshore companies incorporated in Belize to non-citizens of the country are also tax-free.

Especially after the recent changes in EU directives and regulations non-EU regulated forex companies can no longer operate in the EU and/ or the euro as a currency.

So, nowadays there is a big trend of setting up regulated Forex companies in Cyprus, Vanuatu, Belize, etc that in addition have very favorable tax and regulatory regimes coupled with very low operating cost levels and considerable financial services, legal, tax and accounting expertise and infrastructure.

Minimum Capital Requirements:

In February 2014 there was an amendment of Law N.193(I)/2014 Article 10 (Law of the Investment Services and Activities and Regulated Markets), whereby the initial capital requirements of CIFs has been reduced significantly in order to attract further investments in Cyprus.

Hence the initial capital requirements were configured as below:

A CIF that provides one or more of the following investment services and holds clients’ money or/and client’s financial instruments, must have an initial capital of at least one hundred twenty five thousand euro (€125.000):

(a)  The reception and transmission of orders in relation to

financial instruments

(b)  the execution of orders on behalf of clients;

(c)  portfolio management;

(d)  provision of investment advice;

A CIF that provides the investment services stated in subsection (a) or/and (d) above, and does not hold clients’ money or/and clients’ financial instruments, and which for that reason may not at any time place themselves in debt with their clients, may have an initial capital of:

(a)  At least fifty thousand euro (€50.000); or

(b)  at least forty thousand euro (€40.000) and professional indemnity insurance covering all member states or some other comparable guarantee against liability arising from professional negligence, that it enters into with an insurance undertaking, representing an amount of at least one million euro (€1.000.000), per claim, and in aggregate at least one million five hundred thousand euro (€1.500.000) per year for all claims.

A CIF that provides one or more of the following investment services or/and performs the following investment activities shall have an initial capital of at least seven hundred thirty thousand euro (€730.000):

(a)  Dealing on own account;

(b)  Underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis;

(c)  Placing of financial instruments without a firm commitment basis;

(d)  Operation of Multilateral Trading Facility.

Directors:

A Cyprus FX company must have at least one Executive Director, who passes a ‘fit and proper’ requirement test, who is resident in Cyprus. This means that he must have an investment/financial background, has a respected reputation in business circles and has a clean criminal record.

The requirement for Cyprus residency is to enable Cysec to correspond and liaise with him especially in as regards reporting as well as for clarifications and spot checks.

Furthermore, the company must have a General Manager, who is non-executive, and has no requirement to be resident in Cyprus. The requirement is that he visits Cyprus on a regular basis to oversee the functions of the company. The role of the General Manager is mainly to oversee the Executive Director and the Board of Directors in general.

Application Procedure :

All corporate documents of the company (incorporation certificate, certificate of directors/secretary, shareholders, Memorandum & Articles, etc) together with the CIF application form (Form 144-03-01). [The usual time frame for the preparation of the application and supporting documents is 1-2 months, depending on the prompt availability of the required documents].

Together with the above document bundle, a three year business plan, and internal procedures manual and anti-money laundering and know your client procedures must be filed with the application.

Initially, our firm has experience of setting up a Forex Company in Cyprus, Belize, Vanutatu, etc. We prepare the special memorandum and articles of the company

Registration of companies in BVI

Our law office enjoys an excellent reputation for its litigation strength and expertise in all aspects of commercial litigation, insolvency and investment fund disputes.  We have extensive experience in registration of companies worldwide and especially in British Virgin Islands. We have recently successfully helped a client for registration of Company in British Virgin Islands.

The British Virgin Islands, or BVI for short, is a group of fifty islands in the Caribbean forming a British Overseas Territory. The main islands within this group are called Tortola, Virgin Gorda, Anegada and Jost Van Dyke. They have been autonomous from Britain since 1967. While the official name is the Virgin Islands, they are usually called the British Virgin Islands to separate them from the nearby American Virgin Islands.

Why is British Virgin Islands considered to be a tax haven?

A tax haven is – according to the OECD – a jurisdiction that seeks to make itself attractive to businesses and business owners seeking more favorable tax treatments than those available in their country of origin or residence. As such a tax haven provides beneficial terms under which either new companies can be incorporated or off-shore entities of already existing companies can be established.

The “British Virgin Islands tax haven” has come about through the creation of a very simple set of corporate taxation rules that offer a highly beneficial taxation system. The British Virgin Islands does not have any capital gains tax, gift taxes, sales tax, value added tax, profit tax, inheritance tax or corporation tax. Salaries paid to employees employed by an off-shore company established in the BVI tax haven are taxed at 8% for the employee the remaining percentage up to 12% or 14% for the employer for any salaries above $12,000.

The relative simplicity of these tax regulations along with the low tax rates explain why British Virgin Islands has become one of the most popular places for off-shore establishment of businesses. The BVI tax haven also offers another important benefit – relative privacy of details regarding financial transactions as well as corporate incorporations. This allows companies to configure their own corporate structure without harmful interference or risk of competitors gaining access to undue information.

Seven reasons to purchase an offshore company in the BVI:

1) Complete freedom from taxes in the country of registration.

2) The British Virgin Islands – the oldest and most respected offshore jurisdiction in the world.

3) The British Virgin Islands have the most elaborate offshore legislation in the world.

The highest level of security.  Information about the owners, shareholders and directors of the company is safely hidden from inquisitive eyes.

5) The Act does not limit the size of the share capital of BVI companies and does not specify the exact timing of the payment.

6) The law does not require the company to submit financial statements.

7) Free use of directors and shareholders as legal entities.

Documents needed to register a company in the British Virgin Islands:

The prestige of this jurisdiction has a downside. The documentation requirements are generally stricter than in more “democratic” offshore zones. If they seem too off-putting, we recommend that you try Belize or the Seychelles instead, where the process is much simpler.

Mandatory documentation:

1) A certified identification document.

A passport (foreign or domestic) is the most readily-accepted document. Next, in descending order, a national ID-card or driving licence (only acceptable if it contains a photo of the owner). The authenticity of the document must be certified by a notary, lawyer, certified public accountant, an employee of the embassy or consulate, a bank manager, a police officer or other person authorized to certify documents.

If you visit our office in Riga or in the BVI, copies of your document will be made by our staff on-site.

2) Proof of residence.

What is it? Any official document showing your name and address together. The most popular options are: utility bill (except mobile phone bills), bank statement (including credit card statement), a certificate from the housing department, an extract from the register of residents, a letter from a notary, bank official, etc.

3) Reference letter from the bank.

This formal document can easily be provided by almost any bank. Banks are familiar with this procedure and, as a rule, each bank has its own format.

In this letter, the bank confirms that the relevant person has been a customer of the bank for however many years, and declares the absence of any claims to this person .

4) Confirmation of the source of legal funds.

This is usually a bank statement.

Actual figures in this account are not that important. The law only requires proof that the client has legal funds.

Andreas G. Danos law office provides both corporate and litigation services.  Our law office enjoys an excellent reputation for its litigation strength and expertise in all aspects of commercial litigation, insolvency and investment fund disputes.  We have extensive experience in registration of companies worldwide and especially in British Virgin Islands.

Family Law in Cyprus

In Cyprus, the majority of the cases that are related to family matters, such as divorce, property relations, marital relations, custody and maintenance of a child are resolved by Family Courts. Under certain circumstances the family matters are resolved by the President of the District Court or the Family Courts of the Religious Groups.

For the family Courts to have jurisdiction it is an important requirement that one of the parties or both parties are resident in Cyprus for a continuous period of three months or more. However, if the dispute involves property relation, then there is no need for any of the parties to be residents in Cyprus.

A decision issued by a Court of another country can be enforced in Cyprus provided that Cyprus has an agreement with that particular country for mutual recognition and enforcement of judicial decisions with the country issuing the decision. If the country issuing the decisions is an EU Member States, then the enforcement will be effected by using the EU Regulations.

Regarding a divorce the dissolution of civil marriage in Cyprus is granted in Cyprus Family Courts once the applicant files an application at the Family Court. In case of religious marriage, the spouse applying for the divorce must first notify in writing, according to Article 3(1) of L. 22/90, the Bishop of the area where the applicant lives stating the grounds for the divorce.

The most common reason for divorce is the irretrievable breakdown of the marital relationship which makes the continuation of the marriage irrevocable for the applicant.

In case of property relations each spouse retains all the rights they have on their personal property. Only property that was commonly acquired after the marriage may be divided or regulated by a court order. The contribution of a spouse is presumed to be 1/3 of the increase of the value of the property unless it is proved otherwise.

Our Law firm is one of the oldest and most reputable law firms in Cyprus and we specialize in Family law.

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.