Author Archives: Artemios Michael Mallas

Non-EU Citizens: Starting a new or second-home in Cyprus?

Non-EU Citizens: Starting a new or second-home in Cyprus?

With many neighbouring nations facing political and financial instability, it is no surprise that households are seeking a new or second home for their family. The past few months, the island has seen a high influx of Lebanese families and companies in search of a way-out from the current situation in Lebanon. Panayiotis Z. Toulouras LLC is able to assist clients from start to finish as they relocate or set up a second home here in neighbouring Cyprus.

Residency programs allow individuals to live freely and enter into Cyprus, as legally residing citizens of Cyprus, allow them to provide their children a high quality education and a safer way of life for the whole family. The programs allow individuals the opportunity to engage in a Cyprus business as a co-shareholder or the option of establishing a Cyprus Company as a sole shareholder. Individuals and companies in Cyprus are able to benefit from Cyprus’ tax advantages.

Two main types of Permanent Residency

  • Category 6.2 (Fast Track Permanent Residency)
  • Permanent Residency Category F (Normal Option)

A) Category 6.2 (Fast Track Permanent Residency)

Requirements – To be eligible the applicant must:

1. Make a investment of a minimum of €300.000: 

  • Eligible through purchasing investing at least €300,000 (excluding VAT) in one of the following options (a) residential properties (b) commercial properties (c) company share capital and (d) Cyprus investment funds,
  • Option (c) investing at least €300,000 (excluding VAT) in a company share capital gives the right to the main applicant to work in Cyprus as an employee,
  • The P.R. does not expire and the holder does not need to renew it.
  • All options give the right to applicants to be shareholders in Cyprus.

Note: Properties under construction can be included.

Note: Property can also be bought in a company’s name if the actual owner or ultimate beneficiary will be the applicant or their spouse.

2.   Have an Annual Income:

  • The applicant must prove an annual income from abroad of minimum €30.000
  • This is increased by €5.000 for each dependent (e.g. children and spouse).
  • This is also increased by €8.000 for each dependent parents or parent-in-law
  • If all above is satisfied the above family members can apply and get the permanent residence permit.

Note: It can be any income deriving from salaries, pensions, dividends, fixed deposits, rents etc.

Family members

  1. The Permanent Residency permit covers the spouse and children up to 18 years old
  2. Also, children between 18 and 25 years old are able to apply as long as they are financially dependent on the applicant and are unmarried
  3. The Permanent Residency is kept by the children for life even if they exceed the age of 25 or do not continue to fulfil the above terms )e.g. unmarried, students, financially dependent)

Note: Only Fast Track Residency allows parents and parents-in-law of the applicant to also get a Permanent Residency without buying an additional property 

Conditions and Restrictions

  1. The holder must visit Cyprus once every two years. If not, the residency permit will be cancelled automatically
  2. The holders of Permanent Residency are not permitted to work in Cyprus. However, they can live in Cyprus as shareholders in a Cypriot Company, which are able to undertake business in Cyprus or abroad, and also receive dividend income from companies. (We are able to assist in the Company incorporation)

Duration

  • Application process: 2-3 months (Fast-Track)
  • Application Approval Rate 100%

B) Permanent Residency in Cyprus Category F (not Fast Track)

Requirements – To be eligible the applicant must:

  1. Purchase a Property in Cyprus – Category F residency is flexible and does not have a strict requirement of property purchase as a rental may also be possible:
  • However, it is always recommended to buy a property in Cyprus of any amount. (We are able to assist in presenting various property options according to your needs and requests and finalising purchase)
  • It can even be a resale property (not new) purchased
  • The money for the purchase does not need to be transferred from abroad

2.   Have an Annual income:

  • The applicant must show an annual income of at least €9.568 for one applicant, plus €4.613 for each dependent person.
  • This income must come from abroad

Note: It can be any income deriving from salaries, pensions, dividends, fixed deposits, rents etc.

3.  Deposit in a Cyprus bank:

  • The applicant should have deposited in a bank account in Cyprus an amount of approximately €15.000 to €20.000. (We are able to assist in the setting up of a bank account)
  • Unlike the Fast-Track application, the deposit is not pledged, and the money can be used after the application is submitted

Family members

  1. Only children up to the age of 18 years old are allowed to apply as a dependent
  2. Their permanent residency will be valid only until they become 18 years old
  3. The parents or parents in law of the applicants cannot apply as dependents

Conditions and restrictions of the permanent residency program

  1. The holder must visit Cyprus once every two years.If not, the residency permit will be cancelled automatically.
  2. The holders of Permanent Residency are not permitted to work in Cyprus. However, they can live in Cyprus as shareholders in a Cypriot Company, which are able to undertake business in Cyprus or abroad, and also receive dividend income from companies. (We are able to assist in the Company incorporation)

Duration

  • Processing time about 12 months
  • Application Approval Rate 100%

Advantages of Residency Programs: 

Cyprus, located between three continents – Africa, Europe, Asia – is a proud member of the Eurozone and home to around 1 million people. Since 2014, Cyprus has been experiencing strong and rapid growth and is fast becoming an appealing destination for Non-EU citizens.

Cyprus is considered special instantly by all new visitors. The island possesses the best of everything, from democracy and security to Europe’s best climate . The island’s small size and Mediterranean way of life means you and your family get to experience a stress-free daily life, away from the hustle and bustle that you will find in bigger countries.

The island will be a safe haven for you and your family to build a home and start the European dream.

1. The Cyprus Tax Regime

Corporate Tax

The Cyprus tax regime has a long list of tax advantages aiming to benefit companies and individuals situated in Cyprus

A company is considered to be a Cyprus tax resident if it is managed and controlled from Cyprus. Worldwide business profits of a Cyprus tax resident company will be subject to a corporation tax of 12.5% with a number of other tax advantages that companies can benefit from:

  • Dividend income is in general exempt from tax irrespective of its source
  • Cyprus does not impose income or capital gains tax on profits and gains from the disposal of shares, bonds, debentures
  • Cypriot companies are exempt from taxation on foreign exchange (FX) gains
  • No withholding tax is imposed on interest and on royalties paid from Cyprus in respect of intellectual property used outside Cyprus
  • Dividends paid to non-resident shareholders are exempt from withholding tax in Cyprus
  • Profits of a permanent establishment maintained abroad are generally exempt from tax in Cyprus

Personal Tax

  • Individuals who spend more than 183 days in Cyprus are considered a tax resident of Cyprus
  • A Cypriot tax resident individual is subject to income tax on his/her worldwide income whereas a non-Cypriot tax resident individual is subject to income tax only on Cyprus sourced income
  • Tax exemption on dividends and interests earned by non-domicile

Double Taxation Treaties

Cyprus has currently tax treaties with more than 60 countries, including countries in North America, Europe, Africa, the Middle East. Treaties provide two advantages:

  1. protection from double taxation on the same income from two states
  2. protection against excessive foreign tax

2. Schengen Area

While holding a Cyprus Permanent Residency, Non-EU applicants can easily apply for a Schengen visa and travel across Europe. This will allow you to have less hurdles previously found in your country of origin.

3. Location, Location, Location

Cyprus’ location is very strategic as it is positioned between Europe, Africa, and Asia, with the island’s two international airports linking Cyprus to all major airports:

  • London – 4 hours 30 minutes (Direct)
  • Paris – 4 hours 15 minutes (Direct)
  • Frankfurt – 4 hours (Direct)
  • Zurich – 3 hours 30 minutes (Direct)
  • Dubai – 3 hours 30 minutes (Direct)
  • Doha – 3 hours 30 minutes (Direct)
  • Beijing – 13 hours (1 stop)
  • New York – 11 hours 30 minutes (1 stop)
  • Singapore – 10 hours 40 minutes (1 stop)

 4. Quality Workforce

  • Benefit from the local impressive skilled workforce Cyprus has to offer, direct access to a great pool of talent from other EU countries
  • Benefit from programs allowing international professionals to easily relocate
  • Almost half of the workforce in Cyprus have a tertiary degree, predominantly from the UK. – one of the highest in the EU. More Cypriots earn degrees from foreign universities than any other EU country

5. Operational Costs

Launching a business in Cyprus reduces your overall set-up costs compared to other EU countries resulting in more budget being allocated for growth and development of your business.

  • Lower labor costs and lower office rent than other EU countries, so you can set up a business a lot cheaper than the rest of Europe
  • Low business and high quality support costs – services like I.T., accounting, legal, etc.

6. Member of the EU

As a proud member of the European Union Full access to European Markets with free movement of goods, services, capital, along with access to 40+ EU trade agreements with countries outside the E.U.

Cyprus’ legislation is fully compliant with the EU legislation. European Union directives can be fully transposed into Cyprus legislation and EU regulations have direct effect and full application in Cyprus.

7. Life in Cyprus

When considering where to relocate, it is always vital to consider the quality of life you aim to have for you and your family. Choosing Cyprus ensures your company enjoys a Mediterranean island that provides a very high standard of living that includes:

  • One of the EU’s best all-year climates and one of the best worldwide,
  • Over 65 Blue Flag status beaches for all tastes (highest % per capita) sports, entertainment, etc, High level public & private healthcare services,
  • Short distances – can travel from one side of the island to another in 2 ½ hours Considered one of the world’s safest countries with one of the lowest crime rates in EU, Reasonable cost of living with great choice fresh products always available – both local and international
  • According to the European Environmental Agency, Cyprus also has the cleanest beaches in Europe
  • Real Estate available to cater all needs – city center, skyscraper, beach, countryside, etc
  • High Level of Education – many private schools and private institutions offering a high level of education in English for your children

What we do

Panayiotis Z. Toulouras LLC provides corporate and immigration services to clients worldwide. Our law firm, with the assistance of our vast network of associates, provides strategic advice spanning all aspects of Real Estate acquisition, Company set-up, Relocation services and Tax Planning.

  • Relocation assistance and advice
  • Real Estate acquisition or rental
  • Citizenship Applications
  • Permanent Residency Applications
  • Employment permits
  • Registration of international companies for the employment of foreign individuals
  • Visas
  • Advice on all related tax aspects
  • Facilitating online bank facilities
  • Processing of investment and lending facilities
  • Opening of private and corporate bank accounts

Contact us today for all information

Address: Faneromeni 106, Office 201, 6031, Larnaca, Cyprus

Telephone: +357 24 623 800   Fax: +357 24 332 991

Email: info@toulouraslaw.com

Website: www.toulouraslaw.com

 

All Eyes on Larnaca! Why Real Estate is booming.

Larnaca has quickly become the island’s most attractive destination for real estate investors. Our team of real estate experts lets you know all you need to know about buying immovable property in Cyprus.

MARINA AND PORT PROJECT

The long-awaited €1.2 billion redevelopment of the Larnaca port and marina, will rejuvenate the city of Larnaca and will be the largest infrastructure project since the construction of the new Larnaca International Airport.

The project will play a formidable role in promoting Larnaca as one of the Mediterranean’s most up and coming tourist destinations.

The project envisages the expansion of the current marina to 650 berths, the infrastructure to accommodate large vessels, the expansion of the current pier, docks and the development of a sizeable passenger terminal for tourist cruise liners. In addition, the plans include the construction of a yacht club and retail park, along with a number of luxury hotels, a private island and residential property.

The spin-off from the project will result in Larnaca growing its footprint as a business hub in Cyprus, with the increase of office space and with international companies choosing to relocate to Larnaca to take advantage of the island’s favourable tax regime. Furthermore, the city’s overall tourist product will undertake a great revitalization through an influx of foreign and local investment.

BUYING IN CYPRUS

When buying real estate in Cyprus, an investor will need to consider various factors before and after purchasing the property.

Despite Real Estate Agencies and Property Developers advising Buyers not to seek the consultation of lawyers, it is highly recommended to seek professional legal advice when purchasing real estate in Cyprus as the repercussions of a one-sided agreement favouring the Seller can result in unrecoverable losses for the Buyer.

Our specialized ream of lawyers are legally obliged as professionals to undertake the appropriate due diligence on the prospective property and all the appropriate checks to ensure the property is ‘clean’ with no possible dangers, in order for you to enjoy the full and unequivocal rights of your future property.

Our specialized team of lawyers shall:

  • verify the Seller’s ownership of the property.
  • carry out an official search at the Land Registry to confirm if there are any encumbrances or charges registered over the property.
  • ensure the availability of all necessary permits, where required.
  • verify the financial standing and viability of the Seller.
  • provide an evaluation of the Seller’s reputation in the Cyprus real estate market.
  • assist in appointing qualified engineers or surveyors to carry out structural or other surveys, where required.
  • draft and execute the contract of sale between both parties with the contract’s provisions negotiated in a fair and balanced way with all formalities complying to all law and regulations applicable in Cyprus.
  • handle all matters related with the Cyprus Tax Authorities, where required.
  • execute an application for permission made to District Office in accordance to the Acquisition of Immovable Property (Aliens) Law Cap. 109 for purchase by non-EU nationals. Note: It takes about 15-30 days for the permission to be issued.
  • submit and register the contract of sale with the Land Registry Office preventing the Seller from transferring the property elsewhere or registering an encumbrance before finalizing the transfer. Note: This is valid as long as the contract is valid and legally effective.
  • assist in handling the payment of stamp duty and transfer fees related to the property.
  • authorised representative of the Buyer through Power of Attorney, from start to finish until the Property is transferred to the Buyer.

Title Deed

A title deed is a formal document issued by the Land Registry Office which legally confirms the ownership of a property.  Once transfer is made at the Land Registry, the title deed will be registered on the Buyer’s name.

When no title deeds are issued yet, this means, most likely immovable property purchased is off-plan or still under development.

There are situations where Buyers purchase a property without a title deed, however, appropriate due diligence must be undertaken to assess the reasons why the title deed has not been issued.

Stamp Duty

Sale Agreements must be fully stamped by governmental authorities within 30 days of its signing.

Rates are as follows:

€0 – €5,000: 0%

€5,001 – €170,860: 0.15%

€170,861 – €8,543,000: 0.20%

Over €8.543.000: €17.086

Transfer fees

Transfer fees are payable to the Land Registry Office and are calculated on the market value of the property on the date of the transfer.  Once the transfer fees are paid, the transfer to the Buyer is finalised.

It’s good to point out that a sole Buyer will pay more transfer fees, so it is custom for Buyers to add family members to the title deed.

Note:

  • A minor named on a title deed requires a Court Order to sell it before reaching 18 years old.
  • No Transfer fees are payable, if the property is subject to VAT (19%)
  • Transfer fees are reduced by 50% if the property was not subject to VAT.
  • 0% Transfer fees are payable if property is transferred from company to company

Transfer fee rates:

Up to €85 000 of the property value - 3%

From €85 001 to €170 000 of the property value - 5%

From €170 001 of the property value - 8%.

Examples

One Buyer buys a house for €400 000:

Transfer fees will be:

€85 000 x 3% + €85 000 x 5% + €230 000 x 8% = €25 200*

Transfer fees for Buyer: €12 600* (where 50% reduction applies)

Three Buyers buy a house for €400 000:

Transfer fees will be:

€85 000 x 3% x 3 persons + €145.000 x 5% = €14,900*

Transfer fees for Buyer: €7,450* (where 50% reduction applies)

OTHER FEES TO CONSIDER

VAT Payable on Property

A VAT rate of 19% is required to be paid when buying a new property.

A reduced VAT rate starting from 5%, is applicable for the acquisition of new residential properties when certain terms and conditions are met:

  1. The property must be used as the primary and permanent residence of the applicant for the next 10 years.
  2. The applicant has not acquired any other residence in Cyprus with a reduced VAT rate.
  3. The applicant must be an individual, over 18 years old, thus legal entities are excluded.

Note: The reduced VAT rate of 5% is applied on the first 200 square meters of the property as per the architectural plans submitted to the Authorities. On the remaining square meters, the standard rate of 19% is imposed.

Municipality Tax

The registered owner of the property is required to pay an annual Municipality Tax, calculated on the market value of the property as at 1st of January 2018. The rates vary from 1% –  2% Municipality tax is payable to the local municipal authority, where the property is located.

Other Fees (Local Authorities)

Depending on the size of the property, local authorities charge between €85 – €500 yearly for garbage collection, sewerage and other community services.

OUR FIRM

Panayiotis Z. Toulouras LLC provides clients legal advice on commercial and residential property.

Our areas of work include:

  • Negotiation and drafting of contracts
  • Sales and Purchase of property
  • Authorised Representation
  • Constructions
  • Market Evaluation
  • Long term and short-term leases
  • Property management for non-residents.
  • Licensing and Permits
  • Due diligence reports
  • Real estate transaction and tax issues

Data Trusteeship: What you need to know

Data Trusteeship: What you need to know.

The General Data Protection Regulation (GDPR) is now into its second, and since it was established in my 2018, it has strongly emphasized the importance of accountability, by requiring organizations to act in a compliant way, and to record and demonstrate their compliance through various assessments, procedures policies and documentation.

A Data Trusteeship aims to ensure GDPR requirements are met and personal data is held securely and independently.

Data Trusteeship: How Does Data Trusteeship work?

  • A Data Trust is formed when individuals, aka data subjects, transfer their personal data or data rights to a Data Trustee.
  • Law firms can be authorized Data Trustees who hold and govern that data through a Trust structure on behalf of beneficiaries for a specified and agreed purpose.
  • The Data can be handed to the Trust by the actual beneficiaries, or through a group transfer in situations where there is large number of data e.g. employee data, health data, bulk client’s data.
  • Data Trustees have a fiduciary duty to protect the interests of the data subjects and the personal data and data subject rights under its custody. Data Trustees are to take decisions on behalf of the data subjects.
  • Data Trustees are able to elect who has access to the Data controlled by the Trust and who can use it, according to the agreed terns and conditions.
  • Data Trustees are able to revoke access to the Data when the use of Data is not executed according to the setterms and specifications.
  • Data Trusteeship allows organizations using the Data to unlock the value of Data, whilst ensuring that their data subject’s rights of people are secure and protected.

Data Trusteeship: What do we do.

Panayiotis Z. Toulouras LLC acts as Data Trustees for organizations based in Cyprus and internationally, with the firm recently becoming authorized Data Trustees of a software company that provides operators with the technology to track and store the personal data of their daily visitors in order to maintain a database to help combat the spread of epidemic disease.

We offer our clients a vigorous operational process with decoding keys, data decryption, secured database servers, I.T. security and processes in place to ensure all terms and conditions are executed sufficiently.

 

 

What are the 8+1 Advantages of Setting Up a Digital Company in Cyprus?

What are the 8+1 Advantages of Setting Up a Digital Company in Cyprus?

Cyprus, located between three continents – Africa, Europe, Asia – is a proud member of the Eurozone and home to around 1 million people. The past few years, Cyprus has been experiencing strong and rapid growth as a tech hub, and is fast becoming an appealing relocation and headquartering destination for many digital businesses from the Middle East, CIS, USA and Scandinavia.

The competitive, modern, legal, financial, and regulatory framework that Cyprus possesses allows the island to be a credible and highly reputable hub for digital companies, startups and individuals involved.

Furthermore, there are other reasons justifying Cyprus as one of the most up and coming tech hubs such as its strong economic growth, its experienced workforce and talent available, its lower setting up costs, its competitive IP Box tax regime and its business visa residency permits.

As a result global powerhouses  such as Wargaming, Sykes, Amdocs, Nexters, MindGeek, NCR have set up regional and global headquarters in Cyprus.

1. The Cyprus Tax Regime

Corporate Tax

The Cyprus tax regime has been designed to attract investors and entrepreneurs.

A company is considered to be a Cyprus tax resident if it is managed and controlled from Cyprus. Worldwide business profits of a Cyprus tax resident company will be subject to a corporation tax of 12.5% with a number of other tax advantages that companies can benefit from:

  • Dividend income is in general exempt from tax irrespective of its source,
  • Cyprus does not impose income or capital gains tax on profits and gains from the disposal of shares, bonds, debentures.
  • Cypriot companies are exempt from taxation on foreign exchange (FX) gains,
  • No withholding tax is imposed on interest and on royalties paid from Cyprus in respect of intellectual property used outside Cyprus.
  • Dividends paid to non-resident shareholders are exempt from withholding tax in Cyprus.
  • Profits of a permanent establishment maintained abroad are generally exempt from tax in Cyprus.

Personal Tax

  • Individuals who spend more than 183 days in Cyprus are considered a tax resident of Cyprus.
  • Individuals are able to become a Cyprus tax resident by spending just 60 days in Cyprus provided they satisfy a certain criterion such as maintaining a permanent residence in Cyprus and carrying on a business here or being employed in
  • A Cypriot tax resident individual is subject to income tax on his/her worldwide income whereas a non-Cypriot tax resident individual is subject to income tax only on Cyprus sourced income.
  • Cyprus’ personal income tax rates are progressive, ranging from nil to 35%, on taxable income exceeding €60,000. The income of up to €19,500 is not subject to tax.
  • 50% of the remuneration from employment exercised in Cyprus by an individual who was not a resident of Cyprus before the start of their employment in Cyprus. This exemption will apply for a period of 10 years from the 1st year of employment, as long as the salary exceeds €100,000 per annum.

Double Taxation Treaties

Cyprus has currently tax treaties with more than 60 countries, including countries in North America, Europe, Africa, the Middle East. Treaties provide two advantages:

  1. protection from double taxation on the same income from two states
  2. protection against excessive foreign tax.

2. The IP BOX Regime

Cyprus is an attractive location to establish an Intellectual Property (IP) which is a holding and development company, as the island offers an efficient tax rate as well as sound legal protection conferred through EU Member States and major IP treaties and protocols that Cyprus entered into.

  • 80% of the profits qualifying for the regime are exempt from tax. With a corporate tax rate of 12.5%, this can result in an effective tax rate of as low as 2.5%.
  • Qualifying assets under the new regime include:
  1. patents,
  2. copyrighted software programs, and,
  3. other intangible assets that are nonobvious, useful and novel.

3. Foreign Interest Company – click here

Companies of foreign interests can give priority to employment of third country nationals (non-EU) instead of locals and EU nationals, with employees receiving business visas and their families being eligible for residency in Cyprus.

  • A Cyprus company with a majority of non-EU shareholders (over 51%) is eligible to employ up to 15 non-EU employees (including the shareholders themselves),
  • All 15 non-EU employees are able to work and live freely in Cyprus whilst they are employed for the Cyprus Company through receiving residency cards,
  • A direct deposit of capital amounting to at least €200.000, deposited into the Cyprus company’s bank account from abroad, is required to be eligible. This amount can then be used for company activities in Cyprus and abroad,
  • The company can also employ additional Specialists that have specific skills (click here for more info),
  • Family members (spouse, children, parents, and in-laws) of the Employees can also join and reside in Cyprus through family reunification.
  • The foreign interest company benefits from an advantageous 12.5% corporate tax (one of the lowest in Europe)

4. Life in Cyprus

When considering where to launch your business, it is always vital to consider the quality of life you aim to have for you, your family, and your employees. Choosing Cyprus ensures you and your team work on a Mediterranean island that provides you with a very high standard of living that include:

  • One of the EU’s best all-year climates and one of the best worldwide,
  • Over 65 Blue Flag status beaches for all tastes (highest % per capita) sports, entertainment, etc, High level public & private healthcare services,
  • Short distances – can travel from one side of the island to another in 2 ½ hours Considered one of the world’s safest countries with one of the lowest crime rates in E.U., Reasonable cost of living with great choice fresh products always available – both local and international
  • According to the European Environmental Agency, Cyprus also has the cleanest beaches in Europe
  • Real Estate available to cater all needs – city center, skyscraper, beach, countryside, etc
  • High Level of Education – many private schools and private institutions offering a high level of education in English.

 5. Quality Workforce

  • Benefit from the local impressive skilled workforce Cyprus has to offer, direct access to a great pool of talent from other EU countries.
  • Benefit from programs allowing international professionals to easily relocate.
  • Work visas for non-EU nationals are available to enable companies to hire from non- EU countries whenever the required skill-set is not available locally.
  • Almost half of the workforce in Cyprus have a tertiary degree, predominantly from the U.K. – one of the highest in the EU. More Cypriots earn degrees from foreign universities than any other EU country.
  • Rapid growing education system – one of the highest enrolments in domestic universities with many U.K. universities partnering up with Cyprus universities.

6. Operational Costs

Launching and running your business in Cyprus reduces your overall set-up costs compared to other EU countries resulting in more budget being allocated for growth and development of your business.

  • Lower labor costs than other E.U. countries Lower office rentals costs than most E.U. countries
  • Low business support costs and high quality – services like I.T., accounting, legal, etc.

7. Member of the EU

As a proud member of the European Union Full access to European Markets with free movement of goods, services, capital, along with access to 40+ EU trade agreements with countries outside the E.U.

Cyprus’ legislation is fully compliant with the E.U.  legislation. European Union directives are fully transposed into Cyprus legislation and E.U. regulations have direct effect and full application in Cyprus.

8. Location, Location, Location

Cyprus’ location is very strategic as it is positioned between Europe, Africa, and Asia, with the island’s two international airports linking Cyprus to all major airports:

  • London – 4 hours 30 minutes (Direct)
  • Paris – 4 hours 15 minutes (Direct)
  • Frankfurt – 4 hours (Direct)
  • Zurich – 3 hours 30 minutes (Direct)
  • Dubai – 3 hours 30 minutes (Direct)
  • Doha – 3 hours 30 minutes (Direct)
  • Beijing – 13 hours (1 stop)
  • New York – 11 hours 30 minutes (1 stop)
  • Singapore – 10 hours 40 minutes (1 stop)

8+1. Post-Brexit and U.K. Connection

UK-Cyprus trade relations existed before the E.U. and will continue strongly after Brexit as Cyprus belongs to the Commonwealth and has sovereign British bases on the island.

Cyprus’ legal and judicial system is very much aligned with that of the U.K. As such, Cyprus’ primary corporate statutes are based on and derive from English company legislation and its legal system is modeled on the English common law system.

73% of Cypriots speak English and is an official language due to British Colonization.

What we do

Panayiotis Z. Toulouras LLC provides corporate services to clients worldwide. Our law firm, with the assistance of our vast network of associates, provides strategic advice spanning all aspects of Intellectual Property, patent, trademarks protection, design registration, copyright, residency permits and the licensing of technology.

  • Advice on the acquisition, registration and protection of all Intellectual Property both domestically and internationally
  • Patent trademark copyright proceeding
  • Franchising and Licensing
  • Competition and Agency law
  • Immigration Permits
  • Advice on all related tax aspects
  • Processing of investment and lending facilities
  • Facilitating online bank facilities
  • Opening of private and corporate bank accounts
  • Software development agreements
  • Software licensing and distribution agreements
  • Employment Contracts
  • Relocation assistance and advice
  • Real Estate acquisition or rental

 

 

Why Hong Kong firms and HNWI are considering Cyprus as their new base?

Cyprus , located between three continents – Africa, Europe, Asia – is a proud member of the Eurozone and home to around 1 million people. Since 2014, Cyprus has been experiencing a strong and rapid growth and is fast becoming an appealing destination.

With the recent turmoil in Hong Kong, many firms and HNWI are seeking refuge to a jurisdiction that provides safety, convenience and potential for growth.

With foreign investors increasingly choosing Cyprus – the economic climate, real estate prospects, investment funds, shipping, construction, tourism, filming and energy sectors – are sectors which have experienced consistent growth. The competitive, modern and transparent legal, financial and regulatory framework that Cyprus possesses allows the island to be a credible and highly reputable financial center for Hong Kong firms and HWNI to set up base.

As an ex-British colony, Cyprus shares similarities with Hong Kong, as both jurisdictions have retained the common law legal system which is based on the British legal system.

Why Choose Cyprus?

Enjoy the right quality of life

When considering where to redomicile or set up your business, it is always vital to consider the quality of life you aim to have for you, your family and your employees. Choosing Cyprus ensures you and your team work in a Mediterranean island that provides you with a very high standard of living that includes:

  • One of the EU’s best all-year climates and one of the best worldwide,
  • Over 65 Blue Flag status beaches for all tastes (highest % per capita) sports, entertainment etc,
  • High level public & private healthcare services,
  • Short distances – can travel from one side of the island to another in 2 ½ hours
  • Considered one of the world’s safest countries with one of the lowest crime rates in E.U.,
  • Reasonable cost of living with great choice fresh products always available – both local and international
  • Real Estate available to cater to all needs – city centre, skyscraper, beach, countryside etc
  • High Level of Education – many private schools and private institutions offering a high level of education in English

Accessing Talent

E.U.
  • Benefit from the local impressive skilled workforce Cyprus has to offer, direct access to a great pool of talent from other EU countries
  • Benefit from programmes allowing international professionals to easily relocate
  • Work visas for non-EU nationals are available to enable companies to hire from non- EU countries whenever the required skill-set is not available locally
Cyprus
  • Almost half of workforce have a tertiary degree – one of highest in the EU,
  • Rapid growing education system – one of the highest enrolments in domestic universities with many UK universities partnering up with Cyprus universities,
  • High number of Cypriots educated abroad – more Cypriots earn degrees from foreign universities than any other EU country

Setting up with lower costs

  • Launching and running your business in Cyprus reduces your overall set-up costs compared to other EU countries resulting in more budget being allocated for growth and development of your business.
  • Lower labour costs than other E.U. countries
  • Lower office rentals costs than most E.U. countries
  • Low business support costs and high quality – services like I.T., accounting, legal etc.

Benefiting through tax incentives

Cyprus has one of the lowest tax burdens in Europe and a highly competitive set of tax incentives for businesses and individuals. It is great to note that people who decide to move their personal tax residency to Cyprus, will automatically be considered as non-domiciled in Cyprus for a maximum of 17 years.

  • different set of rules for ‘tax residents’ and ‘non-tax residents’
  • corporate tax is only 12,5 %, which is one of the lowest in the E.U.
  • very low tonnage tax for ship-owning and shipping companies,
  • 2,5 % on income from Intellectual Property
  • no corporate tax for ‘non tax resident’ companies
  • no Cyprus tax on disposal or trading of securities
  • no Cyprus tax on income from dividends on a company level, for a period of four years
  • no Cyprus withholding tax on dividends paid to shareholders outside of Cyprus
  • no Cyprus tax on dividend income for non-domiciled but tax-resident individuals
  • no Cyprus tax on interest income on account of non-residents with banks in Cyprus
  • no Cyprus tax for International Trusts
  • full tax group relief
  • offshore entities from other countries are allowed as shareholders
Non-Tax Residents
  • Non-tax resident Cyprus Companies are not liable for corporate tax in Cyprus, provided that each director/s do not reside in Cyprus, and the companies do not conduct any business with natural or legal persons residing in Cyprus, but,
  • Where a non-tax resident Cyprus Company conducts business in Cyprus, the profit from this business will be taxed in Cyprus.

Communicating, Commuting and Access

With English being a predominant language spoken between businesses, when setting up your business you can benefit from the island’s high percentage of English-speaking citizens. Cyprus is also centrally located between 3 continents (Asia, Europe, Africa) making it easy to commute back home or for business purposes:

  • 73% of Cypriots speak English – official language due to British Colonization
  • English widely accepted for business transactions, government services, contracts, banking and other day-to-day functions you’ll be undertaking
  • Daily flights in & out of Cyprus through Larnaca & Paphos international airports to multiple destinations making your global commuting easier
  • Full access to European Markets with free movement of goods, services, capital
  • Access to 40+ EU trade agreements with countries outside the E.U.
  • UK-Cyprus trade relations existed before the E.U. and will continue strongly after Brexit as Cyprus belongs to the Commonwealth and has sovereign British Bases on the island

Panayiotis Z. Toulouras LLC provides legal services to clients worldwide. Our law firm, with the assistance of our vast network of associates, provides strategic legal advice for:

  • the incorporation of a Cyprus company
  • setting up a branch in Cyprus
  • re-domiciliation of a Hong Kong company to Cyprus
  • opening of bank accounts
  • business visa applications and other visas
  • work permits
  • employment contracts
  • purchase/rental of property for commercial purposes
  • purchase/rental of property for residential purposes
  • applications for permanent & temporary residency
  • applications for naturalization
  • Cyprus international trust creation
  • I.P. registration

Ways your business can tackle or mitigate the COVID19 impact: Deed of Assignment or Deed of Novation?

Ways your business can tackle or mitigate the COVID19 impact: Deed of Assignment or Deed of Novation?

The “privity of contract” in Law means that only parties to a contract are obligated to fulfill the contract and have the right to enforce it.  However, the concepts of novation and assignment have been developed to sidestep ‘’privity of contract’’. Assignment and novation are two legal concepts of contract law that are often confused.

They affect changes in contractual obligations and rights of parties and are utilized to achieve different objectives. Their use may be critical for businesses or individuals seeking to combat or mitigate the economic impacts of the COVID19.

Deed of Assignment

With a deed of assignment, the performance of your contractual obligations remain but some rights are given to a third party, however, liability remains with the original contracting party. It is advised to always ensure that there are terms in the original contract permitted for assignments to be undertaken. If you attempt to assign rights that cannot be assigned, you risk nullifying the original contract.

Example: Party A would like to continue performance of contractual obligations with a client but Party A also wants to increase its subsidiary’s cash flow. Party A enters into an assignment with the client, to assign/transfer client’s obligation of payment from Party A to the subsidiary.

Example: A company wishes to transfer a commercial property lease to another business tenant during the fixed term, in order to accommodate the COVID19 impact on its cash flow. An agreement can be made to assign the lease obligation to another company.

Deed of Novation

Deed of novation allows the transfer of both rights and obligations to a third party. It is a way of substituting one party to a valid contract with another party. If a company or individual wishes to get out of an agreement due to the impact of COVID19, they are able to find a new party to take it on. One of the original parties is released from all liability and the new party assumes all responsibility for the contract performance. It must be noted that the original contracting party, which remains as a contracting party after the novation, must be left in the same position as they were prior to the novation being made. All three parties must consent to a deed of novation.

Example: If a holding company novates its rights to its subsidiary, and the subsidiary then subsequently acquires the obligation to perform services and the right to receive payment for those services. The holding company would no longer have an agreement with the client as the subsidiary would obtain the rights and obligations.

Example: A construction company transfers a construction contract to a new substitute contractor, as the construction company is not able to finish the project due to COVID19 impact. A deed of novation can transfer the right to finish the project to the substitute contractor.

Example: An individual/company enters into a loan agreement with a Lender, however, due to the COVID19 impact, the individual/company can no longer pay the monthly loan installments to the Lender. The company can transfer this debt to another individual/company, which becomes liable to repay the Lender.

Example: An IT Company provides a service to a company and the IT company wants to transfer the obligation of providing that service to another affiliate company that can provide the service. Novation can change who is providing the service.

Things to consider for Novation:

  1. Does the original agreement or contract allow for novation?
  2. All three parties need to consent to the novation.
  3. Will the novation have any impact on other agreements?
  4. When should the novation be effective?

Panayiotis Z. Toulouras LLC deals with a broad range of services in relation to corporate and commercial law, our specialist team is here to guide and provide further information on various ways you or your company can tackle or mitigate the impact of COVID-19:

Website: www.toulouraslaw.com

Contact: 0035724 623800

Email: info@toulouraslaw.com