Incorporating IBC in Cyprus

New Tax Legislation The Parliament of Cyprus has approved the changes in the tax legislation of Cyprus, which will be effective from 1 January 2003. The main goal of the changes was to harmonize the legislation of Cyprus with European Union law and to follow the OECD directives concerning the elimination of low taxes.

The main changes concerning the Cyprus companies are as follows:

• The distinction between Cyprus local companies and Cyprus non-resident (i.e. offshore) companies will not exist any more. All Cyprus companies will be taxed at the profit tax rate of 10%.
• Non-resident Cyprus companies which started their activities before 31 December 2001 can choose between the old advantageous rate of 4.25% and the new 10% rate. The 4.25% tax rate may be used latest until the end of 2005.
• Dividend income both from Cyprus and from abroad is wholly exempt from the profit tax.
• The dividends, interest payments and royalties paid to non-residents of Cyprus are free from withholding tax.
• Profits earned from the foreign branches of Cyprus companies are wholly exempt from profit tax.
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The main changes concerning the Cyprus companies are as follows:

• Incorporation Fee for a Cyprus IBC
• Nominee director
• Nominee shareholder
• Fiscal residency certificate
• Bank account at Barclays Bank PLC Cyprus
• Letter of resignation of nominee director
• Share transfer document (signed, undated)

Option

• Reinvoicing
• Phone / fax set-up

Annual Charges

• The Annual fee for Company Registered Office
• Annual Fee for Company Secretary (plus disbursements) 
• Annual fee for supplying Nominee Shareholder -if required
• Annual fee for supplying Nominee Director -if required
• And Plus Accounting

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