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[ESTABLISHING A BUSINESS ENTITY IN CYPRUS]
partnership. Since 2015, a limited liability partnership (LLP) can also be established. Partnerships are not considered to be separate legal entities and therefore, profits generated by a partnership are taxed as income received by the partners. 1.C Fund With the enactment of the Alternative Investment Funds Law of 2018, Cyprus has modernized its legal framework regulating the registration and operation of alternative investment funds (“AIFs”). The law permits the registration of AIFs which are self-managed (by their board of directors) or externally managed by a fund manager and may be registered with Unlimited Number of Persons or with Limited Number of Persons, or as “Registered” AIFs. An AIF may be formed as a company with a fixed capital, a company with variable capital, a common fund, or as a limited liability partnership with or without legal personality. Key features • Various legal forms are available, including tax transparent ones, to meet investor wishes. • Cost-efficient and simple to set up, manage and operate. • Modern regulatory framework fully in line with relevant EU directives. • Full transparency through annual audited and half yearly reports to CySEC and investors.
• The majority of the company’s share capital must be held by third country national(s). • Investment of €200.000 should be made in the company. • The company should operate in independent offices in Cyprus. After 5 years of residence and work in Cyprus (or after 4 years if they hold a certificate of knowledge of the Greek language) third country nationals can apply for Cyprus citizenship. Foreign highly skilled employees in Cyprus can enjoy tax exemptions for up to 17 years which can include 50% income tax exemption where
salary is at least EUR 55.000 per year. Public Company Limited by Shares
A public limited liability company is similar to a private company in terms of its features. It must have at least seven shareholders and a minimum share capital of EUR 25.629. Unlike a private company, a public company is permitted to make offerings to the public and can be listed on the stock exchange upon satisfying certain criteria. 1.B Partnership Partnerships are regulated by the Partnerships and Business Names Law Cap. 116, as amended, and they may be formed either as general partnerships or limited partnerships. In a general partnership all partners have unrestricted liability for all obligations of the partnership. In a limited partnership at least one partner is treated as a general partner and has unrestricted liability for the partnership’s obligations, with the other partners having limited liability up to the amount contributed (or remaining unpaid) by them to the
Reduced reporting requirements.
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• Generally, no restrictions imposed by the Regulator on type of investments. • May be self-managed (subject to the approval of the Regulator).
ILN Corporate Group – Establishing a Business Entity Series
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