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[ESTABLISHING A BUSINESS ENTITY IN CYPRUS]
Under the Cyprus tax regime thin capitalization rules do not apply. There is no withholding tax on payments to non-residents and generally, exemption applies from tax on profits from the disposal of securities (with a wide definition of what constitutes eligible securities) and from tax on dividend income (subject to certain conditions). Where a third-country national wishes to acquire directly in his/her own name real estate property in Cyprus an approval must be obtained from the district office. This is mostly an administrative process and does not apply where the investor purchases the property through a Cyprus company in which he/she is the shareholder. The anti-money laundering laws and regulations (harmonized with EU relevant laws) must in any case be satisfied for a person to conclude transactions in Cyprus. 4.B Residency Where a person is not an EU citizen, there are two main schemes which may be pursued for obtaining residence permit in or through Cyprus. Fast Track Permanent Residency Scheme Fast track scheme, under which an applicant by investing €300.000 (plus VAT) or more in a residential property in Cyprus (or other eligible investments such as units in Cyprus registered investment funds) can, within a period of about two (2) months, obtain a permanent Cyprus residence permit. The permit can be granted to the applicant and his/her spouse, to their “dependents” and parents, valid for their entire lifetime. Cyprus Foreign Interest Company A Cyprus company (which may be an ordinary private limited company by shares) can employ third country (non-EU) nationals if it meets
certain basic requirements. These employees can be issued employment and residence permits to work and live in Cyprus. To utilize the scheme, the majority of the company’s share capital must be held by third country national(s), an investment of at least EUR 200.000 should be made in the company and the company should operate in independent offices in Cyprus as per the relevant regulations. Visa Entry The following categories of nationals can travel to Cyprus freely and do not require an entry visa: ● EU nationals (including Liechtenstein, Switzerland, Iceland, and Norway). ● Holders of certain diplomatic passports. ● Ship crews. ● Holders of Schengen multiple entry visas and/or residence permits issued by a Schengen member state (including Romanian or Bulgarian authorities). All other foreign nationals must apply for one of the following visa types: ● Short-Stay Visa allowing foreign nationals to enter Cyprus for a maximum of 90 days within a six-month period (for travel or business, excluding immigration). ● Multiple Entry Visa allowing foreign nationals to enter Cyprus on multiple occasions for up to a maximum of 90 days in any given six-month period. Usually, this type of visa is valid for a maximum of five years. ● Border Issued Visa (granted in exceptional circumstances).
ILN Corporate Group – Establishing a Business Entity Series
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