A Private Company Limited by shares restricts the right to transfer its shares to other without taking the proper steps set out in the Company’s memorandum and article of association, has a limited number of 50 sharesholders and forbids public suscription to its shares. There are no minimun share capital requiremnt, no nationality, residency and age limitation for registering a private company.
A Private Company Limted can have only one director. The maximum number of directors is not fixed by law but can be imposed through the Company’s Article of Association. It allows a single shareholder, also the single shareholder, single director and single secretary can be the same person.
A Public Company must have at least 7 shareholders up. The minumum share capital is 25.630 Euros whcih must be fully paid up before starting its business. The shares are freely transerable and available to public subscription. It requires at least 2 directors
A General Parnernship is allowed to have between 2-20 individual members, except for the banking area where the maximum number of partners is 10. Partnerships are not required to file accounts.
Limited Partnership in Cyprus is at least one or more general partner have to hold unlimited liability and the remaining partners will have limited liability.
An excempt private company is made by a corporation and another company. It has a maximum number of 50 debentures holders. The company hold its shares and the director belongs to the Company. No filling account requirement. It is not subject to the statutory restiction on loans to directors.
The liability of its members is limited to the agreed upon a memorandum to be contributed in case the company goes into liquidation.
Sole Proprietorship runs a business on theri own with or without employees. A sole proprietor has unlimited liability for his bebts
Any foreign company has right to establish a branch in Cyprus. The Cypriot branch must carry the same name as the parent company and acts as an extension of the headoffice. However, the parent company is fully liable for all activities the branch undertakes. The Cypriot branch of a foreign company must nominate a resident reprentative in charge of the branch activites and maintain relations with the tax authorities. During its first month of establishment it is required to fill in a certified copy of the Memorandum and articles of association, a list with all directors and secretary, the name and address of its Cypriot representatives
Cyprus Internation Trust is established either by a trust deed or by will . It defines a settlor, a trustee and a benefiaciary. The main types of Cyprus trust includs : Deisretionary Trust, Fixed Trusts and Chariable Trusts. The Cyprus Tax Law exempt such trusts from Income Tax, Capital Gain Tax etc. There is no maximum restriction on the duration of Cyprus tursts unless otherwise provded for in the terms of Trust.
The Cyprus Alternative Investment Funds (AIFs) Law allows for three types of AIFs to be established in Cyprus which are as follows:
AIFLNPs has the following legal forms:
AIFs /RAIF has the following legal forms
Undertakings for Collective Investment in Transferable Securities
Undertakings for Collective Investment in Transferable Securities (UCITS) are collective investment schemes, established and authorised under Europen Union framwork.
A UCITS is an undertaking:
The sole object of which is the collective investment of capital raised from the public in transferble securities and /or other liquid financial instruments as referred to in section 40(1) UCI Law
As well as opeating on the principle of risk spreading and
At the request of the investor to redeem or repurchase , directly or indirectly
UCITS can take the following legal forms:
UCITS are considered a safe and transparent investment product due to their liquidity, transparency and risk management.
Funds are subject to the general provision of the Cyprus Tax framwork if they satisfy the criterias of the “managment and control” in Cyprus
In the case of funds which have compartments, each compartment is assessed separately for tax purposes subject to the provisions of the law.
Under circumstances and depending on the legal form of the fund.
There is no Capital Gains Tax on the gains arising from the disposal or redemption of units in funds unless the fund owns immovable property in Cyprus.
However, even if it owns immovable property in Cyprus, no Capital Gains Tax arises if the Fund is listed on a recognized stock exchange.
The subscription, redemption, conversion or transfer of a fund’s units should be exempt from Cyprus
No creation of a permanent establishment
Based on the Cyprus tax legislation no Cyprus permanent establishment will be deemed to arise:
The management fee charged for the provision of collective management services to investment funds is exempt from VAT, provided certain conditions are met.
Carried interest / performance fee for AIF and UCITS fund managers
Certain employees and executives of the following investment fund management companies or internally managed investment funds may opt for a different mode of personal taxation:
Subject to conditions, their variable employment remuneration which is effectively connected to the carried interest of the fund managing entity may, through an annual election, be separately subject to Cyprus tax at the flat rate of 8%, with a minimum tax liability of €10.000 per annum. This special mode of taxation is available for a period of 10 years.