Cyprus: Offshore Legal and Tax Regimes
Forms of Offshore Operation
Offshore entities took the following forms:
- Limited liability company
- General or Limited Partnership
- Offshore Banking Unit (now known as International Banking Units)
- Offshore Financial Services Company
- Offshore Captive Insurance Company
- Shipping Company (Ship)
NB: See above for new rules applying to Cyprus companies from 2003.
Checks are made to exclude undesirable operations, and conditions are usually imposed:
- The entity must be entirely foreign-owned
- The objects of the business and sources of income must be outside Cyprus
- No local borrowing is permitted
- Audited annual accounts must be filed with the Central Bank
- Local payments must be recorded and reported
Anonymity may be achieved by using nominee shareholders; the beneficial owners must be made known to the Central Bank, which is then statute-bound to non-disclosure. NB There is no provision under the law for migration or re-domiciliation.
The expression 'International Business Company' (IBC) simply refers to a duly authorised offshore Limited Liability Company. There are no formal requirements in addition to those in standard Cyprus company law, but the Central Bank recommends a minimum authorised share capital of CY£10,000. This does not have to be paid up, unless the company concerned wants to make use of the import duty concessions described in Tax Treatment of Offshore Operations.