Cyprus: an EU Hub for UK businesses
02 September, 2016
Given today's financial and political uncertainties, heavy taxation and the structural problems facing the EU, Cyprus can be utilizes as an EU hub for companies and individuals who wish to base their activities in a tax efficient and cost competitive environment, whilst maintaining or establishing an EU presence.
Cyprus offers many benefits including passporting of its EU membership to its investors as well as being cost competitive and enjoying very low taxes, in comparison to other EU member stated.
The ability to migrate companies to Cyprus opens tax planning dimensions for UK investors and businessmen. UK companies can become tax resident in Cyprus and enjoy the plentiful benefits offered by the Cypriot corporate tax regime. They can also take advantage of a pleasant country which is a financial centre, member of the EU and a fine place to work and live.
It is worth highlighting the following aspects:
- Opportunity for UK companies to establish themselves in the EU, through the "passporting" of Cypriot based entities in the EU including the management companies and many more have chosen the island as their base to operate under the EU umbrella due to the common EU Directives adopted by the island's regulators
- Cyprus has an educated, multilingual work force with a high standard of professional services in areas such as taxation, law, accounting , banking and finance
- UK trading companies engaged in EU trade can relocate to Cyprus without the need to fully restructure. This can be done by transferring assets and liabilities to a newly incorporated Cyprus company followed by a liquidation of the former UK entity
- Cyprus has concluded favourable tax treaties with more than 60 countries including Russia and other east European countries, India, China, etc. Absence of anti avoidance provisions makes a Cypriot company an ideal holding, licensing and investment vehicle.
- Cyprus has a common law legal system which is similar to the one used in the UK listing at ECM, EU's inexpensive stock exchange which enjoys simplified regulatory regime and is relatively not subject to the more rigorous listing requirements and on-going obligations on issuers of securities by more regulated markets
In addition, following the result of the recent UK referendum, the traditional structure of a UK LLP for online businesses may not be able to materialize in the future due to the fact that the UK LLP will lose its EU identity and additional VAT implications will arise for company to company transactions, as it will not fall under to the EU VAT regulation for online businesses ("MOSS").
Consequently, online businesses will need to incorporate an alternative structure using an EU company for trading within the EU.
Cyprus is a viable alternative solution for online businesses acting, either as a collecting agent or as a holding company within an online business EU structure.
If you are considering to redomicile your company to Cyprus, your first step is to arrange a complimentary consultation with us.
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