- Could Cyprus due to its historical ties with UK be very well positioned to take advantage of the BREXIT situation?
- The UK is Cyprus’ second biggest trading recipient, receiving around 7% of Cypriot exports the vast majority of which is in services (approx. 20% of the total amount). Further devaluation of sterling, could possibly make such exports less economical.
- UK-based banks have borrowed in total the equivalent of over 40% of Cypriot GDP and lent to entities in Cyprus an amount equal to more than 30% of GDP.
- Cyprus’ economy is significantly dependent on tourism. Devaluation of sterling will further increase travel costs for British tourists.
BREXIT : the impact on the UK and EU (Cyprus) ” based on data from Bank of England, IMF WEO, Global Counsel calculations.
Source: Global Counsel
However, since triggering of Article 50 sterling has not been affected much, at least not for long periods.
Opportunities lie where UK based Corporations, Banks and other financial institutions (i.e. Funds) seek to implement their Brexit contingency plans.
Seeking to transfer their business or headquarters out of the UK or establish EU subsidiaries/branches which would allow them to continue their EU activities.
Close Links With Cyprus
This can be done through Cyprus; Why:
- Cyprus ranked top for transparency in a recent report by Transparency International, disclosing the most complete set of anti-money laundering (AML) data among 12 major countries.
- The Cyprus AML Law and the Central Bank of Cyprus directive were revised in December 2013 and largely mirror the EU’s Fourth AML Directive.
- Cyprus ranked as one of the fastest growing EU economies (3% growth rate predicted by the Cypriot Ministry of Finance in 2017).
- EU member state compliant with EU laws and regulations and with Historically close links with the UK and with English widely spoken.
- Cost-effective setting up and on-going operational services.
- Access to an extensive network of double tax treaties allowing for tax efficient structuring of investments (60 double tax treaties) and Proximity to some key markets like the Middle East and Eastern Europe.
- Incentives and tax benefits for high-earning mangers and high-net-worth individuals coupled with the most attractive corporate tax regime in the EU .
- Zero tax on dividends and interest income for individuals (including Fund Managers) becoming tax residents.
- Increased flexibility as a number of asset classes can be included in an AIF investment strategy.
- One regulator for CIFs and AIFs, the Cyprus Securities Exchange Committee (CySEC) which provides streamlined procedures and reduced bureaucracy.
- Extensive range of excellent legal and accounting services with Highly qualified professionals and sophisticated infrastructure.
- Full transparency through annual audited reports to CySEC and investors.
Key tax incentives within Cyprus:
- One of the lowest corporation tax rates within the EU at 12.5%
- 0% tax for :
- distribution of dividends to non-tax residents
- dividends received from another company (both local and overseas) under certain conditions
- profits from a permanent establishment under certain conditions
- capital gains tax on gains arising from non-Cyprus sources
- shipping companies for operations in international waters
- tax on International Trusts or their income in Cyprus
- Inheritance tax
- 2.5% on profits tax for trademarks or patents in a Cypriot Resident Company receive income with the Cyprus Intellectual Property Regime.
Setting up a branch of the UK Business in Cyprus Brexit:
As long as your company’s branch/permanent establishment is managed and controlled in Cyprus it can enjoy all the tax benefits as with any other Cyprus legal entity.
The procedure is quick, easy and straight forward.
The UK business can take advantage of the E.U Directives and Regulations along with one of the lowest tax rates in the E.U
Cyprus Cooperate Services Simplified
At MariCorp we target to simplify Corporate Services as a whole and offer our clients a straightforward and simple solution.
Graduated from Liverpool John Moores University in 2011. Became a member of the Institute of Chartered Accountants of England and Wales (ICAEW) in 2015. Currently undergoing Certified Fraud Examiner (CFE) Level 1. Member of the International Tax Planning Association (ITPA).
Marinos is specialized in International Tax Planning, Advanced Consulting, and Corporate Services.