Recapitalization of Bank of Cyprus (30.07.2013)

[su_expand height=”80″ link_color=”#9e872c” link_style=”button” link_align=”right” more_icon=”icon: angle-down” less_icon=”icon: angle-up”]As Central Bank of Cyprus stated this is a significant progress at Bank of Cyprus (BoC) with the completion of the recapitalization and the exit from resolution.

The recapitalization ensures that the BoC well exceeds its minimum capital adequacy ratio. Based on the latest financial information, BoC’s Common Equity Tier 1 ratio is estimated to stand at around 12%.
The Central Bank of Cyprus, Ministry of Finance and representatives of the Troika agreed on the BOC fully recapitalized today by the overall conversion of 47,5% of uninsured deposits into shares in the bank, thus putting an end to a period of uncertainty. This is the final stage of the bank’s resolution process and there will be no further measures under the Resolution Law.
Following the recapitalization, 12% of deposits that were previously blocked will be released (5% in total).
The share structure of BoC will be amended so that all shareholders hold ordinary shares. The new structure will be compliant with the European Capital Requirements Regulation.
The recapitalization of Bank of Cyprus and the output of the resolution regime are important milestones to strengthen the financial position of banks and stabilize Cyprus financial sector, since following such recapitalization Bank of Cyprus starts again its operations on much stronger foundations.

Cyprus Parliament is expected to ratify the DTA Ukraine – Cyprus in September 2013

[su_expand height=”80″ link_color=”#9e872c” link_style=”button” link_align=”right” more_icon=”icon: angle-down” less_icon=”icon: angle-up”]The Double Tax Agreement Ukraine – Cyprus which was ratified by the Ukrainian Parliament on 4 July 2013 remains to be ratified by the Cyprus Parliament.  It is expected to be ratified by the Cyprus Parliament in September 2013.
The new DTA will be applied once Cyprus and Ukraine have exchanged official notices of the ratification. It is expected to be applied 1 January 2014.  Until the new DTA takes force, the 1982 double taxation agreement between Cyprus and the Union of Soviet Socialist Republics (USSR) will continue to apply.
Please follow our news link for updated news

Extension on Levy for Cyprus Company 2013

[su_expand height=”80″ link_color=”#9e872c” link_style=”button” link_align=”right” more_icon=”icon: angle-down” less_icon=”icon: angle-up”]The annual levy of €350 is obligatory for all the Cyprus Companies.  Because many professionals and the general public continue to face difficulties in paying the annual levy of three hundred and fifty euros (€350) due to the restrictive measures on banks, a further extension has been given to be paid until the 31st of July 2013.

  • Companies that stated dormant in 2012 have to pay €350 until 31/07/2013
  • Companies being registered in 2012 have to pay €350 until 31/07/2013
  • Companies that have not informed about dormant status in 2012 or pay the levy have to pay now €500.


Ukraine adopted Double Tax Agreement with Cyprus

[su_expand height=”80″ link_color=”#9e872c” link_style=”button” link_align=”right” more_icon=”icon: angle-down” less_icon=”icon: angle-up”]The preferred tool of Ukrainian business (The convention of the former Soviet Union and Cyprus on the avoidance of double taxation of October 29, 1982) became the legend.
4 July 2013, the Ukrainian Parliament ratified convention between the governments of Ukraine and Cyprus on avoiding double taxation and preventing income tax evasion and its protocol, which were signed in Nicosia, Cyprus, on November 8, 2012. 244 Members of the Parliament supported the decision.
The New DTA will be applicable for taxation of the income beginning from 2014.

Cyprus Investment Sector Remains Strong

No matter what attacks Cyprus is dealing with from the Euro Group, the island remains well on its feet and is turning into a model of new progressive projects that attract sophisticated investors, visitors and tourists.  Such projects are:

These projects boost the economy and create new jobs at a time of a global financial recession.  There is no reason why Cyprus cannot take a giant leap forward to a new economic model and reshape its destiny as progressive, prosperous and secure European nation.

There are a number of factors which need to be considered when choosing the appropriate tax jurisdiction. Our law firm will assist in making the proper decision as we have the expertise and qualified professional legal consultants who are always updated with the latest global economic situations to consult you in developing the proper tax structure.

Tax rate

To choose a specific jurisdiction, the most essential factor to consider is the corporate tax rate. Other than the tax rate, further examination needs to be done to determine what the effective tax rate is after considering aspects such as double-tax treaties between countries, tax exemptions, tax structuring and more in order to reach the actual rate of tax which will apply under a specific tax structure.

  • Cyprus companies are taxed at the rate of 12.5% on profits generated in Cyprus and on worldwide basis.  One of the lowest tax rates in Europe.
  • A Cyprus Holding Company is widely used as an ultimate or intermediate holding company to minimise or eliminate taxes arising on dividend income or gains from the disposal of shares.

Geographic location

Even though technology has advanced and it is possible to operate business remotely using online tools, geographical location is essential when choosing a tax jurisdiction. Certain tax jurisdictions require clients to conduct in-country annual board meetings so it is important to understand the frequency and costs of travel and accommodations expenses.

  • Cyprus is in the center of the Mediterranean Sea located between Europe, Asia and Africa.  Strategic location at the crossroads of three continents which make the country the perfect location and easy access. 

Costs – setup and fees

The formation of a company of a specific jurisdiction and the operation of a tax structure is an essential factor in establishing whether the tax savings achieved are suitable the costs incurred. Service providers in various jurisdictions tend to charge different levels of fees since it depends on the cost of operation in their particular country as well as the range of expertise on offer.

  • Setting up a Cyprus Company costs less than setting up any other company in Europe.
  • Cyprus currently has the highest percentage of citizens of working age who have higher-level education in the EU, therefore, the service is professional.
  • Our firm has qualified lawyers that can assist quickly, efficiently and professionally.

Efficiency and promptness

The ability to quickly establish an operational structure is determined not only by the service provider but it is often an issue of local legislation as well as efficiency of government departments. Especially for a private equity fund which is looking to execute a particular transaction within a short period of time.

  • There are always Cyprus Shelf Companies that you can operate the same day.

Quality of service (tax, legal, fiduciary, banking)

The international tax planning sector is jagged and combines both local performance as well as a number of increasingly international performances. It is often the case that the complexity of a transaction or structure will determine how sophisticated a service provider you need to engage.

  • Our firm provides international fiduciary services, from simple asset protection to complex structures.  Our firm can assist in setting up trust structures for various purposes considering local legislation and international legal aspects.
  • Advising and assisting in the formation of an appropriate business vehicle
  • Acting as Nominee Director and/or Shareholders
  • Acting as Local Non-Executive Directors
  • Providing Registered office address and all related company activities
  • Acting as Company Corporate Secretary

Purpose of tax structure

When a tax structure is established for single investment into a specific jurisdiction, the process for choosing a tax jurisdiction is not the same compared to a tax structure where a long-term personal wealth vehicle is being formed and this will depend on other aspects such as the provision of Private Banking services in a particular jurisdiction as well as confidentiality, and of course double-tax treaties.

  • The Eurozone political economic decisions regarding Marfin Bank (Laiki Bank) was made by Eurogroup and it was politically inevitable.
  • Cyprus has a variety of banks other than Laiki that remain healthy, such as Hellenic Bank, Alpha Bank, Piraeus Bank, National Bank of Greece, Emporiki Bank, FBME Bank, and of course there are many foreign banks in Cyprus as well.
  • You can also open a bank account outside of Cyprus in foreign banks such as: CIM Banque SA, Baltic International Bank, Banque Internationale a Luxembourg SA, Danske Bank, HSBC, UBS, Emirates NBD, ABLV, Maybank International, Rietumu Bank, BOV Bank, Emirates NBD Bank.   Our firm can open a bank account for you anywhere in the world with any bank you prefer that is not listed here.
  • When forming a Cyprus Company there is confidentiality.  The BO can remain fully anonymous by appointing nominee shareholders, directors and a secretary. The interest of the beneficial shareholder can be safeguarded by the issue of a declaration of trust by the nominee in favour of the beneficial shareholder or shareholders. Where nominees are used, the disclosure of the beneficial shareholders or real directors is not a matter of public record, and the names do not need to be disclosed.
  • Cyprus has double tax treaty agreements with more than 47 countries.

Reputation (whitelisted / blacklisted)

The reputation of the specific tax jurisdiction is mandatory. There are various “white-lists” and “black-lists”, depending on your particular viewpoint and it’s a good idea to consider the clarity of the structure.

  •  Cyprus is “white listed” in all the countries it has double tax treaty with.

Recent changes in Cyprus tax laws

On the 18th of April, the Cyprus Parliament voted for new tax laws which are in accordance with the provisions of the loan agreement between EU lenders and Cyprus.

  • Cyprus Corporate Tax Rate increased from 10% to 12.5% effective for the tax year 2013.
  • Defense Contributions on interest income derived from deposits will increase from 15% to 30%.  This will take effect from the announcement in the official gazette of the Republic of Cyprus.
  • Increase on the special bank levy from 0.11% to 0.15%.  This measure will be effective from the tax year 2013.

Even with the small increase of 2.5%, Cyprus remains one of the lowest tax jurisdictions in the EU and the increase does not affect holding companies. Additionally, Cyprus holding company regime such as the tax free flow of dividends through Cyprus and the beneficial exit opportunities offered by Cyprus’s favourable national tax legislation and wide network of double tax agreements remain. Cyprus does not impose capital gains tax, except on gains deriving from real estate in Cyprus.


Мы переехали в новый офис

Мы рады сообщить Вам о том, что наша фирма переехала в новый офис в Лимассоле.

Точный адрес нашего нового офиса следующий:

Nasos A. Kyriakides & Partners LLC

Kyriakides Business Center

67 Spyrou Kyprianou Avenue

4003, Limassol, Cyprus

P.O.Box 53636, 3317, Limassol, Cyprus

Tel:  +357 25 352 352

Fax: +357 25 352 353

Пожалуйста, запишите и сохраните наш новый адрес. Пожалуйста, обращайтесь к нам по телефону или посредством электронной почты за разъяснениями или для получения дальнейшей информации касательно нашего нового месторасположения.
Спасибо Вам всем за сотрудничество.

Cyprus Fiduciary Law – protection to the clients and strengthening the professional sector

The New Legislation on the Regulation of Fiduciaries, Administration Businesses and Role of Company Directors incorporates the provisions of Directive 2005/60/EC into national law, which was passed on the 22 December 2012 and sets a border for the fiduciary industry, as well as the administration of businesses and the role of company directors.
The legislation relates to persons and companies, providing relevant fiduciary and other corporate services relating to the administration and management of trusts and companies in or from Cyprus, including:

  • Directorship and secretarial services provided by a legal person, including acting as an alternative director or secretary;
  • services such as holding of shares of legal persons in a nominee or trustee capacity;
  • provision of  registered office;
  • related to the opening and operating of bank accounts; and
  • Services related to the ownership of financial assets on behalf of third parties.

The crucial objectives of the new legislation are to control the provision of relevant services, to establish and enforce licensing procedures for control and supervision of such services.
The new legislation clearly indicates that relevant services may be offered only by persons which are legal entities that hold a license from Cyprus Securities and Exchange Committee (“CySEC”) on registered law firms, audit firms (and any of their subsidiaries) and licensed financial services institutions who are all exempted from the necessity to obtain such license, the aforementioned exempted are regulated by the Cyprus Bar Association or the ICPAC.  CySEC will maintain a register of license holders and licenses may be issued on such terms and conditions as CySEC considers appropriate.
Criteria to obtain a CySEC licence:

  • Head office must be based in Cyprus;
  • The private individuals, ultimate owners of the company must be fully disclosed and such persons must be considered “fit and proper” by CySEC.
  • It must be represented, administered and managed in Cyprus by at least two qualified capable persons to sensibly manage it.
  • It must employ an in-house legal lawyer or maintain a regular professional relationship with an external lawyer.
  • It must employ a compliance officer, who is approved by CySEC.
  • Regulated service providers must ensure the existence of appropriate internal control procedures in order to ensure that they have accurate, “up to date” information at all times, in compliance with the law.
  • It must employ qualified employees.

CySEC may request at any time that a licence holder should provide any information or documentation that it considers reasonably required for conducting its supervisory role, and in the event of non-cooperation on the part of the licence holder, CySEC may remove and hold any registers, accounts, books, documentation or electronic devices used for the transmission of data for a term of up to 45 days.
Violation of the Law is a criminal offence punishable on conviction by imprisonment of up to five years, or a fine of up to €350,000 or both.  If the offence is committed by a legal entity, then any of its directors, managers or responsible auditors may be personally liable if it is proven that he or she agreed or assisted in the commission of the offence.  CySEC may also impose an administrative fine of up to €500.000 (or up to €1 million for repeat offences), depending on the severity of the offence.
Download Pdf