Cyprus Companies in International Tax Planning International Business Structuring The Cyprus Jurisdiction

One stop shop offering… services that will wow you  International and EU Tax Law. Leaders in tax mitigation solutions.  Accounting/VAT  Auditing  Incorporation of companies in Cyprus and worldwide  Full management and administration of companies  Opening/handling of bank accounts  Applications for citizenships and Cyprus passports  Assistance with the purchase of real estate  All ancillary services

Cyprus the Ideal jurisdiction  The lowest corporate tax rate and low personal tax rates  Tax incentives to foreign citizens  Well developed tax system  Well developed financial sector  Use of double tax treaties  Excellent climate and lifestyle  European standard of living  Ability to create substance A jurisdiction that can offer you the opportunity to triple your investment and create a substantial wealth

Main Advantages of Cyprus  Corporate tax at 12,5%  Exemption of dividend income  Exemption of overseas PE profits  Exemption of profits from disposal of securities  No capital gains tax on disposal of properties  Use of double tax treaties  Use of EU Directives  Unilateral credit relief  Zero withholding taxes.

Tax base “Resident in the Republic of Cyprus” When applied to an individual, is an individual who is present in Cyprus for a period or periods over 183 days in the year of assessment. When applied to a company, means a company whose management and control is exercised in Cyprus.

Tax Base (cont.) “Management and Control” There is no definition in the Cyprus law. Management and control in practice is considered to be exercised in:  The place where the majority of the Board of Directors reside  The place where the majority of the meetings of the Board take place and significant decisions are taken

Double Tax Treaties  Cyprus has an extensive network of Treaties for the Avoidance of Double Taxation  It covers all Central and Eastern Europe, including USA, SA, Russia

Business Structuring

Cyprus Subsidiary Maximum Cyprus tax 12,5% Overseas Shareholder Cyprus corporate tax 12,5%. Nil withholding tax

Holding Companies Ownership of shares / participation interest in group companies: › Accumulation of capital and shareholder value › Reinvestment of capital into new projects › Distribution of profits to shareholders › Consolidation of various business segments › Receiving dividends from operating companies › Asset protection

Tax Planning Ideas  Dividends exempt  No withholding tax on dividends to non resident shareholders  Cyprus treaty network  EU Parent Subsidiary Directive  Result = 0% tax in Cyprus Treaty subsidiary EU subsidiary Holding Company Cyprus Holding Co

Cyprus holding company: capital gains tax mitigation 12 Cyprus holding company Russian Subsidiary 100% shareholding Lebanese Subsidiary Polish Subsidiary Capital gains are exempt Russian Real EstatePolish Real EstateLebanese Real Estate Capital gains are exempt

Cyprus holding company: capital gains tax mitigation  Capital gains realized by a Cyprus holding company upon disposal of shares in a Russian real estate company are not subject to Russian tax  Capital gains realised by a Cyprus holding company upon disposal of shares in a Polish or Lebanese real estate company are subject to neither local tax nor Cyprus tax

Tax Planning Ideas  Use of PE article of DTT network to escape taxation in country of operations  Tax exempt profits in Cyprus  Result = 0% tax Cyprus Company PE Abroad PE’s in treaty countries

Tax Planning Ideas  Profits reduced in operating country  Treaty network use  Small margin taxable in Cyprus at 12,5%  Credit relief for W/T  No withholding taxes on payments out of Cyprus. Cyprus Royalty Co Overseas Licensor Co Operating Co Royalty Company Royalty payable Royalty receivable

Tax Planning Ideas Cyprus company employs staff Charges at cost plus Profits taxable in Cyprus at 12,5% Profits reduced in operating country Employee costs reduced as employees pay less tax and S.I Contributions Employees exempt from tax in Cyprus Cyprus Employment Co Parent Co Operating Co Employment Company

Tax Planning Ideas  Profits reduced in operating country  Use of treaty network  Small margin taxable in Cyprus at 12,5%  Credit relief for W/T  No withholding taxes on payments out of Cyprus. Cyprus Financing Co Haven Co Operating Co Financing Company Interest payable Interest receivable

Tax Planning Ideas  Profit is exempt from tax  Use of double tax treaties  No withholding tax on payments out of Cyprus  Result = 0% tax in Cyprus Cyprus Trading Co Buy securities Sell Securities Trading in Securities

Tax Planning Ideas  Non resident Cyprus registered company  Managed and controlled outside Cyprus  Exempt from tax in Cyprus  Use of EU VAT number and reputation  Result = 0% tax in Cyprus Cyprus Trading Co Buy products Sell products Non Resident Trading Company

Thank you for chosing PHS We assure you that your goals will be achieved simply because you will be ending saving even more money for yourself and your family. Tax = passion