1. Advantages as International Business Centre

2. Dear Ladies and Gentlemen, The second part of our presentation deals with a company type which in itself provides excellent possibilities. CYPRUS as INTERNATIONAL BUSINESS CENTRE It has been common knowledge for decades that rates of profit tax in Cyprus are extremely attractive. Cyprus has one of the longest history as International Business Centre. Since 1976 Cyprus, as democratic country with free market economy and political stability, has managed to attract more than one hundred thousand foreign investors due to its:  strong legal system based on English common law,  its excellent infrastructure and telecommunications,  very efficient accounting and banking services,  very strategic geographical position between Europe and the Middle East These and many other advantages made Cyprus one of The Most Successful International Business Centres in the World.

3. CYPRUS – EU ACCESSION In May 2004 the Cyprus company took on a whole new complexion, as Cyprus became a full member of the European Union. The country has responded very positively to the changes imposed on the offshore world and re-invested itself as a European International Financial Centre offering the lowest rates of profit tax in EU. The EU accession opened the way for Cyprus companies to be able to act as domestic companies anywhere in a unified market covering 25 countries and 450 million people. Even though the rate of corporate profit tax was increased from 4.25% to 10%, on the whole we can say that Cyprus still has the most beneficial tax climate of all the 27 EU member states. As a full member of the common EU VAT system, Cyprus companies are free to trade from Poland to Portugal without the goods actually having to go anywhere near the island. Cyprus is also very special due to its extensive list of Double Tax Treaty Agreements signed with 40 countries. These and many other advantages make Cyprus Company The Best Vehicle for Business Operations within the EU market.

4. Prior to January 1st 2003, many people, including professional experts,were preparing to "bury"Cyprus, ruling out any possible future development.The reality, however, has made a farce of the pessimists'version, as demonstrated by the number of companies incorporated. In 2004 - 11586 companies were formed, 14494 in 2005 and the figure for 2006 is 20280 companies registered in Cyprus, which, however we look at it, means a rise of 100% in two years, thanks to the increase in tax competition within the EU.

5. Comparison between EU Tax Rates Very few people have probably considered the idea of transferring their business activities, or at least a part of them, to the EU member state which offers the most attractive tax possibilities. However, if you take a clean sheet of paper, and calculate your tax on the last year’s turnover using local tax rates on one side and the Cypriot rates on the other, you will probably come up with very interesting results, particularly in the case of the amount of tax payable in the two different countries.

6. The Advantages of Cyprus Companies  The Cyprus company is a EUROPEAN COMPANY.  ONLY 10% TAX ON PROFIT – the lowest in the EU  DIVIDEND INCOME is EXEMPT from TAX, provided that certain, very reasonable requirements are met  NO WITHHOLDING TAX ON DIVIDENTS paid to non-resident shareholders  PROFIT accumulated from the SALE of SHARES and SECURITIES is EXEMPT from TAX in Cyprus  There is NO CAPITAL GAINS TAX on the SALE of IMMOVABLE PROPERTY not located in Cyprus  DUBLE TAX TREETY AGREEMENTS for the avoidance of double taxation with 40 countries (see table below)  TAXATION on ROYALTY INCOME can be GREATLY REDUCED, particularly if carefully structured with a company located in another low tax jurisdiction  Only 50% of the interest received on loans forms part of the taxable income of a company  Companies are subject to the EU VAT system and a EU VAT number can be easily obtained  IDEAL VECHICLE for TRIANGULAR TRANSACTIONS between the EU states  IDEAL VECHICLE for INVESTMENT PURPOSES (the profit of trading with securities of any kind is free of taxes regardless of the issuing country of the securities)  An IDEAL HOLDING CENTRE for dividends as the foreign source dividends are not part of the profit basis in Cyprus and the dividends paid to non – residents are tax free according to the Cyprus Law. It is especially good for EU subsidiaries (EU Parent Subsidiary Directive)  IDEAL ROYALTY COLLECTOR CENTRE as royalties paid to non – resident companies are tax free if it is a non-Cyprus based intellectual property located in Cyprus. The Cyprus company plays the role of intermediary between EU states and a classical offshore company (BVI, Belize, Seychelles etc.)  Salaries paid to non-resident individuals are tax free in Cyprus  EXCELLENT LEGAL, ACCOUNTING, BANKING SYSTEMS, infrastructure and telecommunications

7. Country DividendsRoyaltiesInterest Rcvd. in CyprusPaid from CyprusRcvd. in CyprusPaid from CyprusRcvd. in CyprusPaid from Cyprus Austria10 nil Belgium10 nil Bulgarianil Canada15 1010 (8)1515 (11) China10 CISnil Czech Rep.10 55 (9)1010 (12) Denmark1010 (1)nil 1010 (13) Egypt15 10 15 France1010 (2)nilnil (10)1010 (13) Germany1515 (3)nilnil (10)1010 (12) Greece25 nil 10 Hungary5 (1)nil 1010 (12) India1515 (2)15 1010 (12) Irelandnil nil (10)nil Italy15nil 10 Kuwait10 55 (9)1010 (12) Malta(4)1510 Mauritiusnil Norwaynilnil (5)nil Poland10 55 Romania10 55 (9)1010 (12) Russia5/10 nil Slovakia10 55 (9)1010 (12) Sweden1510 (1)nil 1010 (12) Syrianilnil (1)1515 (16)10 Thailand10 5/10/15 UK15nil (6)nilnil (10)10 USA5nil (7)nil 1010 (14) Yugoslavia10 Double Tax Treaties

8. Notes: (1)15% if received by a company holding directly less than 25% of the capital (2)15% if received by a company holding directly less than 10% of the capital (3)10% if received by a company holding at least 25% of the capital of the paying company. However, if German corporation tax on distributed profits is lower than that on undistributed profits and the difference between the two rates is 15% or more, the withholding tax is increased from 10% to 27%. In all other cases it is 15%. (4)Withholding tax shall not exceed the tax chargeable on the profits out of which the dividends are paid. (5)5% if received by a company controlling less than 50% of the voting power. (6)If received by a company controlling less than 10% of the voting power, thus entitled to refund of excess ACT deducted in the UK (if it controls more than 10% of the voting power, it is not entitled to the refund). (7)15% if received by a company controlling less than 10% of the voting power. (8)Nil on literary, dramatic, musical or artistic work. (9)Nil for literary, artistic or scientific work, film, and TV royalties. (10)5% on film and TV royalties. (11)Nil if paid to a Government or for export guarantee. (12)Nil if paid to the Government of the other state. (13)Nil if paid to the Government of the other state, in respect of bank loans, in connection with the sale on credit of any industrial, commercial or scientific equipment or any merchandise. (14)Nil if paid to a Government, banks or financial institutions. (15)Nil if royalties are on literary, artistic or scientific work including films, TV films and radio broadcasting. (16)10% on copyright of literary, artistic or scientific work including cinematography films and films or tapes for TV or radio broadcasting.

9. Cyprus company as Holding Center – Dividend Collector OwnershipDividends 100.000 EUR OwnershipDividends 100.000 EUR Shareholder100.000 EUR Bearer Shares- (100) EUR Tax 99.900 EUR The bases of this structure is the EU Parent Subsidiary Directive. On 22 December 2003, the Council adopted Directive 2003/123/EC to broaden the scope and improve the operation of the Council Directive 90/435/EEC on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States. The 1990 Directive was designed to eliminate tax obstacles in the area of profit distributions between groups of companies in the EU by: abolishing withholding taxes on payments of dividends between associated companies of different Member States and preventing double taxation of parent companies on the profits of their subsidiaries. Currently, certain dividends paid by a subsidiary company to its parent company are exempted from withholding tax. This is also the case where the two companies are located in different Member States. The new Directive relaxes the conditions of this exemption. Coming back to our structure based on the EU Parent Subsidiary Directive the EU company will not pay withholding tax on dividends when transferring them to its 100% Cyprus company shareholder. According to the Cyprus Law dividends received from abroad by companies not involved in Investments Activities are tax free. Dividends paid to non-resident shareholders are also exempt from withholding tax in Cyprus, which means that the dividends obtained from the EU company can flow through the Cyprus company in the Seychelles Company (as 100% shareholder of the Cyprus company) without paying any taxes. The corporate Tax in Seychelles is a fixed amount of only 100 USD/year independent on the amount of profit accumulated by the company. The beneficiary can benefit from the accumulated amount in full confidentiality. EU Company Cyprus Company Seychelles Company 0% Withholding Tax on Dividends paid to Non–Resident Shareholders Corporate Tax 100 USD/year 0% Withholding Tax on Dividends

10. The aim of this presentation was To summarise the most important advantages of the Cyprus companies. The experience we have Gained in Cyprus and the business relationships we have built there over the years mean that we can offer our clients a legally workable, financially efficient and economically viable company format in Cyprus. And we can do this in a “ READY TO WEAR ” package offering the MAXIMUM CONVENIENCE and SECURITY, not just at the time of registration, but in the future operation as well. Turning this information to your advantage will prove to be one of the Key Factors in LOWERING COSTS and MAXIMIZING PROFITS.

11. LAVECO LTD. (Cyprus) Contact Person: Adelina Santis Address: Despina Sofia Court, Office 202, United Nations 8, 6042 Larnaca Cyprus Tel: 00357 24 636919 Fax: 00357 24 636920 E-mail: cyprus@laveco.comcyprus@laveco.com Web-site: www.laveco.comwww.laveco.com THANK YOU FOR YOUR KIND ATTENTION If you have any thoughts and questions on this topic, or would like to receive further informational material, please visit our stand number and we will be happy to help you. You can also contact us at: