Permanent Residency in Cyprus, to a non-EU national, through investment or the purchase of property.

The permanent residency can be achieved by an application under Regulation 6(2) or under Category F. Both have the same effect but have four main differences:

Regulation 6 (2)

• An application takes 2 months to be complete

• To apply you must make a fixed deposit of €30,000 for three years

• You must purchase of new property, not one which is for resale

• Children above 18 can apply for P.R. and they get it for life. The children below 18 at the time of application get residency for life, however, need to renew it when they turn 18

• The parents of the applicant can secure the Permanent residency

Category F

• An application takes 10-12 months
• Under this category you do not have to make any fixed deposit
• Any property either new or for resale is admissible
• Children under 18 when they become 18 lose their P.R. status and they cannot get it later unless they purchase a property and apply separately themselves
• The parents of the applicant cannot secure permanent residency under this category

THE PROCESS TO ACQUIRE PERMANENT RESIDENCY

1) Get in touch with P. KALOPETRIDES & CO. for a tailor made advice on the process for acquiring permanent residency

2) You proceed with the purchase of the property

3) We provide guidance on the documents required and assist with preparation. Moreover we can assist in finding and acquiring the right property and acquiring financing facilities through Cyprus banks.

4) We proceed with the submission of your application, while waiting to process there is no requirement in staying in Cyprus.

5) Once approval is attained, we inform you to plan your visit to Cyprus

6) On your visit to Cyprus, we facilitate the collection of your Permanent Residency card and assist you with all relocation matters.

 
Cyprus boasts an impressive list of double tax treaties

 Along with a favourable tax system these treaties can be fundamental to tax planning and the establishment of a business.
In addition, Cyprus offers impressive infrastructure for businesses and a legal system based on English common law.

 Cyprus living and working environment is unique!

Since Cyprus is a beautiful island, has an excellent climate, low criminal record,
large foreign community and infrastructure to support such a cluster including a good number of foreign speaking schools.
Both air & sea connections and communications are excellent. Greek is the official language however English is widely spoken.
There is availability of high skilled workforce mastering other languages.

 Types of corporate entities

Form a company in Cyprus can take the form of a private or public limited
liability companies by shares and companies limited by
guarantee which are all incorporated pursuant to the Cyprus
Companies Law. A company may also take the form of a European
public limited liability company, more commonly known as Societas
Europaea or SE, or a partnership or a Cyprus Branch of an overseas company.

Cyprus International Trusts are widely used for as an efficient tax planning vehicle

Register a Company in Cyprus

This is a clear and simple process. Contact us for further information.

Tel: +357 22 669017  or contacts us by email P.Kalopetrides & Co.

Cyprus is an internationally renowned shipping centre, which is home to some of the world’s leading names of the global shipping industry. The accession of Cyprus to the European Union in 2004, the tax reform and the government policy, further boosted the reputation and overall image of the Cyprus Flag and the infrastructure of Cyprus Shipping in general.

Cyprus Shipping Sector makes a substantial contribution to the Cypriot economy, with recent figures indicating that shipping accounts to approximately 7% of the country’s GDP. The country’s unique geographical position at the crossroads of three continents, the advanced infrastructure and services, its very attractive shipping taxation system, as well as other competitive advantages make Cyprus the ideal location for ship-owning, ship management, crew management, ship chartering and ancillary shipping related services.

Cyprus’ Shipping Sector present facts are:

• Over 150 ship-owning, ship management, chartering and shipping related companies controlling a merchant fleet of 2,300 vessels with 50 million gross tonnage, while employing approximately 4,500 employees and 55,000 seafarers. More than 1,000 registered vessels with 21 million gross tonnage are registered under the Cyprus flag.
• 10th largest merchant fleet in the world
• 3rd largest merchant fleet in the EU
• Ship management Centre amongst top three in the world
• the largest third party Ship management Centre in the EU Cyprus has an EU-approved “Open Registry” regime with a very wide and legally endorsed Tonnage Tax System (TTS), which has been introduced with the Merchant Shipping Law in 2010, and covers the three main “maritime transport” activities, namely, ship-owning, ship-management (crew and technical management) and chartering.

Ship with Cyprus flag owners fall automatically under the new tonnage tax regime, whereas ship owners of foreign flag ships, charterers and ship managers may opt to be taxed under the tonnage tax system (TTS) under certain conditions.

In addition to the country’s strategic geographical location, Cyprus maintains a wide range of competitive advantages through a high quality maritime cluster, offering efficient and quality services, including:

• The latest EU-approved Tonnage Tax System (TTS) with no direct link to corporate tax;
• Cyprus ship registration competitive costs and fees;
• No crew/officers nationality restrictions;
• 28 Merchant Shipping Bilateral Agreements;
• Signatory to all international maritime conventions on safety, security and pollution prevention;
• Full protection for financiers and mortgagees;
• White List of Paris and Tokyo MOUs. Advantages of the Cyprus Tonnage Tax System (TTS):
• No tax on qualifying shipping activities other than “Tonnage Tax”;
• No tax on shipping profits made from qualifying shipping activities including profits from the sale of qualifying ships;
• No tax on dividends paid out of profits made from qualifying shipping activities;
• No tax on wages or benefits of seafarers on qualifying Cyprus flag ships. Cyprus’ Shipping Sector offers wider industry benefits, which include:
• Approximately 50 Double Tax Avoidance Treaties;
• No estate duty on the inheritance of shares in a ship owning company;
• No stamp duty on ship mortgage deeds or other security documents;
• Efficient, qualitative and reliable services to the shipping industry;
• Strong involvement in international shipping fora (IMO, ILO) and the E.U.

All the above reiterate the enormous potential that the industry enjoys while also highlighting its importance within the Cyprus Economy. To add to these, the existence of word-class deep water natural gas reserves in Cyprus’ Exclusive Economic Zone (EEZ) is bringing new and exciting opportunities, which naturally the Shipping Sector activities will be closely connected to. In addition, with the ongoing energy developments in the neighbouring countries, prospects may be there for Cyprus to become an energy hub in the Eastern Mediterranean.

In any case, Cyprus with its attractive shipping tax regime, competitive registration fees, well-regarded shipping legislation, reputation of safety and maritime expertise, is likely to remain one of the most important and high quality shipping industry clusters worldwide.

Cyprus Ship Registration

Cyprus vessel Registration

Cyprus Flag ship and vessels

A ship may be registered in Cyprus once it fulfils one of the following criteria A) More than half (50%) of the shares of the ship must be owned by Cypriot citizens or by citizens of Member States of the EU or of the European Economic Area who in the instance of not being permanent residents of the Republic will have to appoint an authorised representative in the Republic of Cyprus, or B) The total (100%) of the shares of the ship must be owned by corporations, which operate in accordance with the laws of the Republic and have their registered office in the Republic of Cyprus, or they operate in accordance with the laws of any other EU or EEA Member State and have their registered office, central administration or principal place of business within the European Economic Area or by corporations registered outside the EU or the EEA but controlled by Cypriot citizens or citizens of a Member State. In both of the latter cases, they must have either appointed an authorised representative in Cyprus or the management of the ship must be entrusted in full to a Cypriot or Community ship management company in Cyprus.

Cyprus Yachts and other pleasure crafts may also be registered in Cyprus. Cyprus adopted a maritime safety policy, which focuses on the effective control of ships and the improvement of the quality of the country’s merchant fleet. Furthermore Cyprus enacted an Anti-Piracy Law; a comprehensive and pioneer legislation for the protection of Cyprus ships from piracy and other unlawful acts, including a legal framework allowing and regulating the use of private armed security personnel in high-risk areas.

Register a Cyprus Shipping Company or Register a Ship with Cyprus Flag, Cyprus Yachts registration.

 P. KALOPETRIDES & CO is having a specialized and long experience in the field.  OUR SERVICES include…

Contact us for further information.

Tel: +357 22 669017 or use the email form : P.Kalopetrides & Co.

As from 24th March 2010, the Tonnage Tax System (TTS) was introduced with the Merchant Shipping (Fees & Taxing Provisions) Law 44(I) of 2010 with effect as from 1 January 2010.
The new TTS covers Maritime Transport activities offered in international shipping, namely Ship owning, Ship management (including Crew Management and/or Technical Manage­ment) and Chartering.

The tonnage tax for a qualifying ship owner and charterer is calculated on the net tonnage of a ship in accordance with the rates outlined in the table:

Note 1

The exemption also applies to bare boat charterer of a vessel flying the Cyprus flag under parallel registration.

Note 2

The law grants the exemption provided that the option to register for Tonnage Tax is exercised for all vessels and provided a composition requirement is met: at least 25% (reduced to 10% under conditions) of the net tonnage of the vessels owned or bare boat chartered in.

Note 3

In order to qualify shipmanagers must satisfy the below additional requirements:

·  Maintain a fully-fledged office In Cyprus with personnel sufficient in number and qualification

·  At least 51% of all onshore personnel must be community citizens

·  At least 2/3 pf the total tonnage under management must be managed within the community(any excess of 1/3 is taxed under the corporation tax)

Value Added Tax

Imposition of tax

Value Added Tax is imposed on the supply of all goods and services in Cyprus, on the acquisition of goods from Member States and on the imposition of goods from third countries.

Rates

Standard rate                                                                                                 19%

Reduced rates                                                                                               9%/ 5%

Zero rates                                                                                                      0%

Standard rate

The standard rate applies to the supplies of all goods and services in Cyprus which are not subject to zero rate, the reduced rate or are not exempt.

Reduced rate 9%

Tourist, excursions, interurban bus services, transport of passengers by taxi, supply of food and drinks in a restaurant, catering services, sea transport.

Reduced rate 5%

Books, newspapers, non-bottled water, supply of food, hotel accommodation, rural and tourist buses, supply of medicines, hairdressing, renovation and repairs, entry fees to theaters,circus,festivals,luna parks,concerts,museums etc , acquisition or construction  of residence (subject to conditions)

Zero

Export sales (to countries outside of EU as from 01/05/2004) ship management services. Intra community supplies to EU V.A.T. registered persons.

Exempted

Rental of immovable property, hospital and medical caring services, Postal services, Insurance services, Educational services under certain conditions, financial services (with exceptions), disposal of immovable property where the application for building permission has been submitted prior to 1 May 2004.

Registration

Every individual or company is obliged to register if:

·  at the end of any month, the value of the taxable supplies recorded in the last 12 months exceeds €15.600 or

·  at any point in time the value of the taxable supplies are expected to exceed €15.600 in the next 30 days.

·  provides services to a VAT registered person within European Union with nil registration threshold

·  offers zero rated supplies of goods or services

·  acquires a company on a going concern basis.

·  a taxable person from abroad makes distance sales with registration threshold of €35.000

·  is involved in the acquisition of goods from other EU member states (relates to persons who offer exempt supplies of goods and services or are non for profit organisations) with registration threshold of €10.250

Intra-community trading of goods and services

Businesses that undertake intra-community trading, i.e. Acquisitions and sales of goods and supply of services from/to EU member states need to complete the following forms:

•  Intra-Community Acquisitions: (a)Intrastat-Arrival of goods, (b) Inclusion in the VAT return (on a total basis)

•  Intra-Community Supplies: (a) Intrastat-Departures of goods, (b) Recapitulative statement for supplies of goods and services (VIES form), (c)Inclusion in the VAT return on a total basis

INTRASTAT forms are submitted electronically only to the VAT authorities not later than the tenth (10) days from the end of the related month.

VAT returns

VAT returns are submitted quarterly and the payment of the VAT must be made by the 10th day of the second month that follows the month in which the tax period ends.

VAT  Penalties and interest

Social Insurance Contributions

Social insurance and other contributions are calculated at the following rates on employee’s gross weekly/monthly emoluments.

Limits

The following are the upper limits on employee’s gross emoluments:

Deadline for contribution payments

IMMOVABLE PROPERTY TRANSFER FEES

The transfer fees are paid by the acquirer to the Department of Land and Surveys on transfers of immovable property on values estimated by the Department of Land and Surveys.

Transfers relating to properties that are subject to VAT will be exempt from the above transfer fees and transfers relating to properties that are not subject to VAT will be eligible for 50% exemption from the above transfer fees.

In the case of free transfers of property between the following parties, the transfer fees are calculated on the value of the property as at 1 January 2013 at the following rates:

from parents to children                                     Nil

between spouses                                             0,1%

between third degree relatives                           0,1%

to trustees                                                      €50

No immovable property transfer fees are payable in the case of a qualified reorganization, a qualified loan restructuring or in the context of bankruptcy, liquidation and disposal of mortgaged immovable property by the lender.

CAPITAL GAINS TAX

Capital gains tax is imposed at the rate of 20% on:

• gains from the disposal of immovable property situated in the Republic
• gains from the disposal of shares of companies not listed on a recognised stock exchange which own immovable property situated in Republic. In this case, the gain is calculated exclusively on the basis of the gain from the immovable The value of the immovable property is its market value at the time the shares sold.

The taxable gain is the difference between the sale proceeds and the original cost of the property plus improvements as adjusted for inflation up to the date of disposal on the basis of the consumer price index in Cyprus. If the disposed property was acquired before 1 January 1980 its original cost is deemed to be the value of the property as at 1 January 1980. Any expenditure incurred for the production of the gain e.g. legal fees, is deducted from the sale proceeds. The following expenses however are not deductible:

• Immovable property tax
• Immovable property fees
• Sewerage fees

Lifetime Exemptions to Individuals:

            Gain                                                                                           €

On the disposal of any property                                                   17.086

On the disposal of agricultural land by a farmer                               25.629

On the disposal of own residence (under presumptions)                  85.430

The above exemptions are given only once and not for every disposal.

No individual can claim all three exemptions but can claim one of these exemptions whichever is the higher.

Exemptions

The following disposals of immovable property are not subject to Capital Gains Tax:

• Transfers arising on death.
• Land as well as land with buildings acquired during the period 16 July 2015 – 31 December 2016 provided that the immovable property was acquired through a purchase agreement and not through an exchange or donation, at market value, from a non-related party. The exemption does not apply to disposals of immovable property that have been acquired under foreclosure procedures.
• Gifts between spouses, parents, to children and between relatives up to third degree of kindred.
• Gifts to a company where the company’s shareholders are members of the donor’s family and the shareholders continue to be members of the family for five years after the day if the transfer.
• Gifts by a family company to its shareholders provided such property was originally acquired by the company by way of gift and given that the ownership will remain in the shareholder’s ownership for at least three years.
• Gifts to charities and the Government.
• Transfers as a result of reorganisations.
• Exchange or disposal of immovable property under the Agricultural Land (Consolidation) Laws.
• Transfer of property as a settlement by court decision, between ex-husband and wife.
• Transfer of property of a missing person during the administration of such property.
• Exchange of properties, provided that the whole of the gain made on the exchange has been used to acquire the other property. The gain that is not taxable is deducted from the cost of the new property, i.e. the payment of tax is deferred until the disposal of the new property.

Special Defence Contribution

Special Defence contribution is imposed on dividend income, ‘passive’ interest income and ‘passive’ rental income earned by Cyprus tax residents. Non-tax residents are generally exempt from special contribution for the defence.

The special defence contribution is charged at the rates shown in the table below:

Notes:

1. Dividends received by a Cyprus tax resident company from other Cyprus tax resident companies are excluded from all taxes, unless they are indirectly declared after the lapse of four years from the end of the year in which the profits were generated, in which case they may be subject to Special contribution for defence at 17%.

Dividends which emanate directly or indirectly out of such dividends on which special contribution for defence was previously suffered are exempt.

This exemption does not apply if:

a) more than 50% of the paying company’s activities result directly or indirectly in investment income and

b) the foreign tax is significantly lower than the tax burden in Cyprus. The tax authorities have clarified through a circular that “significantly lower” means an effective tax rate of less than 6,25% on the profit distributed.

When the exemption does not apply, the dividend income is subject to special contribution for defence at the rate of 17%.

2. Such interest income is subject to income tax / corporation tax.

Deemed dividend distribution

A Cyprus tax resident company is deemed to have distributed as a dividend 70% of its after tax (note 1) accounting profits (as adjusted for Special contribution for defence purposes-note 2).

Such a deemed dividend distribution is reduced with payments of actual dividends paid during the relevant year the profits were generated or paid during the two following years.

On the remaining net amount (if any) of deemed dividend 17% Special contribution for defence is imposed to the extent that the ultimate direct/ indirect shareholders of the company are Cyprus tax resident individuals.

When an actual dividend is paid after the deemed dividend distribution date, then if Special contribution for defence is due on such a dividend, the tax is imposed only on the amount of the actual dividend paid which is over and above the dividend that was previously deemed to have been distributed and previously suffered Special contribution for defence.

Notes:

1.    The term ‘’tax’’ in addition to corporation tax includes also the special defence contribution,the capital gains tax and any foreign taxes suffered.

2.    A number of adjustments to the accounting profit are required for deemed distribution purposes, including for tax years 2012, 2013 and 2014 if the company has acquired in those years plant, machinery or buildings (excluding private motor vehicles) for business purposes, the cost of these assets will be deductible against the accounting profits.

Disposal of assets to shareholder at less than market value

When a company disposes of an asset to an individual shareholder or a relative of his up to second degree or his spouse for a consideration less than its market value, the difference between the consideration and the market value will be deemed to have been distributed as a dividend to the shareholder. This provision, does not apply for assets originally gifted to the company by an individual shareholder or a relative of his up to second degree or his spouse.

Company dissolution

The cumulative profits of the last five years prior to the company’s dissolution, which have not been distributed or deemed to have been distributed, will be considered as distributed on dissolution and will be subject to Special contribution for defence at the rate of 17%.

This provision does not hold in the case of dissolution under a Reorganisation.

Reduction of capital

In the case of a reduction of capital of a company, any amounts paid or due to the shareholders over and above the previously paid-in equity will be considered as dividends distributed subject to special defence contribution at the rate of 17% after deducting any amounts which have been deemed as distributable profits.

The above provisions apply only to the extent that the ultimate shareholders (direct or indirect) are Cyprus tax resident individuals.