International Business Company Formation Guide << Prev Contents Next >> Combination of UK non-Resident company and Cyprus Branch for International Investors It is perhaps not widely appreciated that the U.K, which generally levies quite high corporate and individual taxes, can be used by both individuals and corporations as a tax haven. However after recent changes in UK tax law, if a company is resident in the UK and another country with which the UK has a double taxation agreement, with a modern "Tie Breaker" clause, that company can be treated as resident in the other country for all UK tax purposes. The existence of a double tax treaty is essential because the problem of dual residence can only be solved by reference to the provisions of a treaty. In practice any UK company which has its "place of effective management" in a country, such as Cyprus, and which is not centrally managed and controlled in the UK will be non-resident for UK tax purposes. Such a company will only be liable to pay taxes in Cyprus at the rate of 10%. Not all treaties concluded by the UK contain this particular provision. Therefore the choice of location of a UK non-resident company is narrowed down. This choice is further narrowed down by the fact that naturally the company will be looking for a location with favourable tax system and financial infrastructure. Such a choice of location should satisfy the following basic requirements. Low rate of tax Availability of double tax treaties with other countries Freedom from exchange controls The UK registration of any particular company derives substantial commercial advantages and many of our international clients have already taken advantage of it. The shareholders of such companies enjoy the benefits, prestige and reputation associated with UK registered companies. However, when the nature of the business activities of this UK company can be carried out from outside the UK then the company can become non-resident for tax purposes as already described. The Cyprus residency of the UK non-resident company can be easily achieved through the registration of a Cyprus branch of the UK company. Our firm through our associates in the UK can register the UK company and then the Cyprus branch in a period of three weeks. The current cost for the registration of an English Company (31.12.2002) is about 300GBP. The cost for registering the branch in Cyprus with all the nominee fees and services is about 1.600,00 Cyprus Pounds (2.800 Euros). << Prev Contents Next >>

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