Types of Offshore Entities in Cyprus An offshore entity in Cyprus is essentially a Cyprus registered business whose object of business and source of income are confined outside the Republic and whose ownership belongs, directly or indirectly, to aliens. A summary of the forms an offshore entity may take in Cyprus along with the corresponding tax advantages is set out below. Offshore Limited Liability Company A Cyprus offshore limited liability company is a corporate entity with limited shareholders' liability. Such an entity must have at least two shareholders and a registered office address in Cyprus and its establishment requires the approval of the Central Bank which requires bank reference for the beneficial shareholders. Details of beneficial owners are confidentially disclosed to the Central Bank only and anonymity is therefore assured. An offshore company is taxed at the rate of 10% on its net income, regardless of where management and control is exercised. Offshore Branch Offshore branches of a company registered outside Cyprus (Overseas company) can be registered in Cyprus upon the approval of the Central Bank which requires bank references for the overseas company. Filing with the Registrar of Companies requires the following documents translated in Greek:
A Cyprus offshore branch is subject to tax at 10% on its net income if managed and controlled in Cyprus. Offshore branches managed and controlled abroad are completely tax exempt Offshore partnerships Offshore partnerships can be easily registered in Cyprus upon the approval of the Central Bank which requires bank references for the partners. An offshore partnership as an entity as well as its partners are totally tax exempt and not subject to exchange control. Offshore trusts A trust or a settlement as it is often called is established by the settlor who transfers into the trust certain property. The settlor then appoints the trustees to hold the trust property for the benefit of the beneficiaries whose rights are defined in the trust deed. Offshore trusts are tax exempt in Cyprus. All income whether trading or otherwise is not taxable in Cyprus. Dividends, interest or any other income received by a trust from a Cyprus offshore company are also neither taxable nor subject to withholding tax. Gains on the disposal of the assets of an offshore trust are not subject to capital gains tax in Cyprus. An offshore trust created for estate duty planning purposes is not subject to estate duty in Cyprus. Also, offshore trusts are not subject to exchange control.
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