routetoCyprus
routetoCyprus
Chrysthia N Papacleovoulou +357 2693 3218 law@papacleovoulou.com Hermione Markides +357 2277 9900 info@markides.com.cy
Yiannos G. Georgiades +357 2281 9292 yiannos.georgiades@gmadvocates.com
Pavlos Aristodemou +357 2582 0020 aristodemou@alycolaw.com
Alecos Markides +357 2277 9900 info@markides.com
Evi Papacleovoulou +357 2693 3218 law@papacleovoulou.com
TAX
International Trade
Intellectual Property
Trusts, Wills & Successions
The accession of Cyprus to the EU and compliance with
The underdeveloped Cypriot economy that was inherited
Cyprus is a democratic country with a free market
Cypriot trusts are effective vehicles for channelling
the OECD requirements against harmful tax practices
from Colonial Rule in 1960, has been transformed into
economy, comprising modern and efficient legal,
income to and from companies in different jurisdictions.
introduced reforms which have greatly enhanced Cyprus’
a modern and robust economy boasting a dynamic
accounting and banking services. The legal framework in
Recent corporation tax changes have placed Cyprus in
competitiveness as an attractive jurisdiction through
range of services and thriving industrial and agricultural
Cyprus allows foreign direct investment in most sectors of
a good position to use companies in conjunction with
which to conduct international business.
sectors, all underpinned by an advanced physical and
the economy, with no exchange controls and freedom
Cypriot offshore trusts.
social infrastructure.
of movement of foreign currency. Such activities have
In addition, the flat corporate tax rate of 10%, which is the lowest in Europe, the favourable provisions on exemption of dividends and the absence of withholding taxes on dividends, interest or royalties paid to non residents has put Cyprus on the map of international tax planning. There are numerous other tax and non-tax rules which make Cyprus an attractive location for a foreign investor, such as group relief, attractive permanent establishment rules, the treatment of foreign taxes as expenses, modern reorganisation and merger rules and the availability of unilateral tax relief. Furthermore, Cyprus has an extensive network of double taxation treaties, some of which are of great use and importance (with Russia, Ukraine, India, the USA and others) while new treaties are currently being negotiated with countries such as Estonia, Finland, the Netherlands, Spain, Malaysia and Morocco. However despite this, professionals in the business community are calling for greater initiatives in achieving new agreements with both EU and non EU countries. In an attempt to assist international companies in better understanding the tax laws of Cyprus and in giving solid grounds on which international businesses should stand, the tax authorities have developed an advanced tax ruling strategy, which has been of paramount importance for companies with substantial operations and in need of certainty as to their tax treatment. One area which needs to be developed further is the issuing of work permits to non EU residents. To the extent possible under EU law, the government is looking towards enacting policies that allow work permits to be granted to non EU residents in the case of substantial investments that would enable further development of the Cypriot economy The negative repercussions of the global economic downturn have so far been substantially milder in Cyprus than in other EU countries. According to Mr Athanasios Orphanides, governor of the Central Bank of Cyprus, this is primarily due to the adoption of the Euro, the diligent banking supervision of the Central Bank of Cyprus and the relatively conservative lending policies of commercial banks, which has largely protected Cyprus against the crisis. The Minister of Finance Charilaos Stavrakis has noted that Cyprus is at an advantage because there have been no investments in ‘toxic products’. Furthermore, the banks depend on household and small and medium enterprise deposits and do not seek loans from other banks to cover their needs, which means there is adequate capital in Cyprus and profitability remains high. Aristodemou Loizides Yiolitis LLC provides personalised services on a specialised level in order to meet the high demands of multinational corporations, a number of which have relied on our firm for tax rulings and tax analysis in Cyprus. As a boutique firm our goal is simple, to maintain a deep knowledge of the areas of law we practice in and to provide a personalised and efficient service to our clients.
126 Corporate INT March 2009
been facilitated by Cyprus’ accession to the European Union Cyprus’ success in the economic sphere is attributed to the adoption of a market oriented economic system, the pursuance of sound macroeconomic policies by the government as well as the existence of a dynamic and flexible entrepreneurial environment and a highly educated labour force. The fact that Cyprus boasts numerous tax incentives, including one of the lowest corporate tax rates in Europe (10%) and double taxation agreements with approximately 43 countries, means that Cyprus is one of the most competitive countries on the international stage. Furthermore, Cyprus’ reputation as a competitive European offshore business centre and its central location at the crossroads of Europe, Asia and Africa, makes the country a prime jurisdiction for the development of international trade links. In addition, Cyprus’ accession to the European Union in 2004 removed any final barriers to trade, thus improving further the provisions for the exchange of capital, goods and services across borders. Fortunately, international trade in Cyprus has not experienced the negative effects of the global economic downturn to the extent that many other countries have, as the advantages that existed prior to the economic crisis are still present. What has changed however, is the outlook of many businesses in Cyprus, who have inevitably become more cautious in their dealing. However, this should not be viewed in a negative manner as businesses continue to establish themselves in Cyprus to take advantage of the jurisdictions many benefits. Our firm is essentially international in outlook with approximately half of our clientele being of international origin. However, we also have a firm foothold in the domestic market, providing an extensive range of legal consultancy services to our Cypriot clients. Our associates have extensive experience in all aspects of international and commercial activity, including cross-border transactions, the incorporation of offshore companies/International Business Companies, trusts, shipping, mergers & acquisitions, joint ventures and international tax planning for companies and individuals, to name a few. Our workforce comprises a range of highly qualified and knowledgeable lawyers, legal consultants and legal assistants who work together to provide flexible and viable solutions to our client’s requirements. Our associates speak a number of different languages, including English, Greek and Russian, which ensures that language barriers are not an issue when working with our international clients. The world of commerce is constantly changing and in order to keep up with our clients’ ever changing needs we strive to follow trends and strengthen our knowledge in order to pinpoint any issues that may affect our clients’ commercial transactions. Our innovative approach to law is shown by our web-based forum, which allows users to post legal enquiries and receive responses written by a member of our legal team who specialises in the relevant area.
in May 2004. The protection of intellectual property (IP) has been significantly improved since the accession of Cyprus into the EU. Cyprus is now in the position to provide effective remedies to combat infringement of intellectual property rights by enacting Law 31(I)/2002, which deals with matters that EU Regulations 1383/2003 and 1891/2004 left at the discretion of the member states. The Cyprus Custom and Excise Department (CCED) applies strictly the above legislations detecting counterfeit goods from entering Cyprus, with commendable results. Established in 1933, Markides, Markides & Co. is one of the oldest law firms in Cyprus. The firm is characterised by a careful blend of regard for tradition and an equally important commitment to exploiting the advances in information technology required by today’s worldwide market place. All of our operations are on-line, ensuring the highest levels of efficiency no matter where our clients may be, and we continuously upgrade our systems to remain in the forefront of innovation. Our partners and lawyers keep up with current developments of the law and regularly attend seminars and conferences abroad to strengthen their expertise and complement their practical experience The firm’s broad reach is a natural evolution of expertise amassed over time as a result of diversification and measured internal growth. Among our most active practice areas today are intellectual property law, competition law, banking law, corporate and commercial law and litigation. Our intellectual property service is unmatched in Cyprus, combining a dedicated, well staffed department, with specialised departments for annuities/renewals and searching and watching. In addition, our investment in technology has helped us to create a unique searching facility in the form of a unique database of trade marks and patents as part of our searching unit that addresses the many obstacles posed by the system at the Registrar of Companies and Official Receiver. All of the lawyers in our IP department are specialised in all aspects of intellectual property law and all auxiliary personnel receive special and continuous training in the IP business. This gives us an immense advantage over other firms in Cyprus. Our IP department undertakes all kinds of work, for both domestic and international clients in relation to trade marks, including registration (national, community, international), renewals, changes of status, conversions, registered users/licences, oppositions and provisional refusals of international registration. In the area of patents we can advise clients when it comes to registration (national, EPC, PCT), national phase - validation, annuities, changes of status and supplementary protection certificates (SPC). We also provide comprehensive advice in relation to industrial designs, e-commerce & domain names, copyright, licensing and IP related litigation.
The International Tax Law 1992 introduced a special set of rules for International Trusts, subject to specific requirements. Taxation of International Trusts is abolished completely and the only tax obligation is a stamp duty on the instrument creating the trust. The gains of an international trust from sources outside the Republic are exempted from all taxes in the Republic and no estate duty is chargeable in respect of assets belonging to the trust. Our law firm is fully acquainted with the new law and has had practical experience applying it. Therefore, we are in a prime position to assist in the creation of international trusts and members of the firm can act as trustees of the trust if required. One of the greatest advantages of the current law in Cyprus is that there is no inheritance tax applicable to movable and immovable property that passes on to the beneficiary in the event of death of the testator. In order to take advantage of this special regime, we often advise individual clients with the drafting of local Cyprus wills to save on their international tax liability. In this area we offer services in relation to resealing and obtaining grant of probate and grant of letters of administration in relation to movable and immovable property in Cyprus and abroad.
we are in a prime position to assist in the creation of international trusts
Founded in 1978, the Law Chambers Nicos Papacleovoulou is an international law firm dedicated to providing professional, effective and decisive legal advice to a wide range of clients. In addition to the work we do with international trusts and wills, we have particular expertise in the areas of property & estate planning, conveyancing, corporate & commercial law, offshore companies, taxation and tax planning, intellectual property, immigration, litigation and European Union law. By combining the expertise of senior partners with the updated knowledge of new recruits, we aim to offer to clients the best advice based on years of experience and the new knowledge of highly academically qualified lawyers. We have also established excellent relationships with reputable legal practices around the world, which is indispensable when working with international clients. Overall, the client base of the firm comprises both individual clients and private and public companies and we aim to provide each with highquality professional legal advice and guidance, in respect of both domestic and international transactions. Emphasis is placed on the fact that the new tax laws of Cyprus are corporate friendly and promote financial services activities throughout the island, since any income deriving from securities is not subject to corporate taxation.
March 2009 Corporate INT 127