Cyprus Companies have, throughout the years, been widely used for tax planning and structures.
The beneficial tax regime, that Cyprus has to offer, attracted and still does many foreign investors.
Nevertheless, the significance of substance has been highlighted and is considered to be one of the
most important key factors in establishing that the Cyprus Company is in fact a tax resident of the
Republic. What is essentially subject to scrutiny is the real justification for the existence of a holding
company. The mere fact of having a Company incorporated in Cyprus may not automatically
establish its Cyprus tax residency.
Eurofast, having tax experience in Cyprus and other countries’ tax systems for over 30 years, is able
to provide interested parties with advice on whether substance is required and the level of substance
needed. Each case is examined separately by our dedicated professionals, while our advice has in
numerous times been proven to be very useful and successful.
- Examination of the facts and consultation on whether substance is necessary
- Building Substance:
- Real physical presence in Cyprus by having real office facilities in Cyprus: Small offices of 10 m² – 30 m² at a monthly cost of approx. € 300 – € 1,000.
- Dedicated telephone and fax lines, as well as a post office box
- Registration with the Cypriot Ministry of Labour as an employer
- Assistance on hiring actual personnel to work in the Company’s offices (part-time or full-time)
- Company internet domain registration
- Company website design and provision of dedicated email addresses
- Opening of at least one Cyprus Bank Account, operated by a Cypriot resident, member of the Board of Directors
In accordance with the above, a foremost consideration in order to use Cyprus Companies is substance. However every business structure needs careful analysis in order to establish the necessary level of substance to tailor their needs. Companies should perform a cost/benefit analysis as the necessary actions will vary according to the given situation. Proper advice should be sought from experienced tax planners in this regard.
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