In certain jurisdictions the use of an IBC owning a real estate will minimize or eliminate capital gains taxes, inheritance taxes and income taxes.

For example, if a Cyprus IBC beneficially owned by a UK non-resident, purchased a property in the UK for investment purposes and the property was then later sold on to a third party, the capital gain arising from the transaction would not be subject to UK capital gains tax.

The advantages of a Cyprus non-resident Company are the following:

Capital Gains Tax

Gains from the disposal of immovable property situated outside Cyprus including gains from the disposal of shares in companies which own such immovable property are exempt from capital gains tax in Cyprus.

Dividends Distributed

No withholding tax on dividends distributed to non-resident shareholders of Cyprus Companies.

UK NON-RESIDENT COMPANIES

A company incorporated in a foreign country is considered to be a tax resident of Cyprus if it is managed and controlled in Cyprus . A foreign company to be managed and controlled in Cyprus is expected to have the majority of directors to reside in Cyprus and to hold Board Meetings in Cyprus .

A UK register company managed and controlled from Cyprus and with activities outside UK will not be taxed in the UK but it will be considered a tax resident of Cyprus.

The UK Company will be register in Cyprus with the Registrar of Companies as a foreign company and with the tax authorities as a tax resident of Cyprus .

The advantages of a UK register non-resident Company are the following:

Corporation tax

The profits of the UK non-resident company managed and controlled in Cyprus will be taxed in Cyprus at rate of 12.5% which is amongst the lowest corporate tax rate in the entire European Union. 

Reputation

Take advantage of the UK reputation.

Double Taxation Treaties

Cyprus has concluded tax treaties with more than 40 countries worldwide. A UK register non-resident company managed and controlled in Cyprus can take advantage of the Double Tax Treaties concluded by Cyprus .

CYPRUS NON-RESIDENT COMPANIES

A company incorporated in Cyprus is not considered to be a tax resident of Cyprus if it is not managed and controlled in Cyprus . A Cyprus company not managed and controlled in Cyprus is expected to have the majority of the directors to reside outside Cyprus and to hold Board Meetings outside Cyprus .

Companies incorporated in Cyprus but not tax residents of Cyprus are not subject to taxation in Cyprus unless they have a permanent establishment in Cyprus or they receive rental income from property in Cyprus or they make profits from the sale of Cyprus based real estate.

The advantages of a Cyprus non-resident Company are the following:

Trading Profits

The Cyprus non-resident company can buy and sell worldwide and the profits will be exempt from taxation in Cyprus i.e. zero tax in Cyprus .

Interest income

Interest income from deposits with Cyprus banks will be received without any deductions and with zero tax in Cyprus .

VAT registration

VAT registration in Cyprus , a European Union member country.

Dividends distributed

No withholding tax on dividends distributed to non-resident shareholders of Cyprus Companies.

Interest paid

No withholding tax on interest paid by a Cyprus Company to non-resident creditors.

A Cyprus non-resident company can not take advantage of the Double Tax Treaties concluded by Cyprus .

Contact us for more information on company formation in Cyprus