Cyprus - Remains to
be an ideal hub for
inbound and outbound
Investments
Angelos Gregoriades
Chairman and Head of Tax
7 Ju...
1
©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent
member firms...
2
©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent
member firms...
3
©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent
member firms...
4
©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent
member firms...
5
©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent
member firms...
6
©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent
member firms...
7
©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent
member firms...
8
©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent
member firms...
9
©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent
member firms...
10
©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent
member firm...
11
©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent
member firm...
12
©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent
member firm...
13
©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent
member firm...
14
©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent
member firm...
15
©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent
member firm...
16
©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent
member firm...
©2013 KPMG Limited, a Cyprus limited liability company and a member firm of
the KPMG network of independent member firms a...
Upcoming SlideShare
Loading in...5
×

Angelos Gregoriade. Financial and Commercial Center Cyprus 07.06.2013

203

Published on

Published in: Business, Travel
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
203
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
3
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Angelos Gregoriade. Financial and Commercial Center Cyprus 07.06.2013

  1. 1. Cyprus - Remains to be an ideal hub for inbound and outbound Investments Angelos Gregoriades Chairman and Head of Tax 7 June 2013
  2. 2. 1 ©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Main Messages Questions that have arisen: • How would people react? • How would the economy react? • Will exchange controls be needed to prevent capital flight? • Will the Russians leave the island? • How long will it take before they do so? • How can the economy find alternative ways to reignite its engines?
  3. 3. 2 ©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Main Messages Agreement with the Eurogroup supported by IMF sets out measures for: • Restoring the soundness of the banking sector; • Controlling public finances; • Ensuring sustainable growth.
  4. 4. 3 ©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Current Situation Capital Controls • Branches and Subsidiaries of foreign banks are exempted from the Capital controls for transactions involving foreign investors. • Capital Controls for domestic banks institutions affecting cross-border transactions remains as follows: Transactions that fall within the normal business activity of the customer up to €500.000 per transaction do not require prior approval whereas for amount exceeding €500.000 prior approval is required; Transfers of deposits/funds outside the Republic up to €5.000 per month are allowed regardless of the purpose.
  5. 5. 4 ©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Current Situation The Moneyval/Deloitte Anti-Money Laundering Review for Cyprus concluded that: • Cyprus does NOT engage in money laundering activities; • Cyprus legal framework is fully harmonized with relevant European Union Directives and sometimes goes beyond; • Solid level of Compliance on Customer Due Diligence across the sector; • Very low level of suspicious activity. Out of more than 9,200 cases examined, only 29 circumstances required further investigation; • No indication of a negative re-assessment of Cyprus by Moneyval and there is nothing unique in Cyprus.
  6. 6. 5 ©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Growth Drivers — • Gas Exploration and Exploitation •—Tourism •—EU Funds • International Business
  7. 7. 6 ©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Growth Drivers International business continues to be a driver of growth due to Cyprus competitive advantages.  Market evidence reveals that effects of haircuts on deposits did not trickier a mass exodus of international business because the main pillars of the development of Cyprus as a business centre, which have been the tax, legal and regulatory frameworks and the quality of professional services, have remained fundamentally unchanged.  Opportunities for export of services, other than Russia and Ukraine, in middle East, India and China.
  8. 8. 7 ©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Growth Drivers Reasons for resilience include — Historical, ties with main markets, such as Russia and Ukraine; — More than 20 years of experience in international business; — Well developed and dynamic industry of over 500 organisations supporting international businesses (large accounting firms, legal firms etc.); — Proven and modern Infrastructure for International Businesses;  Tax environment;
  9. 9. 8 ©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The Cyprus Tax System at a Glance Main Features • Taxation is based on Residency status; • 12,5% corporate tax on trading profits as from 1.1.2013; • Interest expense on 100% corporate acquisitions permitted (New!); • Fully reformed IP Regime (New!); • Capital gains on sale of securities: 100% exemption; • Capital gains from the sale of immovable property situated outside Cyprus are tax exempt; • Group relief availability (75% holding); • No withholding tax on outgoing payments (dividends-interest-royalties).
  10. 10. 9 ©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Main Features • Tax free Reorganisations (cross border permitted); • Foreign PE profits exempt; • No thin capitalization rules (no debt to equity ratio); • Tax free corporate re-domiciliation permitted; • Possibility for establishing an SE (European Company); • Applicability of all EU directives; • Advance ruling practice exists; • Extensive and expanding favourable Double Tax Treaty network. The Cyprus Tax System at a Glance
  11. 11. 10 ©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Cyprus Double Tax Treaty Provisions Cyprus with Russia Ukraine Dividend WHT 5% If direct investment of EUR 100.000 Same Interest 0% 2% Royalty 0% 5%/10% Capital Gains Sale of shares ‘’Property-rich’’ companies taxed in both States BUT 4 year period exemption None Limitation of Benefits Applicable ONLY in cases where companies are not incorporated in Cyprus None
  12. 12. 11 ©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Why Cyprus? Russian Outbound Investment  The removal from the Russian ‘’offshore list’’ creates new opportunities for the use of Cyprus as a gateway to Europe, Asia and Africa;  The new opportunities in the Oil and Gas Sector in Cyprus will enable Russian investors to geographically diversify their operations;  Access to the financial markets through the listing of Cyprus holding companies holding Russian investments;  The new updated provisions of the Trust Legislation enhance further the value of Family Trust arrangements;  The access to all EU Directives enable the free flow of investment income to Cyprus from the rest of Europe.
  13. 13. 12 ©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Russian Inbound Investment  As we have seen the Cyprus-Russia Protocol maintains some important beneficial provisions as compared to other recently signed Protocols;  The development of Cyprus as a Funds centre through the introduction of the new EU Funds Directives will encourage and promote foreign investment inflow into Russia;  Approximately 27% (36 out of 132) Cyprus Investment Firms represent Russian Interests mainly active in the area of: • Foreign Exchange Trading; • Asset Management; • Brokerage Services. Serving the Russian investors. Why Cyprus?
  14. 14. 13 ©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. An IP friendly location An IP friendly location for: • Royalty income and gains from the disposal of an IP; • National deduction of 80% from qualifying royalty income reduces tax rate to approx.2.5%; • 5 year amortization of IP acquisition cost further reduces taxable base; • No withholding taxes on royalty payments if IP not used in Cyprus; • Favorable withholding tax on royalties received from aboard; • Access to the Royalties EU Directive so that royalty payments within the same group of companies are tax exempt.
  15. 15. 14 ©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. An IP friendly location A Financing hub • Taxation of interest income as trading profit at 12.5% ; • Financing costs deductible from financing income; • Interest Acquisition Costs deductible; • Margin Availability for back to back loan transactions (max ,35%); • The exemption from taxation of gains from disposal of securities sets a favorable framework for debt restructurings; • No withholding taxes on interest payments; • Favorable withholding tax on interest received from abroad; • Access to the Interest EU Directive so that interest payments within the same group of companies are tax exempt.
  16. 16. 15 ©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Attracting European funds for inbound Russian investments Investment Funds present a credible alternative to Banks and Cyprus has set up the regulatory frame work which is fully compliant to the EU directives • Cyprus poses an ideal hub for attracting funds from EU Investors for inbound investment into the Russian Market due to the fact that Russian fund managers have;  Long dated use of and familiarisation with Cyprus vehicles and with the Cyprus legal framework;  Long dated presence of Russian Asset Managers in Cyprus (e.g. Renaissance, Troika);  Deep Understanding of Russian Clients needs;  Availability of Cost-effective fund administration and asset management services;  Tax efficiency due to the fact that gains from trading in securities are tax exempt.
  17. 17. 16 ©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Thank you ! 16
  18. 18. ©2013 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Cyprus. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. The views and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of KPMG International Cooperative (“KPMG International”) or KPMG member firms.
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×