We warmly welcome you to our ''lunch seιninar" to discuss in practice the current updates οη International Tax Planning, οn the use of Trusts and the legal framework for Cyprus investments to private clients, following recent domestic
and international changes.
Significant global changes are impacting tax planning and asset protection ίη new and challenging ways. Our leading experts from Taxatelier and Phoebus, Christos Clerides & Associates LLC will provide an opportunity to discuss such topics, drawing from experiences and international case studies.
The main topics to be discussed in the seminar are as follows:
Current updates οη International tax;
Effects οη Tax Planning;
The current status of the use of Trusts; and
The Legal framework for Cyprus investments.
3. CV OF PROFESSOR CHRISTOS CLERIDES
• 1. Born in Nicosia – Cyprus
• 2. Graduated in England, LL.B (Hons) LL.M and Ph.D (Kings College 1981)
• 3. Practicing Law since 1982. Handled more than 500 cases in the Supreme Court of
Cyprus and thousands before the District and lowers Courts.
• 4. Professor of Law teaching since 2008 in the European University and Frederick
University of Cyprus. Head of the Law Department since 2013.
• 5. Litigation advocate with Phoebus, Christos Clerides and Co. Firm set up 1950.
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4. CYPRUS
1. Court system based on the English Common Law and Equity principles, Sound Court
protection: EU Law applicable
2. Cyprus has been a British Colony for most of the 20th Century: Independence 1960
3. English Speaking. Easy communication with all Professionals. Easy to set up a Company
or aTrust or do businesses in Cyprus.
4. In 1974 Cyprus was invaded by Turkey. Part of the north still occupied.
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5. 5. The illegal occupation regime not internationally recognised
6. The Republic of Cyprus entered the EU in May 2004. The accession Treaty suspended for
the occupied part.
7. In the last ten years gas and oil discovered in the Exclusive Economic Zone of Cyprus.
Agreement reached recently between Cyprus, Israel, Greece and Italy for the construction of
an underwater pipeline (East Med) to carry gas/oil to Europe via Greece and Italy despite
Turkish objections that are deemed contrary to international law.
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6. 8. Political climate stable, economy on the rise after the 2013 Banking and Budget crisis.
9. Land development on the rise with high rising buildings 17-32 floors on the increase
in the Capital Nicosia and Limassol Southern Resort, both centres of economic and
business activities. South Western Paphos and South Eastern Larnaca, Aghia Napa,
Paralimni favoured towns for foreign residents and property investment.
10. Stock exchange in operation since about 2000. Dominated by Banking, Insurance,
Construction Companies strictly regulated and controlled by Capital Market Commission
and Stock Exchange Commission.
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7. LITIGATION AND LEGAL SUPPORT
1. Any possible investor in Cyprus will need the support of an experienced law firm
in Litigation and Legal advise.
2. Cyprus Law Firms have set up in parallel service providing branches for overseas
investors regulated for purpose of money laundering activities by the Cyprus Bar
Association.
3. In my experience full confidentiality and lawyer-client privilege is ensured under
the Constitution and the law except in flagrant violations.
4. The Courts will intervene where necessary through a strong system of interim
and perpetual injunctions to protect legitimate business.
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8. 5. The Cyprus legal system is effective despite problems noted in the past few years
for delays. Steps are being taken to tackle the problem through the Assistance of the
EU and English/Irish Experts.
6. Amendments include the appointment of some 24 new Judges amendment of the
Court structure, the Civil procedure rules and the creation of a Commercial Court to
deal with important commercial cases in Nicosia.
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9. INTERNATIONALTRUSTS
• 1. A Cyprus International Trust with settlors and beneficiaries outside Cyprus provides
opportunities for settling property for the family, fencing it from creditors and other
claims, as well as ensuring its administration from Cyprus through trustworthy services.
Tax is payable at source thus in most of the cases CyprusTaxation is not concerned.
• 2. The instrument can be used for the acquisition of foreign assets such as shares, stock,
immovable property.
• 3. Through the vehicle anonymity and privacy ensured together with flexibility with the
settlor and beneficiaries ensuring their best interests.
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10. LAND LAW
• 1. In the late 19th Century and up to mid 20th Ottoman Laws tempered with the English
principles of equity were applicable.
• 2. Since then Law was amended and matter regulated by Cap. 224, Immovable Property
Law. Law is based on a complete and almost full proof registration of all property effected
between 1880 and 1930 through the best efforts of the British Colonialist Leading figure
of which was Lord Kitchener.
• 3. Purchasing property and effecting its transfer is regulated by the Contract Law Cap.149
and the Law relating toTransfers and Mortgages 1962 as amended. Foreigners need
special permit by the Council of Ministers Cap. 109.
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11. 4. Although purchase and transfer of property in the District Land Office where property is
situate does not require the services of a lawyer better seek and obtain them.
5. He is bound to check on the Seller, registrations, charges, mortgages and any problems
involved. A properly drafted contract to be registered in the Land Registry to ensure
specific performance in case of default is essential.
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25. Cyprus Upcoming Industries
1. Innovation and startups
2. Tourism and hospitality
3. Real estate
4. Shipping
5. Filming Industry
6. Education
7. Investment funds
8. Energy
9. Crowdfunding
26. Cyprus is considered to be an ideal location
for establishing:
1. Holding Companies
2. Regional Headquarters
3. Regional Branches and subsidiaries
4. Financing Companies
5. IP Holding companies
6. Shipping companies
7. Investment funds
The International Business activity around the registration of companies has shown stability
and growth since 2015. In 2019 alone, there were 12.781 new companies registered.
27. Company Incorporation
1. Under Companies Law, Cap. 113 which adopted largely identical provisions
with the English Companies Law of 1948.
2. Private Limited Liability Companies (Ltd.)
3. Public Limited Liability Companies (Plc.)
4. No minimum amount for the capital shares required for Private Ltd Co.
5.€25,650 minimum share capital requirement for a Public Limited company.
28. 6. First step is reserving the Company name via application to the Co. Registrar, (3-5
days)
7. Application for Company validation attaching:
- Memorandum and Articles of Association,
- Approval of company name
- Appointment of Director(s) and Secretary and their ID/info
- Address of Registered office in Cyprus
8. This process will usually take in total between 10 and 14 days.
9. For Cypriot Tax Residency, the majority of Directors must be Cypriot nationals
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Company Incorporation
29. Company Shareholders
Shareholders can be both legal entities or natural persons:
The shareholder of a Cypriot company must provide the following information when
registering a company with Company Registrar:
• - the full name,
• - the address,
• - the nationality,
• - the occupation,
• - the number of shares held in the company,
• -memorandum and articles of association if legal person
If the shareholder wishes to remain anonymous, a nominee shareholder may be
appointed.
30. Nominee Shareholders and Directors
1. The registered owner “the nominee”, holds on trust for the benefit of the real
owner “the ultimate beneficial owner“or “UBO“.
2. In this way the UBO may protect his identity since his personal details will not be
available at the public registry.
3. Nominee acts upon instruction of the UBO.
4. The same applies to Nominee Directors.
5.Trust deed terms important.
6. Anonymity ensured by attorney - client privilege.
31. Is the UBO protected from nominees?
1. Matter of prudence and construction.
2. Trust deed - wording and construction of the declaration under which the nominee
declares that he holds the shares for the benefit of the UBO and in possession of the UBO.
3.Service agreement - between service provider or nominee and UBO
4. Original Share Certificates will stay in UBO’s possession. Without the original share
certificates it is not possible to effect a transfer.
5. KYC rules provide an additional safeguard since the UBO will be known, confidentially, by
the bank handling the company accounts and not just the nominees.
6. Transfer of Shares Instrument (signed) - UBO authority to effect transfer of shares
7. Overall, the Cyprus common law legal system provides security and certainty to the
UBOs that their property under trust will be protected.
32. 1. Fencing off and protecting from creditors.
2. Ownership not in public records
3. Can only locate through Court order.
4. May also use nominee directors to take advantage of the Cyprus tax system,
which has an extensive double tax treaty network and offers the low corporate
tax rate of 12.5 percent. (One of the lowest in the EU)
5. Anonymity in actions / purchasing.
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Advantages to the UBO
33. Central UBO Registry
1. In accordance with EU AML Directive a Central UBO Registry has been introduced
in Cypriot AML Laws.
2. Not yet in force.
3. Company Registrar will hold the Central UBO Registry
4. Anti-money laundering authorities will have access to Registry
5. UBO’s Name, month and year of birth
6. Where 25%+ one share, deems to be UBO
34. Mandatory KYC Procedures for Advocate
For the Ultimate Beneficial Owner:
1. Due Diligence Declaration duly completed, dated and signed containing the
personal data of each beneficial owner;
2. Certified true copy of the international passport of each UBO
3. Certified true copy of utility bill confirming UBO’s address not older than 3
months
4. Detailed CV signed by UBO showingQ Education, professional background,
personal information, address, telephone, email, and occupation.
5. Economic Profile of UBO
6. GDPR Consent signed by UBO
The above also apply to UBO’s of trusts.
35. Bank Account Opening Requirements
Regarding Shareholders / UBOs:
1.Certified Copy (apostilled or certified by a notary public) passport
2.Original proof of permanent residential address (recent bill)
3. Recent CV duly signed and dated.
4. Copy of business card.
5. Bank reference letter
6. Tax Residency
7. Tax ID number
8. SKYPE ID
9. Completed Bank Questionnaire
10. Source of UBO’s Wealth