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Why Register a Cyprus Company

An article by Mr. Michalis Economides, CEO | Advocate & Legal Consultant of the International Law Firm Chambersfield Economides Kranos

Business nowadays operates in an interconnected world, without any boundaries or limitations toprotect brands and companies from the merciless competition.

In our era, due totechnological breakthroughs, competition is thriving and multi-attacking companiesand brands from various channels of communication; therefore entrepreneurs findthemselves in the difficult position of searching and finding the mostfavorable path to follow, for the achievement of economies of scales.

Currently, manyentrepreneurs are in the process of searching various ways on how they can maximise their productivity and enhance their profitability by minimising theiroperational costs. One of the main scenarios they examine, due to its endless possibilities, is the reincorporation or re domiciliation of theirbusiness activities in favorable markets. Even though this practice is verycommon, entrepreneurs should cautiously consider their options, since this pathcan be very costly, multifaceted and time consuming.

Consequently, when entrepreneurs decide to pursue this course of action not only do they have toprepare their business plan but they also have to include the nature of activities and purposes of their company and simultaneously proceed with thepolitical, economical, social and technological environment analysis of the target market.

Additionally, they should examine important economical parameters of the targeted country such asthe taxation regime scheme, processing time of company formation or redomiciliation and the terms and conditions of the exchange regulations, as well as, the transaction flexibility, assets, personal information protection andrequirements for opening corporate bank accounts etc.

In summary, entrepreneurs should thoroughly assess the business law frame work under which their company will operate.

Even though various countries are renowned for their favorable tax regime scheme, Cyprus is considered to be one of the most reputable and strongest jurisdictions for many types of company formation, incorporation, trusts and investment offering oneof the lowest corporate tax rates in Europe.

Cyprus is a country island situated in the Eastern Mediterranean area, at the heart of three continents; Europe, Africa and Asia thus rendering it a favourable choice.

It is a full member ofthe European Community and completely aligned with the EU regulations. Itscurrency is Euro and the official language is Greek while English is spoken by almost everyone and Russian by a significant percentage of the population.

In addition, Cyprus hasone of the lowest crime rates in the world. It has an excellent transportation structure and infrastructure that support the entire spectrum of business activities which take place on the island. It has a trustworthy and advanced private banking and medical system. Cypriot people are well mannered and are famous for their hospitality.

The Legal System of Cyprus is based on Common Law. Its economy operates based upon an open,market driven principle, with favorable tax regimes for the incorporation ofcompanies and investments. Moreover, Cyprus is characterised by a high percapita income and renowned as a European Union centre for foreign investments,offshore businesses and activities.

Also, it is important tonote that the Government authorities of Cyprus are promoting heavily theincorporation and foreign investments, as well as, allowing the purchase/ownership of property under favorable conditions.

Consequently, Cyprus Government authorities engage in non – stop negotiations for forming double taxation treaties with non European countries, in order for the Cypriot active companies to enjoy an important competitive advantage. Currently, Cyprus is an affiliate to more than 50 double taxation treaties based on the OECD including the EU, China, India, Kuwait, Russia, Singapore, Thailand, USA, Azerbaijan,Lebanon, UAE, Georgia and other important hub countries.

Furthermore, otherimportant advantages of Cyprus are the low corporation tax rate, the very shorttime frame for company registration, as well as, the low annual maintenancefees of corporations. Cyprus offers one of the lowest corporation tax rates inthe EU, which is 12.5%. The time frame for the registration of a new company is very short, approximately 7-9 days.

Hence, Cyprus allows theuse of nominee Directors, Secretary and Shareholders therefore there is noobligation of exposure of the Ultimate Beneficial Owner (UBO) in the publicCompany Registrar Record. Anonymity rights are fully safeguarded and there isno need for the owner to be present during the process of the incorporation oropening of a corporate bank account. Bank accounts can open between 2 – 5 working days with full online electronic banking and digital pass as well as adebit card.

Cyprus is considered tobe the most well-known EU country for offshore company formation and Trusts.The Cyprus International Trusts are exempted from income tax, capital gainstax, special contribution or any other taxes. Additionally, there is no estateduty or inheritance tax in Cyprus, there is flexibility for relocation, thereis no exchange control regulation and trusts can operate internationally withno disposal tax of securities. Thus, there are no withholding taxes ondividend payments, interest or royalties to non residents (subject toconditions).

In addition, the profits from the sale of shares in the stock exchange are tax free, whereas, the lossesof a company can be carried forward opposed to future profits for an indefinite period. Besides those very important advantages, Cyprus is also offering the Group relief option, whereby the loss of one company can be covered by theprofits of another since both of them are under the Cyprus residential taxscheme.

Moreover, CyprusPermanent Residence and Citizenship Schemes are considered to be one of the strongest in the world since they provide several significant benefits to theinvestors, as well as, an advantageous flexibility towards the investors thatare reside in non EU member states, which includes, their family members under18 years old as well.

To sum up, Cyprus tax law is characterised by its simplicity,straight forward approach and effectiveness. Subsequently, entrepreneurs should consider Cyprus as a favorable market for incorporation or re -domiciliation of their business activities, since their companies will enjoyinstantly, among other important advantages, low corporate taxation rates andannual maintenance corporation costs.

In addition,entrepreneurs will have the option of forming an offshore company or a trust soas to protect their assets, companies’ strategies and personal information byenjoying a very beneficial taxation regime with no exchange control regulationthat would limit international operation.

Justifiably, Cyprus isconsidered to be an EU Tax Heaven island country. Cyprus companies enjoy safety, stability and flexibility, as well as, overall low tax rates whilehaving the opportunity to trade not only in the EU but in other countries byenjoying the advantages of over 50 double taxation treaties.

Cyprus is globally an ideal investment and incorporation gateway, offering to theinvestors a market right of entry to more than 500 million EU citizens, the Middle East and China.

Michalis Economides continues partnership with global network

We are honored to have Chambersfield Economides Kranos’ CEO, Michalis Economides, on board as our exclusively recommended Full Service Law expert in Cyprus.

Michalis Economides said: “As a law firm we feel very proud and excited for the recognition of our law firm’s accomplishments. Our law firm will continue to focus on providing individuals and corporate entities with tailor made solutions and strategies, with the aim of identifying potential risks.”

Chambersfield Economides Kranos deals with all practice areas regarding all multi-jurisdictional issues, with the aim of consistently exceeding customers’ expectations. The law firm is present in more than 9 countries and provides fiduciary and corporate services in more than 21 countries globally.

Furthermore, Chambersfield Economides Kranos via its subsidiary firm GFA TRUST provides a full spectrum of Corporate and Commercial Services such as Company Formation, Administration, Nominee – Fiduciary, Re – Domiciliation, Mergers & Acquisitions, Escrow, Opening of Bank Accounts, Incorporation of Foundations, Formation of Funds, Dealing with Contracts, Commercial Dispute Resolution, Commercial Negotiations, Settlement Agreements, and many other complex Legal and Business issues.

If you would like to find out more information, please visit https://eklawyers.com/

The Beginning of a New Era to Personal Data protection

Following four years of debate, the (EU) 2016/679 regulation of the European Parliament and Council of the 27th of April 2016, is enforced.

The regulation refers to the protection of individuals, concerning the process of their personal data, as well as, the free exchange of those data (General Regulation for Data Protection).

The regulation of the 27th of April 2016 (having a two-year harmonization period) entered into force on the 25th of May 2018.

The aforementioned regulation replaced the Directive 95/46 / EC, the provisions of which were transferred to the 2001 Personal Data Processing (Protection of Individuals) Law (Law 138 (I) / 2001).

The regulation, unlike the Directive, ensures a high level of harmonization and it is directly applicable to all European Member States.

The protection of natural persons, in regard to the processing of their personal data, it is a fundamental right. The Article 8 (1) of the Charter of Fundamental Rights of the European Union and Article 16 (1) of the treaty for the operation of the European Union (TFEU), specify that every person has the right to protect its personal data.

The worldwide integration and rapid development of the data processing, as well as, the functioning of a global market, have resulted in an unparalleled increase flow of data collection, processing and cross-border exchange, from both private companies and public authorities.

Target

The Regulation aims the uniformity and decisive protection of the privacy, of the citizens of the European Union. This requirement ascended, due to the intense daily increasing trend of personal data exchange, worldwide, which in many cases was subject to violations of the personal data of individuals.

Interpretation of Definitions

According to the provisions of the Regulation, “personal data” is defined as the data and any kind of information that directly or indirectly identify an individual. This information may relate to his / her private, professional and / or personal life.

The processing of personal data, in accordance with the Article 4 (2) of the Regulation, indicates that any act or series of operations carried out with or without the use of automated means, such as: collecting, recording, organizing, structuring, storing, adapting or modifying, recovering, searching of information, using, disclosing by transmission, distributing or any other form of supplying, associating or combining, restraining, removing or destructing of data.

“Controller” is the natural or legal person, public authority, service or any other body that defines the purposes and manners of processing personal data.

“Processor” is the natural or legal person, public authority, service or any other entity, which process the personal data on behalf of the controller.

Basic Principles of the Regulation

The basic principle of the Regulation is the harmonization and introduction of a set of data protection standards, which will apply uniformly, throughout the European Union.

Undoubtedly, one of the biggest changes in the regulatory field of personal data protection derives mainly, from the extended jurisdiction of the Regulation, in all the European member states. The Regulation applies to all companies and organizations, which process personal data of people residing in the European Union, irrespective of the company’s registered office location.

Additionally, the Regulation refers to all private and public enterprises, as well as, government authorities that collect, process and generally manage personal data of customers, employees, associates or other natural persons, which are European citizens.

In summary, the new Regulation applies to all businesses that process personal data of European citizens, regardless of their location (inside and outside the European Union).

Moreover, an equally important characteristic of the Regulation is to introduce and strengthen the rights of individuals, whose personal data are being processed.

Additionally, it is notable to mention that the new Regulation introduced new obligations to businesses on the way they process personal data.

In fact, the Regulation is significantly increases the obligations of all entities that manage personal data of European citizens.

Severe amount penalties, according to Article 83 of the Regulation will be imposed to offenders, with fines ranging from €10,000,000 to €20,000,000 or from 2% to 4% of the total annual global turnover of the previous business year of a business (applies to whichever is the higher). The fines will be applied according to the nature of the violation. Hence, the heavier fines will be exercised for breaches concerning the basic principles of the Regulation, related to data processing, data transfer in a third country without the consent of the individual and to the non-compliance with an order or limitation of the data processing, imposed by the supervisory authority.

Decisions, which are issued by the supervising authorities, in the context of the fine exercise power, will be subject to appeal before the Administrative Court on the basis of Article 146 of the Constitution.

Furthermore, another important fact of the Regulation is to strengthen the existing principles governing the processing of personal data, and according to Article 5 of the Regulation, they state that personal data must:

  • Be subjected to legitimate and lawful processing with a clear purpose (lawfulness, fairness and transparency).
  • Be collected for specified, explicit and legitimate purposes, and, not to be further processed in a manner incompatible with those purposes (purpose limitation).
  • Be appropriate, relevant and limited to what is necessary for the purposes for which they are processed (data minimization).
  • Be accurate and proceed with all reasonable steps to immediately delete or correct personal data that is inaccurate (accuracy).
  • Be stored, only for as long as it is required for the purposes of the processing of personal data and on the basis of the applicable legal requirements of each organization (storage period limitation).
  • Be processed in a manner that assures the appropriate security of personal data, including the protection against unauthorized or unlawful processing, loss, destruction or deterioration, using appropriate technical or organizational measures (integrity and confidentiality)
  • Entities collecting and processing personal data are responsible and must be able, at all times, to demonstrate compliance with all the principles governing the processing of personal data (accountability).

Rights of individuals

The Regulation based on the structure of the existing legislative framework, strengthens the rights deriving from the 1995 Directive and introduces new rights and obligations.

Indicative is the explicit legislative fortification of the “right to be forgotten”, which is the right that allows the individual to maintain control of his / her personal information, mainly in the cyberspace.

The imperative rights of individuals, whose personal data are being processed, are:

  • The right to object at any time, to the processing of their personal data.
  • The right to transfer the data that are based on their consent, on receiving or requesting the transfer of their data from one company to another.
  • Right to the information.
  • Right to access the data.
  • Right to correct the data.
  • The right to “be forgotten” or delete the personal data.
  • The right to limit the processing of date, when the accuracy of the data is in dispute or is illegal or when the company no longer needs those data.

If you would like to find out more information, please visit: https://www.eklawyers.com/