ANDREAS COUCOUNIS & CO LLCANDREAS COUCOUNIS & CO LLCLAWYERS- LEGAL CONSULTANTSLAWYERS- LEGAL CONSULTANTS

www.coucounis.comwww.coucounis.com

The Legal Business of Establishing The Legal Business of Establishing a Company in Cyprusa Company in Cyprus

Moscow, June 2010

Presented byTasos Coucounis

couclaw@spidernet.com.cy

HOW CAN I USE CYPRUS TO HOW CAN I USE CYPRUS TO CARRY OUT MY BUSINESS?CARRY OUT MY BUSINESS?

COMPANYCOMPANY

BRANCH OF A FOREIGN COMPANYBRANCH OF A FOREIGN COMPANY

TRUSTTRUST

INTERNATIONAL PARTNERSHIPINTERNATIONAL PARTNERSHIP

INTERNATIONAL COLLECTIVE INVESTMENT SCHEME INTERNATIONAL COLLECTIVE INVESTMENT SCHEME (“PRIVATE EQUITY FUNDS”)(“PRIVATE EQUITY FUNDS”)

WHY DO WE NEED A COMPANY WHY DO WE NEED A COMPANY STRUCTURE?STRUCTURE?

Flexible & secure form of carrying out a business

Ability for many people to participate in a business through ownership of shares

Avoidance of personal liability

Tax benefits

WHAT IS THE LEGAL WHAT IS THE LEGAL FRAMEWORK?FRAMEWORK?

Legal System: Common Law tradition from UKLegal System: Common Law tradition from UK Companies Law, Cap.113: based on English Companies Law, Cap.113: based on English

Companies Law Act of 1948Companies Law Act of 1948 Private Limited Liability Company & Public Private Limited Liability Company & Public

Limited Liability CompanyLimited Liability Company Amendments to accommodate EU entry in Amendments to accommodate EU entry in

20042004 Case lawCase law Compliance with OECD and EU lawCompliance with OECD and EU law Impressive number of Double Taxation TreatiesImpressive number of Double Taxation Treaties

DOUBLE TAXATION TREATIESDOUBLE TAXATION TREATIESARMENIAAUSTRIABELARUSBELGIUMBULGARIACANADACHINACZECH REP.DENMARKEGYPTFRANCEGERMANYGREECE

HUNGARYINDIAIRELANDITALYKUWAITKYRGYZTAN (CIS)LEBANONMALTAMAURITIUSMOLDOVA (CIS)MONTENEGRONORWAYPOLAND

QATARROMANIARUSSIASAN MARINOSERBIASEYCHELLESSINGAPORESLOVAKIASLOVENIASOUTH AFRICASYRIASWEDENTAJIKISTANTHAILANDUKRAINEUNITED KINGDOMUSAUZBEKISTAN

WHAT TYPE OF ACTIVITY CAN A WHAT TYPE OF ACTIVITY CAN A CYPRIOT COMPANY DO?CYPRIOT COMPANY DO?

•Ship-owning & Ship management Companies•Holding & Investment Companies•Real Estate Companies •Royalty Companies•Dividend Companies•Trading-Invoicing Companies•Finance Companies•Trust Companies•Internet and E-commerce Companies•Insurance Companies

HOW IS A CYPRIOT COMPANY HOW IS A CYPRIOT COMPANY FORMED?FORMED?

““Know Your Client” documentationKnow Your Client” documentation Approval of preferred name or pre-approvedApproval of preferred name or pre-approved Shareholders: private or public Shareholders: private or public

company/nominees: no physical presencecompany/nominees: no physical presence Constitution of company: wide purposes, Constitution of company: wide purposes,

local & international activitieslocal & international activities Articles of AssociationArticles of Association No minimum share capital if private No minimum share capital if private

companycompany

Full-fledged offices

Employment/Resident permits for foreign staff

Company Administration through use of localDirectors

Satisfaction of Management & Control Test

Registered Office/Secretarial Services/Banking

Cypriot Company Advantages: lowest tax rate inEurope/no tax on disposal of shares

HOW DOES A CYPRIOT HOW DOES A CYPRIOT COMPANY OPERATE?COMPANY OPERATE?

Registration with Cypriot Registrar of Companies

Production of Company Constitutional Documents

Local Management & Control

Same tax advantages to the branch as a Cypriot Company

BRANCH OF A BRANCH OF A FOREIGN COMPANYFOREIGN COMPANY

Formed by Non-Residents

Individuals or Companies

Tax Free Activities

INTERNATIONAL INTERNATIONAL PARTNERSHIPPARTNERSHIP

“a legal relationship created inter- vivosor on death of a person, the settlor whenassets have been placed under the controlof a trustee for the benefit of a beneficiaryfor a specific purpose”

International Trusts Law of 1992, Law 69(I)/1992

CYPRUS CYPRUS INTERNATIONAL INTERNATIONAL

TRUSTTRUST

[1] Created by will or document by Settlor

[2] Of benefit to one or more individuals: Beneficiaries

[3] Many types (Express, Discretionary)

[4] Its objects must be certain

[5] Legal ownership of assets to the Trustee

[6] Protector

[7]Stipulation as to governing law

CYPRUS CYPRUS INTERNATIONAL INTERNATIONAL

TRUSTTRUST

Prerequisites:

[1] Settlor (individual, company, partnership) must NOT be resident of Cyprus

[2] At least one of trustees must be Cyprus resident

[3] Beneficiaries must be non Cyprus residents

[4] Trust property cannot include Cyprus immovable property

CYPRUS CYPRUS INTERNATIONAL INTERNATIONAL

TRUSTTRUST

Formality

Stump duty on trust deed (Euro €430 approx.)

Duration

Up to 100 years

CYPRUS CYPRUS INTERNATIONAL INTERNATIONAL

TRUSTTRUST

Tax Treatment:

[1] Income obtained from sources outside Cyprus subject to NO tax

[2] Financial assets NOT subject to inheritance tax

[3] Dividend interest and royalties received by an international business company, exempt from income tax in the hands of the trustee

[4] NO tax on beneficiaries receiving dividend interest and royalties through the trust

CYPRUS CYPRUS INTERNATIONAL INTERNATIONAL

TRUSTTRUST

INTERNATIONAL COLLECTIVE INTERNATIONAL COLLECTIVE INVESTMENT SCHEMESINVESTMENT SCHEMES

Law 47(I)/1999/Framework for operation of equity Law 47(I)/1999/Framework for operation of equity funds from Cyprusfunds from Cyprus

International Fixed or Variable Capital CompanyInternational Fixed or Variable Capital Company International Unit Trust Scheme International Unit Trust Scheme International Investment Limited Liability International Investment Limited Liability

PartnershipPartnership Marketed to general public, experienced investors Marketed to general public, experienced investors

or private individualsor private individuals Investment income collection & Distribution of Investment income collection & Distribution of

profits at zero taxprofits at zero tax Legislative changes/favourable tax treatmentLegislative changes/favourable tax treatment

CYPRUS IS A PLACE CYPRUS IS A PLACE IDEAL FOR BUSINESSIDEAL FOR BUSINESS

Reputable business destinationReputable business destination Competitive International Financial Centre Competitive International Financial Centre

with great potentialwith great potential Business friendly with simple and effective Business friendly with simple and effective

proceduresprocedures Legal tools easy and comprehensive to useLegal tools easy and comprehensive to use Promotion of business, protect assets, earn Promotion of business, protect assets, earn

money without paying it all out in taxesmoney without paying it all out in taxes

ANDREAS COUCOUNIS & CO LLCANDREAS COUCOUNIS & CO LLCLAWYERS- LEGAL CONSULTANTSLAWYERS- LEGAL CONSULTANTS

www.coucounis.comwww.coucounis.com

THANK YOU!

Moscow, June 2010

Presented by

TASOS COUCOUNIScouclaw@spidernet.com.cy