Offshores
The taxation of universal profit of the foreighn-controllable companies depends not on a place of registration, but from a place of their control and management.
The companies of Belize, Panama, BVI, Gibraltar, USA, etc. concern to the classical offshore companies on which in a greater degree action of the international conventions on money-laundering and struggle against terrorism extends, therefore to the companies from this jurisdiction always more guarded attitude and higher degree of the control over fulfilment of bank operations.
The companies of Cyprus controllable from abroad, actually are not the offshore companies in opinion of the European partners and banks and on legal classification concern to on-shore companies. For this reason cost and support of such companies is a little bit more expensive.
For example, creation and year support of the company in Panama constitutes approximately 1600 - 2.000 Euro, in Gibraltar - 2.000 - 2.600 Euro, Hong Kong - from 3.000 Euro that is actually cheaper, than on Cyprus where cost of creation of the company will constitute about 2.000 Euro, and annual support approximately 2.500. However, the important difference of Cyprus in this case is that cost of support includes also annual audit of activity that is not present in offshore jurisdictions. I.e., activity of the Cyprian company is more legitimate and transparent in comparison with other offshore jurisdictions. It is important at construction of business.
The companies registered on Cyprus, but operated and controllable from abroad will come under to the taxation on Cyprus only concerning the profit received from the Cyprian sources. The given companies will be exempted from the tax to foreign dividends and the tax to interest from the capital, and also from the taxation of profit of permanent mission abroad, they can use the foreign tax credit and offset of the losses suffered abroad.
The given companies will be deprived an opportunity to use by protection of agreements on elimination of double taxation, but at the same time to them conditions on information interchange which are a component of such agreements will not be applied. All the above-stated advantages will allow to consider Cyprus as an ideal place for an arrangement of the holding companies with an opportunity, first, to receive dividends from the working companies, free from deducted taxes or taxes are paid under lower rate owing to action of a wide network of agreements on elimination of double taxation or owing to action of the Instruction of EU about the cores and Branches, secondly, received dividends are not assessed with the tax to dividends and the tax to a gain of the capital, thirdly, the holding company can redistribute dividends abroad without occurrence of any taxes in jurisdiction of a finding of holding, that, as a rule, is the challenge.