Through the use of trustee shareholders (i.e. the shares of the company are registered in the names of trustees who hold the shares on behalf of the true owners) and with the appointment of local directors, one could ensure confidentiality and anonymity of the ultimate beneficial shareholders.
Complete Exemption from Exchange Controls and Movement of Capital
An IBE is free to maintain bank accounts in any currency in Cyprus or any other country. Such accounts are not subject to exchange controls. This together with availability of excellent telecommunications and international banking facilities enable the free, speedy and low cost remittance and transfer of funds anywhere in the world.
Favorable tax regime and Treaty Benefits
The many advantageous features of the tax regime of Cyprus which include a low tax rate on profits, no withholding tax on the distribution of such profits to non-residents and Cyprus’ extensive network of double tax treaties make international business entities very efficient tools to minimize tax liabilities on cash flows derived anywhere in the world.
Additionally IBEs which have been established in the Republic of Cyprus and have activities exclusively outside of Cyprus have no obligation to register for VAT (unless the companies will have activities inside E.U.) but can voluntarily do so, if it is to their advantage, provided they satisfy certain criteria.
In contrast to some other international business centers, Cyprus International Business Entities will not suffer from identification with a “tax haven” or “offshore” centre country and therefore are free from the disadvantages associated with such operations. Cyprus’ high level of economic development and the fact that Cyprus new tax system complies fully with the OECD’s mandates and is fully harmonized with the EU’s legal order are all important contributing factors to the establishment of Cyprus as a highly reputable international business centre.
This reputation combined with the high quality of the business infrastructure, low taxation and a wide network of 33 Treaties for the Avoidance of Double Taxation covering all Central and East European countries ( with some very favourable provisions) distinguish Cyprus from the other business centers, especially centers which have opted to operate “zero or low tax” regimes.