INTRODUCTION

Cyprus has been developed as a significant International Business and financial centre. Since 1977 more than 45,000 permits have been issued for the establishment of international business enterprises in Cyprus. Internatioanl Business enterprises are legal entities established by non-resident, individuals or corporations, for the purpose of conducting business activities outside Cyprus. Management and control of these entities as well as administrative activities relating to their operation overseas can be undertaken in Cyprus. International Business Entities can operate through their administrative office in Cyprus or through the offices of accountants, lawyers or other professionals.

WHY CYPRUS

Cyprus is one of the most attractive places in the world for the establishment of IBC's activities. The generous Tax incentives, the efficient Banking system, the European standard of living, the hospitality, friendliness and the high level of competence of Cypriot people as well as the strategic geographical location and the good social and industrial infrastructure are the main factors for this success. Some of these factors are summarised as follows:

• Cyprus has the lowest tax rate in the European Union, which is 10%

• Cyprus is not a Tax Heaven business centre.

• Cyprus has signed Double Tax Treaties with more than 30 countries all over the world, some of which are very attractive for the international clients.

• Cyprus has a stable tax system regime.

• No tax is deducted in paying dividends out of a company which is directly or indirectly (through nominees) controlled by non residents of Cyprus.

• Profits from the disposal of shares and other securities are fully exempt from corporate taxation. This planning point makes Cyprus an ideal place for holding company establishment.

• Income from dividends is exempted from taxation.

• Cyprus companies are required to submit audited financial statements to income tax authorities and The Registrar of Companies. This requirement enhances the status of the company.

• Cyprus is using the International Financial Reporting Standards (IFRS) and International Standards on Auditing.

• Cyprus is a full E.U. member country.

• Cyprus professional community is very well experienced and organised to serve international clients (accountants and tax experts, lawyers, banks, financial analysts, property developers etc).

• Business transactions in Cyprus are fully allowed.

Geographical position

• Cyprus is located at the crossroads of Europe, Asia and Africa
• at a flying distance of less than three hours from the important centres of Europe, the Middle East and North Africa
• it is convenient time zone in relation to the rest of Europe and the Middle East
• it is a convenient place for transit of goods and between West and East and vice versa

Infrastructure

• low establishment and operational costs
• European standard of living
• competent communication system
• excellent telecommunications
• relatively low cost of living
• modern banking system
• high quality of professional and management services and availability of skilled and unskilled staff at all levels
• a legal system based on English Law
• availability of high standard foreign schools and colleges
• hospitable and friendly Cypriot people
• good industrial relations
• modern and well equipped clinics and hospitals
• accommodation of a high standard at fair cost
• English language widely spoken and used