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Nevis vs Gibraltar which is better for business

Nevis vs Gibraltar: which is better for business?

Nevis vs Gibraltar: which is better for business?

We’ve compared business conditions in Saint Kitts and Nevis and Gibraltar. Find out which one offers better benefits and is more suitable for you.

Saint Kitts and Nevis

There are a lot of advantages of incorporating a company in Nevis. Firstly, the owners can be of any nationality and can appoint third parties as management.

Moreover, an LLC is a great structure for a joint venture and can help you simplify taxes if you declare the earnings as personal income.

Nevis offers a high level of protection and privacy because the information of the managers is only available for the registry. Since they don’t appear on public records, members can keep their identities safe.

Also, the incorporation process here is quite easy and has minimal red tape.

Gibraltar

If you want to register your business in Gibraltar, you can do it as a non-resident company which you can create if shareholders and directors don’t live in Gibraltar. As long as the company doesn’t conduct business inside the country, you will have tax benefits. This includes exemptions on interests or dividends paid to a non-resident. Local companies, on the other hand, must pay a 10% income tax and get a license to operate domestically.

In Gibraltar, you must present your reports each financial year which ends on March 31st, but you don’t have to audit them.

Which country offers more benefits?

Maintenance:
In both jurisdictions, you have to keep financial records available at all times and submit a tax return. For Gibraltar, auditing is not a requirement. In this regard, both jurisdictions are quite flexible.

Incorporation:
In a nutshell, the process is much simpler in Nevis. You can have your company running within a period from 3 to 7 days after submitting forms and documents. The good news is that you can incorporate only by sending digital copies.

Prices:
Fees for companies are lower in Nevis as well.

Privacy:
Both countries are very safe in terms of security and privacy. When it comes to Nevis, here the names of the people involved with the company will be kept 100% private unless there’s a reasonable suspicion of fraudulent activity. Names of members or shareholders are not included in the articles of incorporation, moreover, this information about the members is held only by the corporate registry and agent.

The above is for informative purposes only. Further professional advice should be sought for each particular case. Our firm does not accept any responsibility for any loss or damage occurring by acting on the basis of this information.

New legislation for SVG forex companies

New legislation for SVG FOREX companies

New legislation for SVG forex companies

Please note that St. Vincent and the Grenadines Financial Services Authority (SVGFSA) recently adopted a new policy. According to the memorandum published on January 6, 2023 on their official website, the following requirements are introduced:

Companies wishing to engage in FOREX business must provide a certified copy of the requisite licenses/approval from the jurisdiction(s)/authorities where their business activities will be conducted upon the submission of an application to be incorporated or formed in SVG. An application will be rejected if no such evidence is provided.

A transitional period of forty-five (45) days until March 10, 2023 will be granted to existing companies, within which to provide the FSA with a certified copy of the requisite licenses from the jurisdiction(s)/authorities in which their business activities are being conducted. No filing fees will be incurred for these filings.

In other words, all companies currently engaged in FOREX Business Activity must provide to the FSA, via its registered agent, certified copies of requisite licenses/approval from the jurisdictions(s)/authorities where their business activities are conducted.

The required licenses/approval documents shall be submitted to the FSA SVG by March 10, 2023. This decision was taken after a sharp increase in the frequency and number of complaints and allegations of fraud against SVG entities engaging in FOREX business activity. Failure to adhere to these requirements will result in the application of sanctions against the relevant companies.

We offer a solution

After these changes, we understand your need to find alternatives to continue the operation of your Forex business outside of St. Vincent and the Grenadines.

We can facilitate either re-domiciliation of your SVG Forex entity to St. Kitts & Nevis or the incorporation of a Nevis entity (IBC or LLC) where Forex is NOT licensed but an entity cannot promote itself as a licensed forex entity within or outside of Nevis. We will assist you in preparing all the necessary forms and ensure all documents are in order.

The above is for informative purposes only. Further professional advice should be sought for each particular case. Our firm does not accept any responsibility for any loss or damage occurring by acting on the basis of this information.

How to open a company in Cyprus

How to open a company in Cyprus

How to open a company in Cyprus

Establishing a virtual office

Establishing a virtual office is suitable for small companies. This might be the right way for you if you need to fulfill substance company requirements in Cyprus but don’t have a large budget to spend. They can be in compliance while reducing their costs. A virtual office comes with some perks like complementary use of a conference area or a private office.

Establishing a physical office

The other option is to rent a physical space. In this case, your possibilities become wider since you can meet clients and access  required technology. There are also agreements that provide flexible leasing and short-term contracts.

Benefits of establishing an office in Cyprus

Cyprus economy is one of the freest in the EU. On top of that establishing an office, whether virtual or physical, you’ll have the following advantages:

  • Being in compliance with the company requirements in Cyprus and the OECD regulations.
  • Being in compliance with Article 5 of the Model Treaty.
  • Being in compliance with law 118 from the Cyprus income tax legislation.
  • Cutting down expenses by leasing flexibly or establishing a virtual office.
  • You don’t have to invest in real estate property.
  • There are deals where you don’t have to pay a deposit in advance for renting an office space.
  • In many cases you can cancel the agreement as long as you give 30 days’ notice.

Advantages of registration your company in Cyprus

  • Strategic location near the Middle East and North Africa.
  • A vibrant business environment with a wide use of English language.
  • The corporate rate is only 12.5% of profit before tax, being one of the lowest percentages of the EU.
  • Cyprus doesn’t apply withholding tax on dividends paid to non-residents.
  • You can get your VAT number in only 2-5 business days.
  • No taxes on capital gains.*
  • No taxes on employees’ salaries outside of Cyprus.*
  • Treaties to avoid double taxation with over 50 countries including Spain and the United Kingdom.
  • Dividends derived from income are totally exempt from taxes.
  • Companies in Cyprus accept income from jurisdictions like Seychelles, Belize, the BVI, Panama, and Costa Rica.*
  • Bank accounts in Cyprus are accepted by major online payment platforms like PayPal.

*for details and exemptions please contact us

Cyprus company registration step by step

  1. Fill out the form of company formation provided by your lawyer and sign it.
  2. Provide a notarized copy of the passport for all the persons involved in the company.
  3. Provide a recent utility bill for every natural person involved in the company. It must not be older than three months.
  4. Provide a bank reference letter which must be original and not older than three months. They must be issued in the name of each of the natural persons involved.
  5. Provide a detailed CV for each UBO.

Timelines

Getting the company name approved and preparing the documents for the registry approximately take one week each. However, keep in mind that timelines may change depending on the authorities’ response.

The above is for informative purposes only. Further professional advice should be sought for each particular case. Our firm does not accept any responsibility for any loss or damage occurring by acting on the basis of this information.

Second provisional tax instalment for 2022

Second provisional tax instalment for 2022

Second provisional tax instalment for 2022

We would like to remind you that the 31st of December 2022 is the submission deadline for a revised (where needed) provisional tax calculation for 2022 and the payment deadline for the second provisional tax instalment for 2022.

Provisional tax payment obligation

The following should re-consider whether they should submit a provisional/temporary tax calculation and pay provisional tax:

  • Individuals with taxable income other than salaries, pensions, dividends and interest, and
  • Companies with taxable income.

Payment of the second provisional tax instalment (assuming no revision)

A taxpayer can pay the second provisional tax instalment (as per the initial provisional tax calculation), within one month from the payment deadline (i.e. until 31 January 2023) without interest or penalties.

The timely payment of the second provisional tax instalment can be made via using the unique Payment Reference Number (PRN) made available by the Tax Portal of the Tax Department (TD). Such PRN should be automatically created following the payment of the first provisional tax instalment.

Late payment of provisional tax can only be made via online banking and will also be subject to interest at the current rate of 1,75% per annum plus a 5% penalty on the tax due. An additional penalty of 5% may be imposed by the TD, if the tax remains unpaid two months after the above due date.

Option to revise provisional tax calculation and payment of remaining provisional tax due

In case of a downwards revision of the provisional taxable income declared, any outstanding provisional tax can be settled until 31 January 2023 without interest or penalties.

In case of an upward revision of the provisional taxable income declared, the additional amount of the first provisional tax instalment will need to be settled until 31 December 2022 with interest at 1,75% per annum applicable on late payments and imposed for each complete month of delay. The amount of the second provisional tax instalment can be settled until 31 January 2023 without interest or penalties.

In case of a downward revision, forms T.D.5 (Individuals) and T.D.6 (Companies) should be sent to the local District Tax Collection Offices via e-mail.

Imposition of 10% additional tax if final tax is underestimated

Taxpayers are reminded that where the provisional taxable income declared is less than 75% of the final taxable income for the year, an additional tax is imposed, equal to 10% of the difference between the final tax due and the provisional tax paid.

It is important to note that as per Circular 54, for employees and pensioners whose emoluments are higher than their other income and they have paid the tax which relates to at least 75% of the total income through withholding by the employer (under the PAYE system), the additional tax of 10% is not imposed.

The above is for informative purposes only. Further professional advice should be sought for each particular case. Our firm does not accept any responsibility for any loss or damage occurring by acting on the basis of this information.

NON-COOPERATIVE JURISDICTIONS FOR TAX PURPOSES

NEW ADDITIONS TO THE EU LIST OF NON-COOPERATIVE JURISDICTIONS FOR TAX PURPOSES

NEW ADDITIONS TO THE EU LIST OF NON-COOPERATIVE JURISDICTIONS FOR TAX PURPOSES

On 14 February 2023 the EU decided to add four more countries to the EU list of non-cooperative jurisdictions for tax purposes. The goal is to promote fair tax competition and deal with harmful tax practices. These countries are: British Virgin Islands, Marshall Islands, Cost Rica, and Russia.

The complete list now comprises the following jurisdictions:

  • American Samoa
  • Anguilla
  • Bahamas
  • British Virgin Islands
  • Costa Rica
  • Fiji
  • Guam
  • Marshall Islands
  • Palau
  • Panama
  • Russia
  • Samoa

HOW THAT AFFECTS COMPANIES REGISTERED IN CYPRUS

This inclusion will affect Cyprus Companies in relation to their DAC6 reporting.

Cross-border arrangements with an associated enterprise with tax residence in the above-mentioned list will be considered reportable arrangements under hallmark C1bii – “Arrangements that involve deductible cross-border transactions between associated enterprises in cases where the recipient is resident for tax purposes in a jurisdiction which is assessed as non-cooperative by the EU or OECD”.

The Main Benefit Test (MBT) is irrelevant to this hallmark. Therefore, all cross-border arrangements that relate to tax deductible transactions will be considered as reportable. The report must be submitted within the strict deadlines of the law otherwise heave penalties apply.

WITHHOLDING TAXES ON OUTBOUNF DIVIDEND, INTEREST AND ROYALTY PAYMENTS

Cyprus Companies paying dividend, interest and royalties to companies who are either:

  • Tax Resident in a jurisdiction mentioned in the above list or
  • Are registered in these jurisdictions and are not tax resident in a jurisdiction which is not in the above list

will need to deduct appropriate withholding tax at source at the appropriate rates as indicated below:

  • Dividends – 17% tax rate. This applies provided that the recipient company holds directly, alone or together with associated companies (which are also resident or registered in a non-cooperative jurisdiction) 50% or more of the voting rights, share capital or right to receive profits of the Cyprus tax resident company that pays the dividend. The above doesn’t apply on dividend paid by a Cyprus tax resident company listed in a recognised stock exchange)
  • Interest – 30% tax rate. Doesn’t apply to interest paid in relation to securities listed in a recognised stock exchange.
  • Royalties – 10% tax rate.

The above rates will not apply for cases where a double tax treaty provides for reduced withholding tax rates. The only jurisdiction that Cyprus has double tax treaty from the above list is Russia. Therefore, dividends, interest and royalties paid to Russian companies will be subject to the withholding tax rates of 15%, 15%, 0% respectively.

The above is for informative purposes only. Further professional advice should be sought for each particular case. Our firm does not accept any responsibility for any loss or damage occurring by acting on the basis of this information.

Tax incentives for highly qualified foreign specialists approved in Cyprus

Tax incentives for highly qualified foreign specialists approved in Cyprus

Tax incentives for highly qualified foreign specialists approved in Cyprus.

On July 14 the Cyprus Parliament approved important amendments to the Income Tax Law.

They introduced provision of significant tax benefits to highly qualified foreign specialists.

In particular, employees who were hired by Cypriot companies from January 1, 2022 will now be exempt from paying taxes at a rate of 50% for up to 17 years. In addition, the minimum required annual salary has been reduced from 100,000 euros to 55,000 euros. An important condition is not to be a resident of Cyprus for at least 10 years before starting working for a Cypriot company. Those who come to work in Cyprus and earn less than 55,000 euros a year will have two years to bring their salary up to the level at which a 50% tax deduction begins to take effect.

Those who already reside on the island and work for international companies from 2016 to 2021 will also be able to extend the benefits from 10 to 17 years. People with earnings from 55,000 euros to 100,000 euros will be eligible for the remaining 17-year period. The authorities have not forgotten about employees of foreign companies who receive less than 55,000 euros per year. They will have a transitional period. For persons already working in Cyprus, this period will be six months, starting from July 14, 2022.

For those who have been resident in Cyprus for at least 10 years prior to starting employment in the country, a 50% tax credit will accrue for up to 17 years.

If a foreigner is a resident of Cyprus for at least 10 years prior to starting employment in a new company, while already working in the country and enjoying a 50% tax benefit, then he will be able to continue to use it for up to 10 years.

Anyone who earns less than 55 thousand euros and was not a resident of Cyprus for at least 3 years before starting work in the country will receive a 20% rebate or 8,550 euros incentive, whichever is less, for the next 7 years. If an employee is already enjoying a 20% tax exemption, they will continue to do so until the end of the 7-year period.

If an employee has an annual income of more than 55,000 euros and has not been a resident of Cyprus for at least 10 years prior to starting work on the island, they are eligible to take advantage of the new 50% tax incentive for the remaining 17 years.

Thanks to this amendment, Cyprus can become a more attractive place for foreign companies that will agree to transfer their personnel to the island, thus creating a better infrastructure with all the positive consequences for the Cypriot economy. In addition, the amendment aims to ensure that Cypriots employed abroad could return to their homeland and continue their activities here. As a result, revenues to the state budget will increase.

The above is for informative purposes only. Further professional advice should be sought for each particular case. Our firm does not accept any responsibility for any loss or damage occurring by acting on the basis of this information.

Suspension of access to the Beneficial Owners register for the general public

Suspension of access to the Beneficial Owners register for the general public

As of November 23, 2022 the access to the Register of Beneficial Owners for the general public is suspended according to the Judgement of the Court of Justice of the European Union (CJEE).

Following the above-mentioned Judgement of the CJEE, Article 1, point 15(c) of Directive (EU) 2018/843 of the European Parliament and the Council, as of 30th May 2018, which provides for access to the information on the beneficial ownership of legal entities to any member of the general public, is now invalid as it constitutes a serious interference with the fundamental rights for private life and to the protection of personal data, enshrined in Articles 7 and 8 of the Charter of Fundamental Rights of the European Union.

The relevant information will still be provided to the obliged entities, with the applicable procedure by submitting a declaration confirming that the information on the Beneficial Owners is requested within the context of performing customer due diligence.

Please note, that the obligation of companies and partnerships to submit and update their Beneficial Owners information is not affected and remains valid.

Source: Department of Company Registrar Cyprus

The above is for informative purposes only. Further professional advice should be sought for each particular case. Our firm does not accept any responsibility for any loss or damage occurring by acting on the basis of this information.

BELIZE CHANGES under the Business Companies Act for IBC

BELIZE CHANGES under the Business Companies Act for IBC

Please note that all Belize companies will need to be re-registered. The reason for the re-registration is due to the repeal in the IBC Act. These companies will now be governed under the Business Companies Act. This takes place from November 28th, 2022 when the registry re-opened. There is no transaction that will be processed unless the company has been re-registered.

If renewal is done after November 28th, 2022, it will entail filing of an Annual Summary upon renewal. Please note that Annual Summary is not to be confused with Annual Tax Return. The Annual summary to be filed by all companies is a confirmation of directors and shareholders of the company and to ensure that any changes made are recorded properly with the registry. Meanwhile, the Annual Tax Return of the company is a mandatory filing of the company’s finances with the Belize Tax Services. All Belize Companies must obtain a Tax Identification number.

In addition, Economic Substance Position and Annual Tax Returns must be filed annually. It is the client’s sole responsibility to provide us with the forms duly completed in accordance with the below-mentioned dates:

ANNUAL TAX RETURN: second basis year-The 2023 annual tax return shall account for the tax periods January 1st 2022 to December 31st 2022 of the 2022 basis year, which becomes due March 31, 2023.

ECONOMIC SUBSTANCE: second fiscal year- commenced April 30, 2021 and ended April 2022. These Companies have 9 months after this date to file its economic substance position, which concludes to January 30, 2023.

TAX EXEMPTION: companies wishing to file tax exemption, kindly provide us with the following before January 30, 2023:

  • Form E
  • Annual Confirmation of Tax Exemption
  • Tax certificate or letter from the relevant tax body in which tax residency is being claimed.

NOTE: PENALTIES ARE INCCURED FOR LATE OR NON- FILING

The above is for informative purposes only. Further professional advice should be sought for each particular case. Our firm does not accept any responsibility for any loss or damage occurring by acting on the basis of this information.

Virtual and physical offices in Cyprus Advocate Cyprus CYWORLD WEALTH

Virtual and physical offices in Cyprus

Virtual and physical offices in Cyprus

Create a virtual office
Opening a virtual office is possible for small companies that need to comply with the laws of Cyprus, but do not have a large budget. Thus, they can comply with the requirements while reducing their costs.

Create a physical office
Another option is to rent a physical space. In this case, your options are much wider, as you can meet with clients and have access to conference rooms with the necessary technology. In some cases, attractive agreements can be found with flexible leasing and short-term contracts.

Benefits of opening an office for companies in Cyprus
Cyprus corporate services are in high demand as it is one of the freest economies in the EU. In addition, if you create an office, virtual or physical, you will receive the following benefits:

  • You will comply with the requirements of a company in Cyprus and OECD regulations.
  • You will comply with Article 5 of the Model Agreement.
  • You will comply with Law 118 of the Cypriot Income Tax Law.
  • You’ll cut costs with flexible leasing or virtual office space.
  • You do not need to invest in real estate.
  • There are offers for which you do not need to make an advance payment for renting an office space.
  • In many cases, you can terminate the agreement with 30 days’ notice.

Please note that this article is for informational purposes only. For further advice, please contact us at the contacts listed on the site.

Tax incentives for highly qualified foreign professionals in Cyprus Advocate Cyprus CYWORLD

Tax incentives for highly qualified foreign professionals in Cyprus

Tax incentives for highly qualified foreign professionals in Cyprus

On July 14, the Cyprus Parliament approved important amendments to the Income Tax Law.

Innovations provide for the provision of the following tax benefits to highly qualified foreign specialists:

  1. Employees who have been hired by Cypriot companies from 1 January 2022 will now be exempt from paying taxes at a rate of 50% for up to 17 years.
    The minimum required annual salary has been reduced from 100,000 euros to 55,000 euros. An important condition is not to be a resident of Cyprus for at least 10 years before starting work in a Cypriot company. Those who come to work in Cyprus and were offered less than 55,000 euros a year will have two years to bring their salary up to the level at which a 50 percent tax deduction begins to take effect.
  2. Island-based employees working in international business from 2016 to 2021 will also be able to extend benefits from 10 to 17 years.For employees of foreign companies who receive less than 55,000 euros per year, there will be a transitional period.For persons already working in Cyprus, this period will be six months, starting from July 14, 2022.For those who have been resident in Cyprus for at least 10 years prior to starting employment in the country, a 50% tax credit will accrue for up to 17 years.
  3. If a foreigner is a resident of Cyprus for at least 10 years before starting work in a new company, while already working in the country and enjoying a 50% tax benefit, then he will be able to continue to use it for a maximum of 10 years.
  4. Anyone who earns less than 55 thousand euros and was not a resident of Cyprus for at least 3 years before starting work in the country will receive a 20% rebate or 8,550 euros incentive, whichever is less, for the next 7 years.
  5. If a specialist earns more than 55 thousand euros per year, but does not meet the above criteria, then he will be able to receive a 20% rebate or deductions of 8,550 euros, whichever is less, for the next 7 years.
  6. If an employee is already enjoying a 20% tax exemption, they will continue to enjoy the tax credit until the end of the 7-year period.
  7. If an employee has an annual income of more than 55,000 euros and has not been a resident of Cyprus for at least 10 years prior to starting work on the island, they are eligible to take advantage of the new 50% tax incentive for the remaining 17 years.

Thanks to these innovations, Cyprus can become a more attractive place for foreign companies that agree to transfer their staff to the island, thus creating a real infrastructure with all the positive consequences.

Please note that this article is for informational purposes only. For further advice, please contact us at the contacts listed on the site.

Merry Christmas & Happy New Year 2023

Merry Christmas & Happy New Year 2023!

Merry Christmas & Happy New Year 2023!

We are sending you the warmest wishes of joy, happiness and love. May this holiday season be filled with light and laughter. May the holidays and the year ahead bring all the health, happiness and success to you an your loved ones.

Updating the Register of Beneficial Owners in Cyprus CYWORLD WEALTH

Updating the Register of Beneficial Owners in Cyprus

Updating the Register of Beneficial Owners in Cyprus

Definition of beneficial owner
Pursuant to Section 2 of the Money Laundering Prevention and Suppression Act 2007-2021, hereinafter referred to as the “Law”, the “beneficial owner” of a legal entity is the natural person who has ultimate ownership or control over the legal entity. Ownership or control may be exercised either directly or indirectly or both through:

  • Owning a sufficient percentage of shares.
  • Voting right.
  • Significant influence or control through other means.

In the event that an individual is not identified as the beneficial owner based on ownership rights, or where there is doubt that an identified individual is the beneficial owner, the details of the senior management officer must be provided.

Direct ownership
Means a block of shares in the amount of 25% plus one share or an ownership interest of more than 25% in the authorized capital of a company owned by an individual.

Indirect ownership
Means a block of shares in the amount of 25% plus one share or an ownership interest of more than 25% in the authorized capital of the company, which is owned by an individual through a legal entity.

Direct and indirect ownership
Direct ownership (by an individual) and indirect ownership (on behalf of a legal entity) results in the individual owning at least 25% of the ownership interest.

Obligation to provide information to the register
According to the Registrar of Companies Directive, each legal entity (eg company, partnership) and each of its officers/partners are required to provide information about their beneficial owners to the registry.

According to the interpretation of the Companies Act, the officers of a legal person are a director, a manager and a secretary.

Thus, information about the beneficial owner should be submitted to the registry by the entity’s own officer/partner, and not by a person acting on its behalf, unless he/she is an officer/partner in that legal entity.

In particular, these objects include:

  • Cypriot companies incorporated or incorporated under the Companies Law.
  • European companies.
  • Partnerships.
  • The following persons are exempt from the obligation to disclose.

Information about the beneficial owner:

  1. Foreign companies.
  2. Trade names.
  3. Company or other legal entity:
  4. The company is listed on a regulated market subject to disclosure requirements under European Union law; or
  5. Subject to equivalent international standards ensuring adequate transparency of ownership or
  6. Those who submitted an application for exclusion before 03/12/21 or whose liquidation began before 03/12/21.

For the purpose of exclusion:

  • In case of exclusion, the date of submission of the relevant application to the Department is taken into account.
  • In the case of voluntary liquidation, the date of the decision to approve the liquidation of the company is taken into account.
  • In case of liquidation by a court decision, the date of filing an application to the court for liquidation.

Please note that this article is for informational purposes only. For further advice, please contact us at the contacts listed on the site.