Corporate Governance

A cadre of experienced lawyers assists our clients to navigate the complex legislation and best practice codes associated with corporate governance today. We counsel boards and senior executives on the day to day management of a Cyprus company, helping them to make informed decisions, addressing all aspects of company law, ranging from board meeting requirements to investor protection, compliance with codes of conduct, director liability issues and shareholder engagement. Our corporate governance experience grows with the on-going needs of our clients, many of whom are market leaders in their respective fields requiring sector-specific advice or are public companies engaged in international listing procedures.

The ability of a director to apply independent judgment and steer a business to profit can be deduced only from such director’s qualifications and experience. It is no longer sufficient for satisfying management and control purposes to appoint any person with a Cyprus tax residence to sit on a board and turn the stakes in favour of Cyprus tax residence. A director must have both the freedom and acumen to decide, inter alia, independently, how to use capital or assets or the yields therefrom, what and when to make available to the shareholders by way of dividends, to intervene constructively to safeguard the position of the company from potential pitfalls and dangers, and to propose constructive solutions to tangible problems that the company may face such as deadlock or potential creditor claims.


OUR DIRECTORS

Our directors add real value to your structure by offering effective, high-level appointments of individuals with a proven track record in their respective fields and a demonstrated ability to comprehend and implement complex corporate strategies. Directors appointed by Harneys Fiduciary Cyprus will exercise their duties diligently and responsibly so as to minimise challenges, facilitate double tax treaty access, and meet OECD beneficial ownership and substance requirements.

Our commitment is provide a few, substantive directorships to a limited number of clients, including non-executive directorships in listed companies, in which we can establish an effective, problem-solving interface with the management, adding breadth of experience, local knowledge and a sound skill set to strengthen the board and steer the company to meet its targets.


Regardless of your company’s size, we provide an array of services as needed. Our services include:
  • Company Incorporations
  • Provision of Company Secretary
  • Provision of Registered office and safekeeping of company seal
  • Maintenance of statutory books and records
  • Attendance of meetings and regulatory submissions, including AGM and Annual Returns
  • Setting up of local bank account
  • Provision of local directors 

TAX RESIDENCY

One of the main drivers for setting up in Cyprus is tax. All companies tax resident of Cyprus are taxed on all their income accrued or derived from all sources in Cyprus and abroad. A non-Cyprus tax resident company is taxed on income accrued or derived from a business activity which is carried out through a permanent establishment in Cyprus and on Cyprus source income (such as rental income).

A company is considered a resident of Cyprus if it is managed and controlled from Cyprus. Some of the tax advantages offered by the Cyprus regime include:
  • 12.5% corporate tax rate;
  • Broad network of double tax treaties;
  • Unilateral tax credit on any tax paid abroad on the same income, irrespective of the existence of a double tax treaty;
  • Profit from sale of shares and titles is exempt from taxation;
  • No capital gains tax other than on the disposal of immovable property situated in Cyprus or shares representing immovable property based in Cyprus;
  • Payment of dividends and interest to non-Cyprus tax residents are exempted from withholding tax;
  • Notional interest deduction on new capital introduced as from 1 January 2015 in the form of paid up share capital or share premium of a Cyprus company is eligible for an annual notional interest deduction which is calculated as a percentage of interest on the new equity;
  • Transfers of assets and liabilities between companies can be effected without tax consequences within the framework of a reorganization (mergers and demergers, divisions, exchange of shares).

Cyprus looks to management and control as the primary test for tax residency but, even if tax residency is established in Cyprus from a local perspective, if there is no business purpose and no substance to the decision making process here, home jurisdictions will be increasingly likely to challenge the host jurisdiction for taxing rights. We have seen that such challenges are rapidly increasing so corporates acting in cross border situations are attaching increased worth to securing certainty and a pre-determined tax position so as to arrange their affairs as efficiently as possible.

The ability of a director to apply independent judgment and steer a business to profit can be deduced only from such director’s qualifications and experience. It is no longer sufficient for satisfying management and control purposes to appoint any person with a Cyprus tax residence to sit on a board and turn the stakes in favour of Cyprus tax residence. A director must have both the freedom and acumen to decide, inter alia, independently, how to use capital or assets or the yields therefrom, what and when to make available to the shareholders by way of dividends, to intervene constructively to safeguard the position of the company from potential pitfalls and dangers, and to propose constructive solutions to tangible problems that the company may face such as deadlock or potential creditor claims.