As required by law, every company should have a registered address. We are able to provide our client companies with a registered office in Cyprus in case they do not maintain their own offices.
MANAGEMENT AND CONTROL
Management and controls and its effect on tax residency as from 1 January 2003.
Under the provisions of the new tax legislation, a company will be tax resident, and thus taxable, in Cyprus only if it is managed and controlled in Cyprus. Incorporation in Cyprus is no longer the criterion for tax residency. However, “Management and Control” is not defined in the Law.
Why is it important? Management and control is also required in order to ensure that double Tax treaty protection will be afforded to Cyprus incorporated companies. A company which is incorporated in Cyprus but which is managed and controlled in another Country may find itself in a position where provisions of a double tax treaty will not be afforded to it.
A company should be in a position to demonstrate that its management and control is in Cyprus. Its efforts to achieve this, we suggest that the company pays particular attention to the following matters:
- There should be a majority of directors resident in Cyprus and they should form a quorum for a board meeting.
- All Board meetings should be held in Cyprus and they should be properly convened and minuted.
- All major policy decisions for the company should he taken at these Board meetings.
- All major contracts should be signed in Cyprus with the local directors being involved in such signings.
- Wide and general powers of attorney to non-residents should be avoided
- The company’s bank accounts should be managed from Cyprus
- The Memorandum and Articles of Association of the company should include the necessary provisions to eliminate the risk of appearing to have a taxable residence in another country (e.g. Requirement that all board meetings should be held in Cyprus).
- The seal of the company should only be authorized to be used in Cyprus.