Cyprus shelf company acquisition
The Republic of Cyprus or simply Cyprus is an island country located in the Eastern Mediterranean and is the third largest and most populous island in the Mediterranean. Cyprus is located North of Egypt, South of Turkey, West of Lebanon and Syria, Northwest of Israel and finally – Southeast of Greece.
As Cyprus is a former British Colony, approximately 80% of the population speak English relatively fluently. Similarly, also the legal system is developed based on the common law practiced in England. Cyprus is a free market economy that provides various opportunities including efficient tax planning for international businesses. With first-class accounting and legal services and excellent geographical location, Cyprus is a great place for doing business. The country is known to be a leader among tax planning jurisdictions, therefore incorporating a company in Cyprus is an ideal way to protect your business. During the last decade, Cyprus’ role in the international tax planning has grown dramatically. As an EU member state, Cyprus has gained a reputation as a legitimate and reliable jurisdiction with over 40 double tax treaties and some of the lowest taxes in the EU.
Benefits of acquiring Cypriot shelf company
If you have decided, that Cyprus is the right jurisdiction for your business, you can either incorporate a new company or you can acquire a ready-made company. Ready-made companies are legal entities that have been incorporated some time ago and since then, have been “sitting on the shelf” for investors to buy them and start operating this company. Due to this comparison, ready-made companies are also called shelf companies. There are several benefits of acquiring a shelf company.
The main aim of a shelf company is to provide the investor with a company that has a clean history as often older companies are perceived as more trustworthy, reputable and reliable than newly incorporated businesses. Acquiring a shelf company is also quicker in comparison to the incorporation process of a new company. This turns out to be a major advantage for many entrepreneurs who need to start trading as soon as possible.
Acquisition of a Cyprus shelf company
Acquisition of a shelf company in Cyprus is typically a simple and fast process. Companies that specialise in selling shelf companies offer full service. This means that together with the company itself, they can also provide a full set of corporate documents, company secretary, a registered office, nominee shareholders and directors, a company bank account with internet bank and debit cards, VAT number, and even a support for the first year of operation if necessary.
Generally, the procedure of a shelf company acquisition is fully organized by the service provider and it only takes 24 hours for you to be able to start trading. The process of a shelf company acquisition may differ among different service providers, but it generally takes 4 steps to buy a ready-made company:
Step 1. You choose a company from a list provided in your service providers’ web page;
Step 2. Your service provider sends you an invoice that needs to be paid;
Step 3. You file a signed Know Your Client form, a copy of your passport and a utility bill on your name;
Step 4. The service provider prepares your chosen company and all necessary documentation, which includes: all company incorporation documents, an open date share transfer agreement with your name, a trust deed prepared by the shareholders and nominee directors for you and some other informative documents. All the documents are sent to your address the same day. Since the company is already registered and has a VAT number, you can start trading the same day.
It is important for you to carefully consider which service provider is the most suitable for your needs as their offered service packages differ along with the prices and reliability. It is up to you to do a full due diligence for you to be able to trust your service provider. For example, while some service providers offer shelf companies with an already opened bank account, others offer an opportunity to open it only after the acquisition of the company, which will typically take several days.
Typically, shelf companies have a legal structure of a Private Limited Liability Company, which is also the most popular type of structure among newly incorporated companies. The popularity of this structure can be explained by the limited responsibility shareholders have in regards to the company’s debt and other liabilities. Also, the minimum capital is smaller in comparison to Public Limited Liability Companies – 5,000 EUR.
Offshore Shelf Company
In case you are not planning to do business in Cyprus, you may benefit from even more beneficial tax structure. As an international entity you are allowed to conduct any legal business activity, make investments, trade portfolios of bonds and stocks as well as buy and sell real estate outside of Cyprus and not pay corporate tax at all.