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 CYPRUS
passed with very high grades the
"examinations of" Council of Europe concerning the
meters
that are applied for fighting of rinsing of illegal money and the financing of
terrorism. Commercial Banks is
reported in the very positive comments that collected Cyprus
from the Third Report of Evaluation of Permanent Committee
Money Val of Council of Europe as well as the evident faculty
of Cyprus to be compared excellently and to distinguish in a
lot of sectors inter alia European and not countries they
dissolve for still a time any criticisms that were
started against Cyprus occasionally concerning the rinsing
of illegal money. The Report was based in new, strict and
very in detail methodology, that was prepared joint by the
Team of Economic Action at the Rinsing of Illegal Money (FATF)
and International Monetary Fund (IMF) and constitutes the
base for the evaluation of all countries of or FATF of or
Committee Money Val where participates and Cyprus. Does the
evaluation in the report in question cover the financing
sector as well as not? financing sectors Concretely the
Report covers all the spectrum of meters that was adopted
and they are applied in the Cypriot Democracy in these
sectors, with accent in the application in the practice of
providences of International Conventions, the Directives of
EU and the 49 Constitution of FATF. The Report contains a
lot of positive reports on the all system of Cyprus, as the
existing legal frame, international collaboration to role of
Unit of Fighting of Offences of Cover-up (MOKAS), Central
Bank, other supervisory beginnings as well as the engagement
of private sector for the application of relative regulating
frame and his collaboration with the MOKAS.
 The
Governor of the Central Bank of Cyprus acting
under the authority vested in the Central Bank of Cyprus by the Banking Law (Law
66(I) of 1997), has granted a banking business license to “Lloyds TSB Offshore
Limited” of Jersey, to carry on banking business in Cyprus through a branch.
“Lloyds TSB Offshore
Limited” is a member of “Lloyds TSB Group PLC” of the UK. and
provides a wide range of banking and investment services. The branch of “Lloyds TSB Offshore Limited” in Cyprus will be subject to the
supervision and inspection of both the Central Bank of Cyprus and the Jersey
Financial Services Commission. Lloyds TSB Offshore Limited is the first bank
from Jersey which has been allowed to establish a branch in Cyprus.
After accession in the EU, Cyprus pivotal role has succeeded in attracting international credit
institutions as a result of Cyprus' international recognition as a reputable
regional banking/financial centre.
There are at present, 29 foreign credit institutions from 12 different countries
(Austria, Bulgaria, France, Greece, Ireland, Jordan, Latvia, Lebanon, Russia,
Tanzania, Ukraine and the United Kingdom), which operate in Cyprus either in the
form of a subsidiary bank or branch.
 Are
you planning to trade with the EU? Then use a Cyprus Holding Company as your
premiere investment vehicle.
Cyprus, positioned at the East
Mediterranean sea across the Suez Canal. Coupled with a good international
transport and communications infrastructure and sunny Mediterranean island
weather, Cyprus offers itself as an excellent entry point for American, Asian
and African companies and entrepreneurs wishing to trade with the European
Union.
Cyprus, being termed as the EU
rising star for inward investment offers 4 significant benefits for holding
companies:
Holding company can derive
inward dividends al zero or low withholding tax by utilizing the EU
parent/subsidiary Directive (subsidiaries within the EU) and its extensive
double tax treaties network (subsidiaries outside the EU). Double tax avoidance
treaties with 40 countries include Singapore, Thailand, China, India, USA, UK,
Seychelles, Kuwait, other EU countries and ex USSR states.
Cyprus is the lowest tax
jurisdiction within the EU (corporate tax is only 10% on the net
profits).Flexible reorganization rules enable restructuring with minimum tax
implications and exemption from capital gains tax of subsidiaries and the
holding company but most importantly, Cyprus is a good EU exit point as
unilaterally by domestic law withholds no tax on payment of dividends, interest
or royalties to non residents. This law supersedes the bilateral Double Tax
Avoidance Treaties.
In addition to the above, Cyprus
holding companies enjoy a Unilateral Tax Credit Relief for any taxes paid in the
operating country. There are no substance requirements, no debt equity
restrictions, no minimum holding period and no thin capitalization rules. No
capital gains or income tax on the disposal of shares of subsidiaries.
Above benefits are also valid or available
for trading companies operating from Cyprus at an International level
If
a company is resident in the Republic of Cyprus, tax is imposed on income accruing or
arising both from sources in and outside the Republic. If a company is not a
resident in the Republic, tax is imposed on income accruing or arising only from
sources in the Republic.
Tax rates for Companies 10% on the net profits and
Public corporate bodies 25% on the net profits
Exemptions
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Interest income arising 50% in the ordinary course of
business including interest closely connected with the carrying on of the
business, is not considered interest but trading profit and therefore the
50% exemption is not applicable
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The full Dividend income amount
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The whole Profit amount from the disposal of
securities.
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Profits from a permanent establishment The whole
maintained outside the Republic amount (subject to certain conditions)
Deductions
Deductible from income are all expenses incurred wholly and
exclusively for the production of income including:
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Interest incurred for the acquisition of a The whole
fixed asset used in the business amount
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Expenditure for the maintenance of up to CYP200,
buildings under preservation order CYP300 or CYP350 per sq. m. (depending on
the size of the building)
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Donations to approved charities
Carry forward losses
Losses are carried forward indefinitely. Losses for the
years 1997 onwards which have not been offset against profits arising up to the
year 2002, will be carried forward to 2003 and subsequent years without time
restriction.
Group relief
Losses for the current year only can be surrendered by a
group company to another group company. Group relief will be given provided that
both companies are members of the same group for the whole of a tax year. Two
companies are considered to be part of a group for group relief purposes if: one
is a 75% subsidiary of the other, or both are 75% subsidiaries of a third
company.
Loss of a permanent establishment outside the Republic
Losses arising from a permanent establishment outside the
Republic can be offset against profits arising in the Republic. However, when a
profit arises from such a permanent establishment, an amount equal to the losses
that have been utilised in the past against profits arising in the Republic will
be included in the taxable income.
Insurance companies
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losses
of the life business can be offset against profits of the general business
-
losses
of the life business can be offset against profits from other sources
-
losses
of the life business can be carried forward indefinitely.
Company Re-organisations
In the event of a company re-organisation, unused losses
brought forward will be transferred to the new company and the provisions
dealing with the set off or transfer of losses will apply accordingly.
Group profit after tax for the 9 months ended 30 September 2006 (9M06)
recorded an increase of 158% compared to the corresponding prior year period.
The improvement in all of the Group’s profitability indicators continues to be
significant. The development of the Group’s business in Cyprus, combined with
the cost containment program, the very positive course of the Group’s insurance
operations and the continuation of its dynamic expansion in Greece contributed
to the profitability improvement. The improvement in the Group’s loan portfolio
and quality indicators is remarkable. Specifically, the ratio of non-performing
loans to total loans has improved from 9,3% at 1 January 2006 to 6,6% at 30
September 2006. The Board of Directors of the Bank, taking into consideration
the results to date and the expected profitability for the whole year, has
decided to pay an interim dividend of 7 cent (approximately €0,12 3) per share.
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