Combi Nation The magazine for Cyprus

related business and leisure

Putting trust in Cyprus business

Teach me how to drive

Pu

blis

hed

by t

he

Cyp

rus

Ch

am

be

r, E

dit

ion

Sp

rin

g

20

12

Better safe than sorry

CREATIVE

PRAGMATIC

9 Vassili Michaelides, 3026 Limassol, Cyprus Website: www.paritax.eu Telephone: 00357-25 206 803 e-mail: info@paritax.eu Mobile: 00357-99064193 Skype: Paritax

PERCEPTIVE

Welcome to the Cyprus Business

& Leisure

CombiNation

3 CombiNation

Dear readers, I am proud to present to you the first digital edition of the 2012 series of CombiNation, the digital magazine of the Cyprus Chamber. The CombiNation Magazine is created for business people and people who are interested in this beautiful country. CombiNation publishes information and stories in the area of business and leisure, directly or indirectly related to Cyprus. If you feel the desire to publish an article about a business item, leisure, food, or your life in Cyprus, don’t hesitate to contact us. This CombiNation magazine contains an inquiry on Cyprus corporate service provi-ders, how to drive in Cyprus, what the Cyprus Chamber is about and many more interesting information. I hope you will enjoy the first digital edition of the CombiNation Magazine and in case you have any remarks or sugges-tions, please let me know. You can reach me by e-mail at magazine@combi-nation.eu Best regards, Robert Hek Chairman of the Cyprus Chamber

4 CombiNation

3 Word by the Chairman

5 Colofon

6 The Cyprus Chamber

9 Putting Trust in Cyprus business

14 Book recommendation

16 Better safe than sorry

21 Upcoming events in Cyprus

Contents

CombiNation contains information about

Cyprus related business and leisure.

Editorial Staff: Robert Hek

Edith Joseph Shana Joseph

Virginija Mutulaite

Advertisements and

advertorials For information about

advertisements and advertorials, please go to

www.combi-nation.eu

Design & realisation Cyprus Web Art

www.cypruswebart.com

Addresses, telephone and e-mail

9 Vassili Michaelides 3026 Limassol - Cyprus

P.O. Box 57048

Limassol-Cyprus

Telephone + 357 25 25 10 88

magazine@combi-nation.eu

www.combi-nation.eu

Subscription CombiNation is freely

digitally distributed amongst everyone with an

interest in Cyprus

To subscribe please click here and complete the

subscription form

5 CombiNation

25 Teach me how to drive

32 Cyprus tax highlights 2012

35 Upcoming events in the world

37 Bon apetit

38 Movie recommendation

39 Cyprus, the ideal holding

Jurisdiction

42 Functional & Creative

43 Next edition

The Cyprus Chamber promotes

Cyprus business and leisure

The Cyprus Chamber started in May 2006 with the official name “Dutch – Cypriot Chamber of Commerce”. Soon after the setup, the name “Cyprus Chamber” was introduced as the commercial name of the Chamber. The Cyprus Chamber was initially created to help Dutch entrepreneurs to find their way around in Cyprus business, but now assisting entrepreneurs from all over the world in doing business in Cyprus.

The Cyprus Chamber promotes doing business in Cyprus, gives information about Cyprus business and publishes the CombiNation Magazine, a magazine about Cyprus related business and leisure. The CombiNation Magazine contains all kinds of information, with a direct or indirect connection with Cyprus.

info@cypruschamber.eu www.cypruschamber.eu

6 CombiNation

Specific for entrepreneurs, the Cyprus Chamber offers a wide range of business support services and assistance, ranging from mailing lists to market research, from translation and VAT services to searching for business partners or company research.

On our website www.cypruschamber.eu you can find general information about both Cyprus and the Netherlands in the country information section. In the future, we will also add information about other Cyprus related countries.

The Cyprus Chamber has a network of specialists in and outside Cyprus that can help you to answer specific questions that cannot be answered by either the Chamber or its publications. This network can also be used when searching for business partners, such as an export agent, or a joint venture.

For tailor made advice, the Chamber has a wide network of experts who can help you to start up a company or holding structure, manage your company or answer any other specific questions you may have. Furthermore, the Chamber provides support for all official procedures that relate to setting up a company in Cyprus.

The Cyprus Chamber orga-nizes a wide variety of informational activities such as seminars and trade missions. Furthermore, networking activities such as lunches, drinks and company presentations can be arranged. These events will mostly be organized in co-operation with companies, which provide a perfect promo-tional opportunity for such organizations.

The Chamber can also assist companies by preparing and co-ordinating tailor made business trips. This enables companies to visit important organizations abroad, such as potential business partners, without worrying about travel, accommodation and the language barrier. Furthermore, a program is organized in such a way that the amount of business, networking and relaxation vary, according to a company’s wishes.

The Chamber offers several marke-ting opportunities for companies, whether in the form of an adver-tisement in CombiNation Magazine, or by sponsoring one of our network activities.

7 CombiNation

www.sbs7.eu info@sbs7.eu

is a unique partnership of entrepreneurs through

which, via a sophisticated system, a significantly

lower tax burden can be achieved with optimal

asset protection!

Save - Protect - Enjoy

Success by Sharing

9 CombiNation

Putting Trust in Cyprus Business

The sun bathed island lying in the Eastern Mediterranean sea, is considered to be an ideal holiday destination for people from colder climates. Luxury hotels, high standard tourist infrastructure and the famous Greek cuisine, is a combination you cannot resist. Even Aphrodite the Greek goddess of Love, daughter of Zeus, has chosen the shores of “Petra tou Romiou” in Paphos to come to life. But that is a legend to be told, under the summer moonlight, enjoying chilled local white wine.

Now it’s time to talk about facts. Facts, about another field of services Cyprus is well known for: Corporate Service companies or Trust or Fiduciary services Companies, as they are usually referred to. A country with less than a million inhabitants and divided since a Turkish military invasion took place back in 1974, has managed, since 2004, to be a full member of the European Union. The professional services sector in Cyprus is one of the most advanced and of high standards in Europe. The favorable tax regime, with the lowest corporate tax in the European Union (10%) and the legal, accounting and banking services and system, has earned Cyprus the title of one of the most favorite destinations around the world for saving money from taxes.

By Andreas Frangos, lawyer at A.G. Frangos & Co LLC

The saving procedure though has to pass through the Trust Companies. Trust companies or Corporate Service providers are nothing more than ordinary Private Companies Limited by shares. Whoever would like to do business in Cyprus has to contact one of those hundred providers in order to initiate the procedure of purchasing a Cyprus company or incorporating a new one. And that is the point where “There’s something wrong in paradise”.

“Now it’s time to talk about facts”

10 CombiNation

Unfortunately, until now there is no legal framework as such, regulating the provision of corporate and trust services in Cyprus. A foreign client wishing to do business in Cyprus is coming to a “terra incognita”. Indirectly nevertheless, the companies which employ licensed lawyers or certified accountants, their services are being regulated by their respective supervisory bodies, the Cyprus Bar Association and the Institute of Certified Public Accountants of Cyprus respectively. Contacting a firm which employs a licensed lawyer or a certified public accountant is a level of protection and guarantee that he will be treated with an adequate standard of professionalism, expected in a member of the European Union.

Cyprus, being a member of the European Union, has adopted several European Directives and has implemented several important legislations for the prevention and suspension of money laundering activities, which indirectly again, has forced corporate service providers to raise the level of services provided to their clients, by establishing internal procedures, regulations, policies and manuals regulating their relationship between their clients and the trust company. Cyprus Banking institutions have contributed to this task by accepting as introducers for opening bank accounts only licensed lawyers or accountants.

There are many “trust companies”

which provide everything else

but trust

Currently it’s up to the trust companies to employ qualified personnel or to properly train the existing personnel in order for them to be able to meet the admini-stration, the academic and legal knowledge required by the day to day demanding needs of an international client in the context of the Cyprus corporate gover-nance environment. A “nominee” must be able to acknowledge the responsibilities arising out of the Cyprus Companies Law undertaken, by accepting the office of director, secretary or a shareholder of a Cyprus company.

The foggy landscape of the provision of corporate services, fortunately is about to change (we hope in 2012) through a new legislation which is under scrutiny at the moment by the members of the Cyprus parliament. The new legislative initiative will establish a licensing procedure under which each private company which wishes to offer such services must meet certain criteria both in their internal procedures and in the qualifications of the people that are going to manage and work for these types of companies. Professional and academic background and experience is required along with “fit and proper” prerequisites. An appoint-ment of either an internal or external associate licensed lawyer is applied by the provisions of the new Law, by the fiduciary companies.

11 CombiNation

A supervisory body is implemented which will be granted the authority to award such corporate services licenses or to revoke them if they believe, at their discretion, that the criteria set out by the Law are not met at all times. The supervisory body will be the Cyprus Securities and Exchange Commission.

The foggy landscape of the provision of corporate services is about to change

The new Law implements various obligations by the Corporate Service providers in order to safeguard that the money kept by the providers on behalf of their clients will be treated independently from their own funds and will be available at any time by the client. Various organizational requirements are being introduced to protect the assets kept by the trust companies on behalf of and on account of their clients. The Commission will be able to impose monetary penalties along with the personal criminal liability of the directors of such companies who will violate the provisions of the Law.

A fact remains though, that there are many “trust companies” which provide everything else but trust. Whoever is of the opinion that he can offer corporate services, may freely incorporate a private company limited by shares and start offering those “services” through a shiny website promising to save you money, tempting you to contact them by proposing suspiciously low prices for their “high caliber of professional services” and many other ancient Greek legends.

Corporate

Providers

12 CombiNation

An encouraging private initiative has taken place in November of 2011 by some Corporate Service providers establishing a private association named “Cyprus Fiduciary Association” in an effort to apply some standards in the provision of such services in Cyprus. Even though the association is very young with a limited number of members, it is an initiative worth mentioned until the new Law will be in force.

It is without any doubt that the new legislation will create a new scene in the field of Corporate Services in Cyprus adding a high level of protection to the perspective international clients and will also increase the feeling of trust and safety for the services rendered by Cypriot professionals in the sector of Corporate and Fiduciary services.

For the time being the “know your client” duty can be reversed and paraphrased as “know your Corporate Service Provider”. Due diligence can work beneficially both ways, for the trust company and for the client. In the meantime a great CombiNation of leisure and business can be achieved by visiting Cyprus. Know Cyprus, know us.

Know Cyprus, know us

It is without any doubt that the new legislation will create a new scene in the

field of Corporate Services

According to the present situation, if a nominee director does not act professionally and according to the trust agreement or the service agreement he has with the client, he will be risking his reputation and a possible civil action for damages, caused by violating his fiduciary duty to the company. In case, nevertheless an Ultimate Beneficial Owner of a Cyprus company committed a criminal offence the nominee director will not be blamed and will be protected by the Indemnity Agreement signed between them. That Agreement will be valid if the nominee was acting in good faith and was not aware of the criminal activities of the Ultimate Beneficial Owner.

21 b&c, Karaiskaki, 3032 Limassol – Cyprus

Tel: +357 25763610, Mob: +357 99439426, Fax: +357 25361290

www.ultimartdisplays.com E-mail: info@ultimartdisplays.com

We help you to create a dynamic selling environment.

Whether you exhibit in smaller local events or large international shows, Ultimart enables you to effectively communicate

your message with visual impact while building your brand !

Cypriot leader in high-quality trade

show displays

Telephone: +357 25431250

Fax: +357 25431251

E-mail: info@sollers-trust.com

Hig

h q

ua

lity s

erv

ice

s a

t affo

rda

ble

pric

es

Sollers Trust Ltd,

58 Agiou Athanasiou Avenue

El Greco Building, 2nd Floor, Office

201

4102 Limassol,

Cyprus

Bo

ok reco

mm

end

ation

B

y Shan

a Josep

h

ww

w.sh

anajo

seph

.com

The Road, Cormac McCarthy’s tenth novel, is a raw and engaging narrative centred on a father and son as they struggle for survival in a post-apocalyptic North America. Understated, yet simultaneously poetic and thought-provoking, the narrative explores the absolute worst and the very best man is capable of.

As the protagonists strive to escape the brutal and bitter winters, they journey south down a deserted highway flanked with ash and debris, filthy and deprived of food and water. Along the way, the remains of humanity are explored as the current state of the world is explained. The man’s sole objective is to protect his son, not only from the dreadful circumstances of the world’s destruction, but also from the barbaric remaining survivors who would stop at nothing to ensure their own survival at the expense of another.

The novel, one of McCarthy’s best to date not excluding the popular No Country for Old Men, aims to encourage self reflection. Precisely how dangerous and depraved can man become for his own gain, and just how far is a man willing to go to protect the only thing that matters to him, his child’s life?

14 CombiNation

16 CombiNation

A v

iew

on

Co

rpo

rate

Se

rvic

e ex

pen

ses

Better Safe Than Sorry

15 CombiNation

Time for a little research!

For entrepreneurs who operate inter-nationally, Cyprus is undeniably a good location to avoid international double taxation. Cyprus has many tax treaties with other countries and has an excellent tax climate.

In Cyprus, no license is required to practice a so called “trust company”. At the moment, there is no supervision from the government and it is not clear how many companies deal with the setup and management of companies. In Cyprus, the companies that deal with the setup and management of companies for third parties are called “corporate service providers”. These are often offices being part of bigger international corporate service providers. Next to that, law firms and accountants offer these services in their total service package.

When you have made the decision to set up a holding company in Cyprus, the question arises: With whom and what are the expenses for the setup and yearly management of a Cyprus holding com-pany? Cyprus Chamber thought it was time for a little research!

Cyprus Chamber sent a questionnaire to over 100 offices in the corporate service provider industry in Cyprus with questions about the prices for the setup and management of a holding company incorporated under Cypriot Law and being a holding company whose only asset is the shares in a subsidiary. The holding company itself has no activities.

When you have paid the price for the setup of the company, you’re not quite ready yet. A Cyprus Company needs a director, a secretary, a registered address and a bank account. If you don’t want anyone to know who the shareholder is, then a nominee shareholder can be appointed. Last, but not least, every year the annual accounts of the company have to be drawn up and checked by a certified accountant.

17 CombiNation

18 CombiNation

Below, we have compiled a list indicating for each activity who is the most expensive and the least expensive.

LE = Least expensive

ME = Most expensive

Activity LE ME

Set up of a company one time 1.000,00 3.000,00

Nominee shareholder yearly

200,00 800,00

Nominee director yearly

250,00 3.500,00

Registered office yearly

200,00 600,00

Nominee secretary yearly

200,00 600,00

Nominee signatory on bank account yearly included 1.200,00

Annual Accounts yearly

300,00 1.500,00

Obtaining VAT Number one time

50,00 500,00

Set up of a branch in Cyprus one time

500,00 3.000,00

Tax advice per hour

100,00 350,00

Accounting / bookkeeping services per hour

50,00 100,00

Auditing services per hour

100,00 300,00

Active management per hour

50,00 350,00

Virtual office, depending on the package per year

400,00 1.500,00

Only price comparaison, no quality comparaison

19 CombiNation

The research shows that the prices for the setup, the management and the preparation of the annual accounts vary considerably. The price difference for the setup of a holding company can reach up to 300%. There are also huge differences in the amount of the hourly rate. The way clients are handled when they do not pay their bills is quite similar. In the absence of payment, the client, or “beneficial owner”, will be registered as shareholder and director of the holding company and the authorities will be informed about that. In some cases, their company will be dissolved, with all its consequences for the subsidiaries of the holding com-pany.

As mentioned, the research was focused on a standard situation of a holding company without its own activities. If you intend to activate the company, then you should beware. Sometimes the costs of corporate service providers can greatly increase if companies start practicing activities. It’s therefore of great importance to make arrangements with the corporate service provider in advance.

What you also can find on your invoice are so called “disbursements”, being a premium for the fixed office expenses and calculated as a percentage of the actual costs. Not every corporate service provider does this and these costs can sometimes be avoided if you make prior arrange-ments.

Other expenses for which arrangements should be made in advance, are the so called “exit costs”. These are the expenses to terminate the company or to transfer the files, if you want to change to another corporate service provider. Without prior arrangements on these costs, you can be unpleasantly surprised.

It can be concluded that the corporate service providers which are involved in the research are not excessively expensive, but there are major differences in their pricing. A less expensive provider is not necessarily slower or worse than an expensive provider. It is important that you make a balanced choice based on price compa-rison and that you make prior arrange-ments on the hourly rate, the variable costs, the exit costs and the disbursements.

Without prior arrangement on these costs, you

can be unpleasantly

surprised.

21 CombiNation

UP

CO

MIN

G EV

ENTS IN

CYP

RU

S

EASTER is the most im-portant religious holiday in Cyprus. On Easter Thursday housewives are baking "flauna", a savoury cheese pie. Friday is the day of the burial of Christ (Epitafios - burial in Greek).

The Perifora Epitafios is a candlelit procession of a shrouded funeral bier (coffin) which winds its way through the streets and then onto the church. The Midnight mass on Easter Saturday/ Sunday morning is the most important day of all and a time for much rejoicing and celebrating the anastasis (resurrection) of Christ. On Easter Sunday people eat "souvla" or "ovelias" (roast whole lamp)'.

Coastal cities seize the opportunity to stage concerts and games near the waterfront. The feast of the Pentecost or Whitsun is marked 50 days after Greek Orthodox Easter.

Easter in Cyprus, April 15-16

"Kataklysmos" – Flood Festival in Cyprus, June 4

A Greek Ortho-dox festival with strong pagan roots focusing primarily on wa-ter. Kataklysmos or Festival of the Flood marks the day of the Holy Spirit

22 CombiNation

UP

CO

MIN

G EV

ENTS IN

CYP

RU

S

23 CombiNation

UP

CO

MIN

G EV

ENTS IN

CYP

RU

S

CYPRUS WEB ART www.cypruswebart.com

Th

e A

rt of Sh

ow

ing

Life in Cyprus Teach me how to drive

25 CombiNation

I am a Dutchman and I have my driver’s license for over 25 years. Official records show that on December 31, 2010, there were over 8 million registered cars in the Netherlands and I am used to driving in between all these vehicles. I have never got myself in any bad accident and so I think of myself as an experienced and safe driver….. that means… until I came to Cyprus.

First of all, in Cyprus people drive on the left side of the road. You can’t say that you don’t know that when you come to Cyprus. When you leave the airport by car, signs next to the road tell you “DRIVE ON THE LEFT SIDE!” In case you don’t get the message they repeat it for you and in case you find it still difficult to understand and continue driving on the right side, the ambulance personnel will remind you. The question is though….. Why do the Cypriots drive on the left side? The answer is not that difficult. It is because Cyprus is a former British colony and in the British Empire, they drive on the left side of the road. Why they do that I’ll tell you in a separate article. It’s never too late to catch up with history.

Back to the left side of the road again and off to the highway. Don’t speed over 120 km an hour! The signs say that the maximum speed is 100 km an hour. The Cyprus Garmin Navigation system though will tell you that 110 km an hour is the limit and when you ask the local population, they will tell you that 120 km an hour will add no points on your driver’s license.

DRIVE ON THE LEFT SIDE OF THE ROAD

By Robert Hek

26 CombiNation

Well, I did the test myself and went on the highway. Even though there are multiple signs that there are cameras to measure your speed, only police officers with radar speed guns do the job. The officer normally parks the police car off the highway, kneels and aims the radar speed gun over the window. When you pass him it actually seems that he will shoot you!!! If that is not a warning, then what is?

Since the highway goes hilly up and down, they always appear just after the hill up, down or after a bend. Even at night it is hard to spot them from far, despite the fact that their blue lights are on all the time.

From the highway we go to the cities… Limassol, Nicosia, Larnaca… you name it. Welcome to the Luna Park on wheels. The first thing that got my attention is that people do as much as everything behind the steer wheel and, in between, they drive. I have seen smoking, calling, eating, kissing, cursing, singing, shouting, smiling, yawning, sleeping, reading, honking (a lot) and more. Multitasking Cypriots can do it all. The danger starts when foreigners come into town and try to adjust in the honking madhouse from roundabout to roundabout.

If you think that you can spot the officers from far

than you’re mistaken

They normally operate with two cars, the first one measures your speed and when you are going too fast, the second policeman, a bit further on, steps onto the road and directs you off to the side where he can increase the financial budget of Cyprus and add points to your driver’s license. You better stop when he directs you! It’s an island and there is nowhere to go when you’re on the run for the police posse.

I did the test several times and passed them with 120 km on the speed indicator. It’s true…. I was never stopped and never fined so far.

27 CombiNation

Further on, be aware of the fact that Cypriots push the nose of their vehicle far up onto the road when they want to squeeze themselves into the traffic. Just pay attention and give them space. It’s better for the traffic and they always thank you for being so generous. By the way, they expect you to do the same and they will give you space once you ask for it.

Don’t worry about the small motorcycles going from left to right and back again, moving themselves through the traffic. You can’t tell where they are anyway and as long as you don’t come home with fresh blood on your tires, it will be OK. It’s better to keep an eye on the road and avoid cars and bumps and holes in the road.

When it happens close to you, it will scare the …. out of you! Be sure that you have access to extra oxygen. Calling the police in such a case may be an option. The cops are also driving their steel horses and once I was overtaken with high speed by one of them in the Limassol tourist area…. On a wheelie!

How can someone recognize me when I wear a helmet on my head?”

When you are waiting for a red light and you want to turn to the right, pay attention to the green arrow. This arrow turns green before the light to go straight turns to green. Well, if you don’t pay attention, you will have the attention from the people behind you. They start honking after approximately 1 second.

It gets really exciting when the Big Motor Drivers (hereinafter called BMD) step on their beautiful and fast bikes. Although I am a motorcycle driver myself and understand the enormous increase of testosterone when you climb the “Steel Horse”, in Cyprus BMD’s have a serious death wish. It’s hard to find a BMD with a helmet and once you have spotted one, it’s on their arm instead of their heads (which is even dangerous).

Asking a BMD why they carry the helmet on his arm instead of his head, he replies: “How can someone recognize me when I wear it on my head?” OK, he has a point and to be honest, after wearing a helmet in summertime for more than an hour, you probably look like over dated Souvlaki. Another BMD sport in Cyprus is to accelerate as hard as you can on a distance as short as possible.

After some practice and adjusting to the local habits, there is a possibility to survive it all and reach home safely and relaxed.

Kyiv Office (Ukraine)

9-B Pushkinska Street, office

66

Kyiv, 01034, Ukraine

phone / fax: + 38 044 235 52

35 / + 38 044 235 10 35

www.fso-legal.com

Limassol Office (Cyprus)

Arch. Makarios III Avenue, 140,

Raptopoulos Building, 3rd floor, office

301, P.C. 3021

Limassol, Cyprus

phone: +357-25738400

fax: +357-25738408

Don’t get me wrong. I drive my car for several years now in Cyprus, in and outside the city and on the highway. I estimate that, on average, I drive approximately 25.000 km on a yearly basis and to be honest, it’s not so bad. On the highway with the sun in my face it’s even relaxing especially when I compare it to the crazy traffic jams in the Netherlands.

Take Care and keep to the left!

Company set up and

management

International Tax Planning

Asset Protection

Vroentestraat 2

3290 Diest, Belgium

(0032)13/25.23.22

www.debedrijfswinkel.be

The Bedrijfswinkel in Diest, Belgium, organizes in

cooperation with the Cyprus Chamber a seminar

about saving taxes and asset protection for

Belgium entrepreneurs.

Location:

De Bedrijfswinkel

Vroentestraat 2

3290 Diest

(0032)13/25.23.22

The seminar will start at 19.00 and the

participation fee is € 195 per participant. The

language used during the seminar is Dutch.

You can register via the seminar website

www.belastingseminar.com

31 CombiNation

UP

CO

MIN

G EV

ENTS IN

EUR

OP

E Seminar

“Saving Taxes from Belgium to Cyprus”, June 21, 2012

32 CombiNation

Cyprus tax highlights 2012 Though not as high as in most of the European countries, the Cyprus government also needs to impose taxes on individuals and companies. We herewith give a short highlight for the year 2012 focused on the income tax, the social insurance, the special contribution for defence, the corporation tax and the tax treaties, which are of interest to international companies and indi-viduals.

The personal income tax rates in Cyprus are: Chargeable income Tax rate € 0 – 19.500 0% 19.501 – 28.000 20% 28.001 – 36.300 25% 36.301 – 60.000 30% Over 60.000 35% Foreign pension 5%

• Dividends are not taxed; (Note that the interest and dividend are subject to the Cyprus Special Contribution for Defence)

• 50% of the remuneration from

employment in Cyprus by an individual who was not a Cyprus tax resident before the commencement of his employment, if the remu-neration exceeds € 100.000. This exemption is applicable for 5 years.

• 20% of the remuneration from employment in Cyprus by an individual who was not a Cyprus tax resident before the commencement of his employment, with a maximum exemp-tion amount of € 8.550 annually. This exemption is applicable for 3 years;

• The whole remuneration from salaried services outside Cyprus, if the services rendered outside Cyprus exceed 90 days to a non-Cyprus resident employer or to a foreign permanent establishment.

• The whole profit of a permanent establishment under certain conditions;

Not every type of income in Cyprus is taxed. There are interesting exemptions from the income tax applicable, such as:

• Interest income is not taxed, except for interest related to business activities;

• The whole amount received by way of commutation of pension, compensation for injuries or death or by way of retiring gratuity;

• The whole amount received from certain funds, such as the provident fund;

• The whole amount received from the sale of securities.

20 CombiNation

Social Insurance In Cyprus, the employer and the employee contribute each 6,8%. The social insurance contribution is restricted to a yearly changing maximum amount. For the year 2012 the maximum amount is an income of € 53.304 (monthly € 4.442). Other contributions made by the employers are the social cohesion fund (2%), the redundancy funds (1,2%), the industrial training fund (0,5%) and the (if not exempt) holiday fund (8%).

Corporation Tax A company is considered to be a tax resident in Cyprus when the company is managed and controlled in Cyprus. A company which is considered to be a Cyprus tax resident is taxed in Cyprus on its worldwide income, derived or accrued from chargeable sources in and outside Cyprus.

A company is considered to be a tax

resident in Cyprus when the company is

managed and controlled in Cyprus

Tax resident An individual is considered to be a Cyprus Tax Resident when he spends, in one calendar year, more than 183 days in Cyprus. Taxes, paid in foreign countries, can be credited against the personal income tax in Cyprus.

Companies who are not considered to be Cyprus tax residents are only taxed in Cyprus on income derived or accrued from a business activity carried out by a permanent establishment in Cyprus and on certain income from sources in Cyprus. Foreign taxes paid by Cyprus tax residents can be credited against their corporate tax liability.

33 CombiNation

20 CombiNation

The corporate tax rate in Cyprus is 10%, which is applicable for all companies, except: • Dividend; • Profit from the sale of securities; • Interest, not arising from the normal business activities; • Profits, under certain conditions, from a permanent establishment outside Cyprus; • The aforementioned types of income are all fully exempt from corporation tax. The dividend and interest income is subject to Special Defence Contribution. Note that by calculating the taxable base, expenses are deductible under certain conditions. All expenses need to be supported by documentary evidence, such as invoices, contracts, agreements etc.

Expenses for a private motor vehicle, inclusive the interest for acquiring, are not deductible. Entertaining expenses are deductible when it is for business purposes, when the amount does not exceed € 17.086 or 1% of the gross income of the business. Incurred losses in a year can be set off against future profits with no time restriction (applicable for losses incurred from the tax year 1997 onwards). There is also the possibility of loss compensation within a group of Cyprus tax based companies.

Expenses for a private motor

vehicle, inclusive the interest for

acquiring, are not deductible

34 CombiNation

20 CombiNation

The International Collective Investment Scheme (ICIS) The objection of ICISs is the collective investment of the funds of the unit holders. This can also be done in a trust, which can be, under certain circumstances, very interesting for international business.

Dividends and interest arising from ordinary activities, received by legal entities from Cyprus and non Cyprus companies are not imposed by Special Defence Contribution. Other interest and Rental income, received by Legal entities are, like individuals, imposed by Special Defence Contribution.

Cyprus tax treaties Cyprus has an extensive tax treaty network, which makes it a valuable partner to avoid double taxation and reduce the tax burden in international situations. Next to that, Cyprus imposes no withholding tax on dividends, royalties and interest paid to non-Cyprus residents.

Individuals: • Dividend from Cyprus companies: 20% • Dividend from non Cyprus companies:

20% • Interest from normal business

activities: 0% (also taxed with personal income tax)

• Other interest income: 15% • Rental income: 3% (also taxed with

personal income tax)

35 CombiNation

royalties and interest paid to

non-Cyprus residents

Companies: There is a special regulation to force Cyprus companies to distribute dividends. In case a Cyprus tax resident company does not pay out dividends within two years after the tax year, then 70% of the accounting profits are deemed to have been distributed and on this deemed dividends, 20% Special contribution Tax is imposed. The deemed distributed dividend is reduced with the dividend which are actually paid out during the relevant year and the following years after the relevant year.

Cyprus imposes no withholding tax on dividends

Special Contribution for Defence This Contribution is imposed on certain income and, in principle, only when the income is earned by Cyprus tax residents. The rates are:

Please note that the above mentioned regulations, rates and exemptions are a brief overview. Always contact a tax specialist for advice.

36 CombiNation

UP

CO

MIN

G EV

ENTS IN

THE W

OR

LD

Trade Mission To Rwanda and Uganda

June 17 to June 23

From June 17 – 23 June 2012, on the request of the Dutch Embassies in Rwanda and Uganda, the Rwanda Chamber Foundation and the Netherlands-African Business Council organize a trade mission to Rwanda and Uganda. The focus of the mission is on food, security (agriculture and horticulture, farming, milk processing) and on energy (Renewable energy and Oil). In addition, other sectors such as ICT, construction, manufacturing, logistics are very welcome.

Participation costs The participation fee is € 250 excl. VAT plus € 350 out of pocket allowance (Food, drinks…). The participants will pay for their flights and hotel costs. For more information and to sign up, please visit the trade mission website www.rwandatrademission.com or call Mr. Folkert Castelein (Rwanda Chamber Foundation) on 0031-629075200.

Bo

n ap

etit ! Gliko tou Koutaliou

or simply Glyko, are traditional Cyprus spoon sweets offered to guests as a symbol of hospitality and served with Cypriot coffee and a glass of cold water. They are not served as desserts, but rather as a sweet snack. In your home, spoon sweets might find a place as a dessert, snack, or a dessert sauce with ice cream, yogurt, cake, and even pastries.

Ingredients: 5 oranges (2 1/2 pounds) 2 ½ cups of sugar 1 cup of water 2 ½ teaspoons of lemon juice

Instructions:

37 CombiNation

1. Wash the oranges rubbing them very well. 2. Slice the orange peel in half, then quarters, then eighths – from the top to the bottom.

Remove the peel from the strips (in the same way you would eat the oranges). 3. Cut the peeled orange strips in half by cutting across the width. 4. Roll the peel strips before cooking them and place them into a saucepan. 5. This next process removes most of the bitterness without removing the flavor, and

softens the peel. Place the rolled peel in a saucepan with approximately 2 inches of cold water; you need just enough cold water to cover them. Bring to the boil and cook for 5 minutes, timing it from when it starts to bubble.

6. Drain in a strainer or colander and rinse under running cold water. 7. Repeat step 5 boiling for 3 minutes. Repeat step 6. Repeat step 7 boiling for 3 minutes

again. Total boiling time: 11 minutes. 8. Lay the pieces of peel on a kitchen towel and allow to dry for several hours. 9. Place the sugar and water in a saucepan and stir until the sugar is dissolved. 10. Bring to the boil over high heat and cook for 5 minutes. 11. Add the orange peel, return to the boil, and cook for about 10 minutes just until the syrup

begins to thicken slightly (it should be quite syrupy - but thick enough to coat a metal spoon).

12. Stir in the lemon juice and remove the pan from the heat. 13. Allow to cool completely before storing in sterilized jars.

Mo

vie recom

men

datio

n

By Sh

ana Jo

seph

w

ww

.shan

ajosep

h.co

m

Tilda Swinton stars in We Need to Talk About Kevin, a fragmented account of a family torn apart as a result of their son Kevin committing mass murder. Gradually pieced together by flashbacks of Swinton’s character’s memories, the film is equally about a mother concerned by her son’s detached and difficult nature as it is about the consequences of his crime.

At the beginning of the film Swinton’s character, Eva, is living alone in a dreary little house and is visibly unwell. She is harassed by members of the community and it is not initially revealed why. Slowly, it is understood that although Eva was once a married mother of two, her suspicion of her Kevin’s behaviour lead to a strained family dynamic. Concerned by his contempt for her, his manipulation of his father and reluctance to accept authority or connect with people in general, Eva grows increasingly worried for her family’s safety.

Essentially, the film explores motive and reason, as well as the notion of parental responsibility and it simultaneously questions evil and its origin. A thought-provoking and well written film, it is masterfully directed by Lynne Ramsay and also stars Ezra Miller and John C. Reilly.

38 CombiNation

Cyprus The ideal holding company jurisdiction By Phani Schiza Antoniou,

managing director of Global Serve

The globalization of investments is a growing trend as capital movements become more mobile and barriers to foreign investments are rapidly disappearing. As a result, investors and businessmen set up holding companies for the purpose of holding their participations around the world, in jurisdictions with low tax costs which enable them to maximize their after tax return on investment and help them to achieve efficient tax repatriation of profits.

The main tax features which make Cyprus the ideal holding company jurisdiction:

Corporation tax Corporate income is taxed at the rate of 10%, the lowest in European Union, in line with Cyprus' longstanding com-mitment towards a steady, low tax fiscal regime.

Generous deductibility rules Under Cypriot law all expenses incurred wholly and exclusively for the production of the income are deducted before arriving at the taxable income.

Tax exemption on disposal of securities The profit arising on the disposal of securities in a private or public company by a Cyprus tax resident company is tax exempt from any tax in Cyprus, provided that securities refer to shares, debentures, government bonds, founder's shares and other securities of companies or legal persons incorporated in Cyprus or abroad and rights thereon. Full exemption from income tax on the liquidation of participations held by the Cyprus holding company or on the disposal of the shares of the holding company.

Incoming Dividends Dividends received by a Cyprus tax resident company from a foreign subsidiary are exempt from corporation tax. They are also exempt from special contribution of Defence. The exemption from special contribution of defence is subject to the conditions that the overseas company paying the dividend does not engage directly or indirectly by more than 50% in activities which give rise to investment income and that the foreign tax burden on the income of the paying company is not significantly lower than the Cyprus tax burden of the company receiving the dividend.

Corporate income Tax

39 CombiNation

Extensive network of agreements The extensive network of double tax treaties that Cyprus has with more than 40 countries, lowers the withholding tax rates on dividends remitted to Cyprus from the subsidiary's jurisdiction, as the terms of the double tax treaty supercede the national law. Moreover, dividends between associated enterprises which are both situated in the European Union are paid without any withholding tax, based on the provisions of the Parent- Subsidiary EU Directive.

Repatriation of dividends from Cyprus Cyprus does not impose any withholding tax on dividends and other profit distri-butions paid by a Cyprus company to non-resident shareholders including individuals and corporations irrespective of country of residence.

Foreign Tax Credit on income Received Income received by a Cypriot company from abroad may have been liable to a withholding tax on payment in the country of origin. If this income is liable to tax in Cyprus, the tax paid abroad can be credited against the tax payable in Cyprus.

Tax Treatment of Losses Losses can be carried forward indefinitely against future profits. Losses incurred abroad can be set off against the company's profits as long as they belong to the same group of companies. Companies which are part of a group (with minimum participation of 75% for the whole fiscal year) can consolidate their results, thus allowing losses of one company to be set off against the profit of another company.

Full exemption from capital gains tax There is full exemption from capital gains tax that arises from the disposal of immovable property held outside Cyprus or shares in companies which may include immovable property held outside Cyprus. Therefore, Cyprus companies can be used to hold real estate outside Cyprus with no capital gains tax impli-cations in Cyprus on their disposal.

Conclusion In light of the above tax benefits, a Cyprus company is most commonly used as an intermediate holding com-pany especially in cases where investors invest in EU countries or in countries with which Cyprus has a double tax treaty. Tax benefits arise to the investors who aim at dividend income as well as significant capital appreciation from the disposal of the shares.

A Cyprus company is most commonly used as an intermediate holding company

40 CombiNation

Globalserve Consultants Ltd is a Cyprus based

advisory and fiduciary firm

Specialized in Cyprus, EU and Non Eu and Offshore Companies

Presence and clientele in more than 25 countries

Globalserve Conultants Ltd

9 Vassili Michaelides

Globalserve Business Centre

3026, Limassol-Cyprus View map

P.O.Box 57048 3311 Limassol-

Cyprus

Main Line: (00357) 25 824545

(00357) 25 817181

Fax: (00357) 25 824055

Email: phschiza@cytanet.com.cy

Website: www.globalserve.com.cy

Based in Cyprus since 1994 and active in the Cyprus and

East European markets

Audit

Tax planning

Tax advisory

Business and financial

consulting

Accounting and VAT services

Payroll and recruitment

We are a member of the Association of the Chartered Certified Public Accountants

Dinos Antoniou & Co Ltd Certified Public

Accountant

9 Vassili Michaelides

Globalserve Business Centre

CY-3026 Limassol – Cyprus View map

P.O.BOX 57048, CY-3311 Limassol - Cyprus

Tel.: 00357-25-824545

Fax: 00357-25-824060

E-mail: dinosant@cytanet.com.cy

Website: www.dinoscpa.com

In the categorie “CombiNation of functionality and creative design” we found for you the i-stuck Bubble Gum Phone Stand

Fun

ction

al & C

reative

42 CombiNation

This phone stand that can hold up your iPhone, Android phone, so you can view your videos at the perfect viewing angle hands-free! Features • Rubberized phone stand designed to

prop up your personal media device • Looks like a wad of bubblegum that

was once stuck to your shoe • Works with any smart-phone, iPod,

or other smooth-backed handheld • Stiffened rubber and plastic - not

really bubblegum (come on, guys, really?)

• 2.5 inches long and 1.5 inches in diameter Found on www.thinkgeek.com

Next ed

ition

In the City

Getting married in Cyprus

New Limassol Marina

The

Bel

giu

m

Co

nn

ecti

on

See you next time

43 CombiNation

And more….

Rondweg 11 G 8091 XA WEZEP

Netherlands E-mail: info@fundatio.nl

www.fundatio.nl Tel: +31 38 73 70 102

We provide a high level of cooperation, efficiency, and

offer our clients global tailor-made solutions, at an

excellent price/ performance ratio

ACTION = REACTION