Foreign Interest Company Cyprus

Cyprus Foreign Interest Company

A Cyprus Foreign Interest Company (FIC) is a company registered in Cyprus with the Registrar of Companies and Intellectual Property that meets the legislated criteria. Currently both newly incorporated company and a company that is already established that meets one of the requirements below can register as an FIC.

Qualifying Criteria

To be eligible businesses must have economic substance in Cyprus and meet one of the following criteria:

The most common criteria that are met are:

The majority of the company’s shares are owed by third-country nationals.
If this is not the case, then the company is eligible if the foreign participation has a value of at least €200.000.

In both the above cases (1 & 2), the ultimate beneficial owner (UBO) must deposit an amount of at least €200,000 in an account held by the company in a credit institution licensed by the Central Bank of Cyprus.

Alternatively, the company can submit evidence of an investment amounting to €200,000, for the purposes of operating its business in Cyprus (e.g. purchase of office, equipment etc.).

If there is more than one UBO then the amount of €200,000 can be deposited or invested either by a single UBO or collectively

The Benefits

In addition to the ordinary benefits available to Cyprus companies there are also specific benefits available to FICs and their directors. Below we have broken down some of the various benefits available to you as an individual being the UBO and the company.

Residency and work permits

One of the key benefits of an FIC is the ability to obtain residency and work permits for its non-EU citizen Directors, Middle Management, Key Personnel and Specialists, as well as their families

Corporate Tax Efficiencies

01

15% Corporation Tax: A flat 15% for all resident companies.

02

IP Box Regime: An 80% exemption on qualifying net profits, creating an effective tax rate of 3% or lower on intellectual property.

03

Participation Exemptions: Full exemptions remain on incoming dividends and gains from the disposal of securities/titles (excluding Cyprus real estate).

04

Withholding Taxes: 0% outbound withholding tax on dividends, interest, and most royalties paid to non-residents.

05

Loss Carry-Forward: Available for 7 years.

Personal Income Tax Exemptions

01

Tax-Free Threshold: The first €22,000 of annual income is taxed at 0%, with progressive rates scaling up to a top rate of 35% on income over €72,000.

02

Non-Domicile Status: Non-domiciled tax residents enjoy a 0% Special Defence Contribution (SDC) on worldwide dividend and passive interest income for up to 17 years.

03

A 50% income tax exemption: On income earned through Cyprus based employment provided annual income exceeds €55,000 per annum. The exemption applies for a period of up to 17 tax years.

04

A 20% income tax exemption: On income earned through Cyprus based employment for those earning less than €55,000 per annum. An exemption of up to €8,550 per year applies for a period of up to 7 tax years.

Establish a Cyprus Foreign Interest Company with expert guidance on formation, residency and work permits