Branch Registration
Under the provisions of the Companies Law (Cap. 113), a Foreign Company wishing to establish a branch in Cyprus must, within one month of establishing a presence in Cyprus, submit to the Registrar of Companies, the following:
It must also appoint an authorised person, who is resident in Cyprus, that is authorised to:
It must further submit a statement of its ‘objects’, which indicate the nature of the work it intends to carry out legally at its place of business in Cyprus. Depending on the nature of business, certain objects (such as medical, legal and financial services) may require permission, consent or pre-approval.
Upon successful registration of the branch in Cyprus, a Certificate of Registration will be issued. This should be submitted by the authorised representative to the Cyprus Tax Department, together with the with details of the parent company and its business activities, to obtain a Tax Identification Code (TIC). There is also an obligation to register for VAT, if applicable, and a requirement to file annual financial statements.
Taxation of a Branch Office in Cyprus
The overseas parent company of a Cyprus Branch is required to submit to the Cyprus Tax Department, each financial year, copies of its financial statements and tax return in its country of registration. Branches of foreign companies in Cyprus benefit from the same 15% corporate tax rate as Cyprus companies. No further tax is withheld on transfers of profits or funds to an overseas head office.
There is no withholding tax on dividends, interest and royalties paid to non-residents, and branches of foreign companies in Cyprus benefit from full access to EU parent-subsidiary directive. Cyprus also maintains more than 65 double tax agreements around the world.
If the ‘effective management and control’ is not deemed to be in Cyprus, then any profits of the branch are fully exempt from corporate tax in Cyprus and the parent company will need to report such profits for the tax authority in its country of registration.
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