By John Neocleous

Nicosia, 27 June 2008 - Cyprus is one of the most advantageous places of residency for Russian and Ukrainian companies. It offers a high level of banking, auditing, accounting and legal services, as well as its real estates, which developed Cyprus into a successful international business and financial centre.

Some of the main factors and advantages which secure Cyprus’ attractiveness to international businesses and investments are the following:

1        10% corporate tax rate for business profits;

2        No withholding taxes imposed on dividends, interest and royalties for non-residents (whether a company or an individual);

3        Income from dividends is exempt from income or corporation tax;

4        The attractive platform and  tax regime that Cyprus provides for a holding company (i.e. subject to certain conditions full exemption from local taxation in respect of dividends received by a holding company from its local and foreign subsidiaries);

5        The attractive platform and  tax regime that Cyprus provides for international trusts;

6        The network of favorable double taxation treaties that Cyprus maintains with more than 40 countries including Russia and most of the ex Soviet Union Republics;

7        Tax advantages available to non-residents including non - E.U. residents;

8        Cypriot tax regime permits losses to be carried forward indefinitely;

9        The geographic location of Cyprus, located at the crossroads of Europe, Asia and Africa;

One of the mentioned above factors is a double taxation treaty between Russia and Cyprus, which provides to Russians many tax advantages. Agreement was signed between Russia and Cyprus for the avoidance of double taxation with respect to taxes on income and capital, back on 17 August 1999. The treaty provides for either the exemption of income in the source country or the provision of tax credit in respect of the foreign tax paid by the country of tax residence.