Cyprus Fact-File Part 4:
Individual Business Tax-Efficient Structures

4.3 Cyprus Individual Business Use Of Offshore

Tax-efficient structures involving offshore jurisdictions

There are no offshore jurisdictions that are especially advantageous for Cyprus-based small businesses, and the low (10%) corporate tax rate presents significant advantages domestically . This being the case, the jurisdictions best suited are likely to be those with which Cyprus has a tax treaty. From this point of view, a location such as Seychelles may be a good choice.

The International Business Company is the most used offshore vehicle in the Seychelles; usually operating as a private company limited by shares.
Requirements include:

Only one director and one shareholder are required;
Shareholders, directors and officers need not be resident in the Seychelles and there is no stipulation as to their nationality;
There is no minimum capital requirement; shares may be either registered or bearer and may be issued in any currency;
Accounts need not be kept; however, if they are kept there is no requirement for an audit;
No returns are needed of shareholders, directors or officers;
Shareholders and directors meetings need not be held in the Seychelles and can be held by telephone;
The Memorandum and Articles of Association are the only documents to be held on the public record.

IBC status is granted provided that:

No business is transacted with residents of the Seychelles;
No ownership interest in real property in the Seychelles is allowed;
Banking, trust, insurance and reinsurance business may be carried on only if an appropriate license is issued.

International Business Companies pay registration fees according to the amount of authorised capital, and continuing annual renewal fees. IBCs are exempt from the Business Tax, from withholding taxes and from Stamp Duty; they can pay social security contributions, but this is unlikely to be of interest to a Cyprus-based entrepreneur.