Cyprus LTD's dividends

[frozzy]

Hi,


I've few questions about dividends handling by Cyprus limited company.


Imagine the Cyprus company invoices some other european company (not-resident company in Cyprus), which has some amount of shares of same Cyprus company.


Then this other european company pays invoice to Cyprus ltd.


Is it legal to:


1. pay dividend to this non-cyprus-resident european company, just after receiving the monies for invoice ?(of course 10% cyprus CIT apply)


2. distribute the cyprus ltd profit as dividend to the shareholders in amounts not connected with theirs volume of shares ?


3. distribute the cyprus ltd profit as dividend to the shareholders many times a year ?


4. have many non-resident shareholders and distribute to them dividend in not equal amounts? i.e. 1st company X € value, 2nd Y € value, whatever directors decides.


Thanks for answers in advance,


BR,


Gregory

 

[JohnLocke]

The most easy way doing all this is to incorporate a Seychelles company first, let it be a holding for the Cyprus LTD and from the Seychelles company share the profits, actually they don't care there at all how you are doing this. You could invoice the Cyprus company every day, week, month's or year for the total amount on the CYP's bank account and get the amount tax free into the Seychelles company

 

[frozzy]

Mhmm that's next entity.


Whole idea is to save for example Polish CIT, because there is a double tax treaty agreement between Poland and Cyprus.


So the prerequisite is to make Cyprus company issue the invoices for Polish company, than payback to Poland as dividend.


Cannot share profits from Seyshelles because there is not agreement with Poland about double dividend tax treaty (those such dividend from Seyshelles should be taxed 19% in Poland)


If distributing the dividend from Cyprus to Sayshelles then to EU, I believe EU benefit entity will need to pay dividend tax, right ?


How it is Cyprus regarding questions 1-4 ?


Thanks,


Gregory

 

[JohnLocke]

1. pay dividend to this non-cyprus-resident european company, just after receiving the monies for invoice ?(of course 10% cyprus CIT apply)
2. distribute the cyprus ltd profit as dividend to the shareholders in amounts not connected with theirs volume of shares ?


3. distribute the cyprus ltd profit as dividend to the shareholders many times a year ?

There are no time restrictions. A Cyprus company can make any number of dividend distributions during the year as it wants.

If distributing the dividend from Cyprus to Sayshelles then to EU, I believe EU benefit entity will need to pay dividend tax, right ?

From Cyprus company to the Seychelles company or any other non Cyprus tax resident shareholder ( either company or individual) there is no withholding tax on dividend payment. If the Seychelles company pays dividend to its EU based shareholder, then it is a matter of the Tax Laws of that EU country whether dividends will be taxed or not.