Structure considerations and tax incentive schemes
What is a Family Office?
A Family Office is a setup established for the purpose of serving high net worth individuals and their families, aiming to preserve and grow their wealth as well as to provide structuring and succession planning advice and strategies. A Family Office can provide further ancillary services as per the request or needs of the Family including concierge services which may range from routine matters of family administration through to the management of companies, luxury assets and properties.
With a clear, pre-defined objective which resonates with the Family’s core values, the smooth functionality of the Family Office will assure financial prosperity.
“We structure and manage global wealth for high-net- worth (HNW) families”
A Single Family Office (SFO) is the traditional type of Family Office. Typically, such an office is established by a wealthy individual seeking to manage the family’s wealth.
Such an office typically retains staff of experts such as a legal advisor, tax advisor, accountant and financial advisor among others.
A Multi Family Office (MFO) is a contemporary and more commercial approach to the traditional setup. In essence it is a company that manages the wealth of more than one family, whilst offering practically the same type of services, including personalized services not related to financial prosperity, as the traditional Family Office.
Why establish a Family Office?
The Functionality of a Family Office
The provision of comprehensive, multi-discipline high caliber advice and services for wealthy families requires the co-ordination, planning and co-operation by an extensive team comprised typically of representatives of the legal, insurance, investment, estate, business and tax disciplines.
Through the deliverance of a compilation of services, a Family Office helps HNWIs navigate the intricacies of the modern economy.
Financial, Business and Taxation Benefits:
- One of the lowest corporate tax rates in Europe, at only just 12.5% of the income of the Company;
- No taxes are extracted from the distribution or receipt of dividends by the Company;
- No taxes are extracted from the payment of interest and royalties;
- Capital Gains taxes are imposed only on the disposition of real estate property situated in Cyprus and on shares of a private company which owns real estate property situated in Cyprus;
- No taxes are extracted from the sale or disposition of securities, bonds, shares and other titles;
- Cyprus allows for tax losses to be transferable over a period of next 5 calendar years;
- No taxes are extracted from the profits obtained by a company on its activities outside Cyprus;
- Corporate mergers or re-organizations are not susceptible to taxation;
- No contributions regarding social security are extracted from the shareholder of a Cyprus company;
- 80% of the income generated by a Cyprus company operating in activities relating to or deriving from Intellectual Property will not be taxed resulting in only 20% of the income being
- susceptible to the 12.5% taxation rate;
- Cyprus has in place over 60 double taxation treaties with other countries such as the United States, and United Kingdom.
- One of the lowest VAT rates in Europe valued at maximum 19%.
- Purchase of a private immovable property with a value of at least EUR 300,000.00 (Three Hundred Thousand Euro) and allows the purchaser to apply and obtain a permanent residency permit;
- Following 7 years of legal residence, the holder of the residency permit is entitled to apply and receive a Cypriot passport;
- Registration of a Company in Cyprus creates an entitlement for the owner and his immediate family to obtain a long term visa and work permit for two years in Cyprus. This visa can be continuously extended;
- Foreign investors are not restricted in any manner with regard to the business they choose to conduct in and are free to do the same with the exception of businesses which require a license to operate such as an Electronic Money Institution or a Gambling business;
- The workforce in Cyprus is among the highest educated workforces in Europe with over 40% of the working population holding a degree of higher education;
- The banking system is secure and no restrictions are imposed on foreign cash circulations;
- The majority of the population are capable of speaking at least two languages, with English being one of them, whilst the diverse and cosmopolitan make up of Cyprus provides a high diversity of internationals and ex-pats as 20% of the Cyprus population are made up of the same;
- The Republic of Cyprus likewise provides a safe and secure environment for its residents, with one of the lowest crime rates and coupled with having one of the highest standards of living in Europe, the Republic is one of the safest country in the world to live and work in;
- The Warm Climate and the presence of Mountains on the Island create a positive leisure environment fit for all the seasonal holidays.
- A great diversity and choice of schooling institutions with Greek, English, Russian and French schools being present on the territory of Cyprus and teaching the respective curriculum in accordance with the same standard in their country of origin.
Anatomy of a Modern Family Office
How can we help?
Here at Fidescorp we pride ourselves on our ability to deliver a comprehensive selection of services, in a timely and cost efficient manner. Our mission is to provide top tier services whilst retaining a level of sensibility in our pricing approach. Our international, diverse and multidisciplinary educated team is capable of providing any of the following services in time-sensitive, discreet and precise manner for the Family and the Family Office:
- Incorporation and Administration of Companies of any type in Cyprus and in any other jurisdiction as per the Family Office requests;
- Provision of a tax structure and consultations;
- Corporate, regulatory and compliance consultations and advisory;
- Dispute Resolution Settlement;
- Legal representation and services;
- Personal and Financial migration services;
- Solutions for income, tax and corporate obligations and optimization;
- Staff and Personnel identification, recruitment and background checks;
- Provision of Nominee Services for Companies, Trust Deeds and other Corporate Elements;
- Advising, Applying and Obtaining any type of license or permit required for business operations;
- Identification, Assessment and Purchase of Private Property, Immovable Property, Securities and Commercial Enterprises;
- Accounting, Payroll, Bookkeeping, Assurance and Audit services;
- Financial and Tax Reporting;
- Corporate, Financing and Transactional advisory services;
- Philanthropic consultations and advisory services;
- Research and Evaluation services;
- Investment and Investment Consulting services;
- Trust Development and Succession planning services;
- Banking and associated services;
- Drafting, Compilation and Development of documents ranging from Legal Opinions to Policies to Business Plans to Articles.