LEGAL 500 – 2019 Ranking

Our Law Firm continues strengthening and securing its positions in the international legal rankings directory The Legal 500: Europe, Middle East & Africa.

We are pleased to announce that our Law Firm has once again been named and recommended as the as a TOP-TIER FIRM in Commercial, Corporate and M&A as well as Maritime and Admiralty.

Furthermore, our Law Firm has been recommended in the additional 3 practice areas:

  1. Dispute Resolution
  2. Intellectual Property
  3. Real Estate and Construction

We are proud to announce that our Commercial, Corporate and M&A Department received again Tier 1 recognition. Our firm is noted as one which has “a highly qualified team that finds solutions…has considerable skill in cross-border mergers and acquisitions. Koulla Demetriou is recommended along with the ‘very organised and competent’ Michalis Pittakis. Senior Associate Maria Taki is ‘smart and highly professional.”

Also, our Maritime and Admiralty Department team maintained Tier 1 recognition and has been characterized as“energetic and professional team adopts a very client-oriented approach to matters. The group serves as deputy registrar of the Belize-ship registry in Cyprus and Greece.”

Our Intellectual Property Department team received Tier 3 recognition and has been characterized as one which “gets the job done’ and advises on all forms of registered and unregistered intellectual property rights. Maria Kyriacou is at the helm”.

The Real Estate and Construction Department team received Tier 3 recognition and has been cited as following: “advises wealthy foreign clients on their real estate holdings in Cyprus. Savvas Georgiou and Marianna Pavlides have considerable experience in the space”.

And finally, Dispute Resolution Department team received Tier 4 recognition and was noted as a team which “works together as a cohesive unit to ensure that the client is consistently given the best legal advice. Phivos Zomenis is a key name and Christodoulos Clerides is a master tactician with superb negotiation skills”.

We are also very proud that 8 of our lawyers are recommended for their excellence:

  • In relation to our main area of practice, Commercial, Corporate and M&A, our Deputy Managing Director Koulla Demetriou and Senior Associate Lawyer Maria Taki were recommended.
  • Michalis Pittakis, Head of Corporate Department, was proclaimed as a Legal 500 “Next Generation Lawyer”.
  • For Dispute Resolution Phivos Zomenis is recommended.
  • Christodoulos Clerides is listed in the elite “Leading lawyers” list.
  • In relation to Intellectual Property, Maria Kyriacou is recommended.
  • Finally, in relation to Real Estate and Construction Marianna Pavlides and Savvas Georgiou are recommended.

In light of these achievements we would like to extend our sincere thanks to all our clients, without whom these recognitions would not have been possible.

For a complete view of our profile here.

Legal Update: Extension of Golden Visa Program to New Types of Investments

Law 4605/2019 which was published at the Greek Official Gazette on 01/04/2019, amended the Greek Immigration legislation and more particularly article 16 regarding Residence Permits for Investment Activity and introduced new types of investments (other than investment in real estate properties) qualifying for the “Golden Visa Program”.

According to the amended provisions of article 16:

– Within the framework of an investment scheme, there is no limitation on the number of investors, natural persons from non- EU countries, who may participate in the financing and receive a relevant residence permit, provided that each invests at least the minimum required amount, and

– It is heretofore possible to qualify for a residence permit when the investment is made through the participation of a foreign legal entity. In that case, the amended law provides for the possibility for up to 3 persons (shareholders or officers of the legal entity) to apply, depending on the amount of the investment.

Further to the amendments introduced, it also remains possible, in order to ensure the implementation and operation of the investment scheme, for up to 10 non- EU persons to apply for a residence permit in Greece, such number varying depending on the total amount of the investment.

In addition to the foregoing, new provisions are introduced in the aforementioned paragraph 16, operate an extension of the Golden Visa Program to new types of investments, by including also intangible investments to the investment activities pursuant to which a residence permit may be granted to non- EU citizens.

Such investments may be:

  • the contribution of capital for the acquisition of shares during the increase of share capital or bonds during the issue of bond loans in certain types of companies, for an amount of at least 400 000 euros,
  • the acquisition of Greek Public bonds for an amount of at least 400 000 euros,
  • a long term deposit of an amount of at least 400 000 euros,
  • the acquisition of shares, corporate bonds and bonds of the Greek Government, which are which are inserted to be listed or are listed in regulated markets in Greece, of an amount of at least 800 000 euros,
  • the acquisition of a share in an investment fund established in Greece or abroad, whose object is the investment exclusively in shares, corporate bonds and bonds of the Greek Government, of an amount of at least 400 000 euros.

For the aforementioned investments, the investor may be a natural person or a Greek legal entity wholly owned by the non- EU citizen or a foreign legal entity, in which case a residence permit may be granted to up to 3 persons, shareholders or officers, depending on the amount of the investment.

The non- EU investor meeting all the criteria required by law, must first apply and receive a visa for “investment in securities or bank deposit” and thereafter may apply for a 5- year residence permit for investment in securities or bank deposit, which may be renewed provided that the conditions are still fulfilled.

The aforementioned provisions shall enter into effect 3 months after its publication in the Official Gazette.

For more information please do not hesitate to contact us.


*This publication is intended only to provide general information and does not constitute personal advice. We do not accept or assume any responsibility towards readers of the present document for any loss resulting from acting on the basis of this publication.

CYPRUS INVESTMENT PROGRAM: AMENDMENTS TO THE SCHEME

Based on the decision number 81.292, 84.068 and 84.957 dated 13/09/2016, 09/01/2018 and 21/05/2018, the Council of Ministers approved the following amendments to the Scheme, effective as of 13/02/2019:

  1. The investor must make a donation amounting to €75,000 to the “Research Promotion Foundation”. *
  2. The investor must make a donation amounting to €75,000 to the “Cyprus Land Development Corporation”. *
  3. The investor is required to maintain their investment for the period of at least 5 years from the date of naturalisation, previously the investor had to maintain their investment for at least 3 years.
  4. The investor can replace the investment, within the period of 5 years upon prior approval from the Ministry of Finance.
  5. Investment made in the Cyprus shipping industry will be considered as eligible criterion for the Cyprus Investment Program (CIP).
  6. The investor can now also make an investment in Registered Alternative Investments Organizations (UCITS), the UCITS will have the right/option to invest up to € 200,000 in the secondary markets of the Cyprus Stock Exchange.
  7. In case where residential property is acquired, and had already been used for the purposes of the Cyprus Investment Program (CIP), the investment amount increases from €2m to €2.5m. *
  8. The investment in Government bonds has been abolished.
  9. In case the investor invests in real estate development & infrastructure projects, the following documents must be provided to the authorities: *
    i) Planning permit;
    ii) Certificate of Completion, duly executed by the architect of the project;
    iii) In case where the property is under construction, at least 5% of the total value of the property must be blocked via a bank guarantee, the relevant amount will only be released to the Vendor upon completion of the property;
    iv) In case where there is a mortgage on the property to be acquired, a bank waiver letter must be in place.
  10. The applicant must be a holder of a valid Schengen visa.
  11. In the event that the applicant has submitted an application to another Member State for citizenship and the application has been rejected, the investor will not be able to apply for the Cyprus Investment Program.

Note: All remaining terms and conditions to the Program remain the same and a detailed analysis of the updated Program will be provided in our upcoming brochure.

* Changes effective from 15/05/2019

View PDF (EN) View PDF (RUS) View PDF (CH)

Deputy Ministry of Shipping – Cyprus

In recent years, efforts have been made to upgrade and further develop the maritime industry of Cyprus.

When the Deputy Ministry of Shipping begun its operation, 168 companies were registered under the Cyprus tonnage tax system while today it has risen up to 191 companies in total.

The Deputy Minister of Shipping, Ms. Natasa Pilides stated that attempts are being made to simplify the procedures and modernize legislation so as to make Cyprus more competitive as a Register and as a maritime cluster. She also highlighted that attempts are being made to digitalize and modernize the Cyprus systems in order to make the Cyprus Registry even more attractive.

The budget of the Deputy Ministry for the year 2019 is 9.8 million euro compared to 8.1 million euros for the year 2018, i.e. an increase of 1.7 million euros. This is due to the large increase in the budget expenditure growth which is mainly because of the commercial shipping promotion and development activities.

The Deputy Ministry’s revenue for the year 2018 is estimated around 12 million euro while the indirect incomes of the maritime industry is estimated at 800 million euros which amounts to 7% of the GDP of the island. According to Ms. Pilidou, there are currently around 1100 seagoing ships and 600-700 small vessels under the Cypriot flag.

Based on these facts it is evident that the maritime industry of Cyprus is gradually evolving. The shipping fleet of Cyprus is the 10th largest worldwide and has 25% of the whole EU fleet. By continuously updating its services and striving for perfection in the field of shipping it will not be a surprise if Cyprus conquers the top in the near future.

Legal Update: Amendments to the Greek Tax Legislation

On 28/11/2018, the Greek Parliament voted important amendments to the Greek tax legislation such as the reduction of the property tax for the year 2019 for certain owners of real estate in Greece as well as a gradual decrease of the Greek corporate income tax.

More specifically, with a view to encourage investments and improve competitiveness of businesses, article 58 of the Greek Income Tax Code is amended so as to gradually decrease the tax rate applicable to profits from business activity of corporate entities from 29% (corporate income tax rate applicable today) to 25% for income earned as of the financial year 2022 and the following years.

As such, the Greek corporate income tax rate shall be reduced by 1% per year, applicable as of the income of the financial year 2019. Thus the income of the financial year 2019 shall be subject to a rate of 28%. Accordingly, for 2020 the tax rate shall be 27% and for 2021 the tax rate shall be 26%.

The Parliament, aiming to provide relief to the tax payers who are owners of low value real estate in Greece, further voted a decrease of the Greek property tax (ENFIA) for the year 2019.

According to the amendment introduced, specifically for the year 2019, when the total value of the real estate property held by a natural person which is subject to property tax, is up to the amount of 60 000 euros, the corresponding property tax shall be reduced by 30%. When the total value of the said real estate exceeds the amount of 60 000 euros, for the excess thereof, the amount of reduction of the tax (30%) shall be reduced by 0.7 euros per 1000 euros of the real estate and may not exceed 100 euros.

Mackrell International EMEA Regional Meeting

On the 16th to the 18th of November, the Mackrell International EMEA Regional Meeting took place in Brussels, Belgium.

The core meaning of this meeting was to network with other Mackrell International Members, discuss cross border matters and collaborative opportunities and to co-operate with the Business Development team so as to develop social media, practice group and promotional initiatives to which all members could contribute and as a result benefit from it collectively.

Mackrell International is an international legal network with lawyers from 60 different countries of the world, including 90 firms with 4500 lawyers in total.

Our firm, is an active member in this global network. Ms. Sanela Trzin, Barrister (England and Wales) and Cyprus Advocate in our Law Firm was invited and took part in a Business Development Panel Discussion addressing best practices in developing business for our Law Firm and how those can be applied to the network.

IELP EXPO

The International Expo Emigration and Luxury Property Conference took place in Cannes on the 9th of November until the 10th of November. Christodoulos G Vassiliades & Co LLC representatives attended the Conference and even exhibited the services they provide. Ms. Marianna Pavlides, advocate and Head of the Immigration Department of Christodoulos G Vassiliades & Co LLC was one of the speakers of the Conference with topic ‘Cyprus Citizenship and Residency Programs’.

IELP Expo covers a variety of topics including dual residency in highly developed countries, temporary and permanent residency in highly developed countries, acquisition of luxury real estate either for permanent or seasonal residence, how to gain temporary or permanent residency through investment among many others.

It is an excellent opportunity to obtain further information regarding immigration, real estate acquisition, and personal financial consulting services and is of special interest to visitors from Russia, Ukraine, Kazakhstan, Azerbaijan, and other CIS countries, China, India, UAE and other Middle East countries, South Africa, and the EU.

 

ДОМИЦИЛЬ НА КИПРЕ

Стремясь повысить конкурентоспособность, справедливость и простоту кипрской налоговой системы и сделать ее более привлекательной для иностранных инвесторов, 9 июля 2015 года правительство Кипра приняло концепцию «домициль».

Введение правил домициля направлено на привлечение высокооплачиваемых лиц на переезд на Кипр, использование Кипра в качестве делового центра и перевод головного офиса своего бизнеса, создавая тем самым фактическое присутствие.

НАЛОГООБЛОЖЕНИЕ И ОПРЕДЕЛЕНИЕ НАЛОГОВЫХ РЕЗИДЕНТОВ КИПРА

Налоговые резиденты Кипра облагаются как подоходным налогом, так и специальным взносом на оборону (СВО) на свой мировой доход.

Налоговым резидентом Кипра является:

a. Лицо, которое проводит более 183 дней в течение налогового года в Республике Кипр;

ИЛИ

б. Лицо, которое проводит 60 дней в течение налогового года в Республике Кипр и соответствует ВСЕМ нижеперечисленным критериям:

  •  Он/она не является налоговым резидентом или не является резидентом в любой другой стране в течение налогового года (более 183 дней в году);
  •  Он/она осуществляет предпринимательскую деятельность на Кипре и/или работает на Кипре и/или имеет офис в компании, являющейся налоговым резидентом на Кипре, в любое время в течение налогового года; и
  •  Он/она имеет постоянный дом на Кипре, который либо принадлежит ему/ей, либо арендуется им/ей.

Если занятость/бизнес или владение офисом по второму условию прекращаются в течение финансового года, то лицо перестает считаться налоговым резидентом Кипра в течение этого налогового года в соответствии с новыми правилами.

ПОПРАВКИ В ЗАКОН О СПЕЦИАЛЬНОМ ВЗНОСЕ НА ОБОРОНУ

В соответствии с введенными правилами домициля лицо, являющееся налоговым резидентом на Кипре в соответствии с положениями Закона о подоходном налоге («Закон»), НО «не имеющее домициль на Кипре», освобождается от уплаты СВО.

В контексте Закона термин «домициль на Кипре» определяется как:

а. Лицо, имеющее домициль по происхождению в Республике Кипр, в соответствии с положениями Закона о завещаниях и наследовании, который является домицилем его/ее отца на момент его рождения;

ИЛИ

б. Лицо, которое считается налоговым резидентом Кипра в соответствии с Законом о подоходном налоге в течение последних 17 из 20 лет до соответствующего налогового года, независимо от места его/ее проживания.

Вышеприведенное определение НЕ БУДЕТ применяться:

a. Если лицо приобретает и поддерживает избранный домициль за пределами Республики Кипр в соответствии с Законом о завещаниях и наследовании, при условии, что это лицо не является налоговым резидентом Кипра в соответствии с Законом о подоходном налоге в течение любого периода, на протяжении 20 лет подряд до соответствующего налогового года.

Согласно Закону о завещаниях и наследовании, человек приобретает избранный домициль, предпочитая жить в любом месте за пределами Республики Кипр, с целью сделать его своим постоянным или бессрочным домом, но не иначе.

Поэтому для того, чтобы приобрести избранный домициль, лицо должно иметь:

  • намерение приобрести избранный домициль (animus); и
  • фактическое присутствие (factum),

ИЛИ

b. Когда физическое лицо не являлось налоговым резидентом Кипра в соответствии с Законом о подоходном налоге в течение последних 20 лет до вступления в силу поправки к Закону, а именно до 16 июля 2015 года.

Таким образом, даже если лицо имеет домициль по происхождению на Кипре, он  может не иметь статус домициля в Республике Кипр согласно настоящему положению Закона.

Некоторые общие понятия:

  • Лицо должно иметь домициль постоянно;
  • Лицо может иметь только один домициль на определенный момент времени;
  • Существующий домициль имеет силу до тех пор, пока не будет заменен новым;
  • Домициль не зависит от национальности, гражданства и статуса резидента.

ПРЕИМУЩЕСТВЕННЫЙ НАЛОГОВЫЙ ЭФФЕКТ

Налоговый резидент Кипра, не имеющий домициль на Кипре, облагается ТОЛЬКО Налогом на прибыль, и освобождается от СВО. Следовательно, данное лицо освобождается от СВО, в отношении дивидендного дохода, процентного дохода (который не связан с обычной деятельности) и дохода от аренды, вне зависимости от того, был ли доход получен из источников на Кипре или за его пределами.

THE CYPRUS NON-DOMICILE SCHEME

In an effort to enhance the competiveness, fairness and simplicity of the Cyprus tax system and to make it more attractive to foreign investors, the Cyprus Government passed on 9th July 2015, among others, the “Domicile” concept.

The introduction of the non-domicile rules aims to attract high-earners to relocate to Cyprus, by using Cyprus as a business centre and transferring the headquarters of their business thus creating real substance.

TAXATION AND DEFINITION OF CYPRUS TAX RESIDENTS

Cyprus Tax Residents are subject to both Income Tax and Special Defence Contribution (SDC) on their worldwide income.

A Cyprus Tax resident is EITHER:

a. An individual who spends a period or an aggregated period of more than 183 days in a tax year in the Republic of Cyprus;

OR

b. An individual who spends 60 days in a tax year in the Republic of Cyprus and satisfies ALL of the following criteria:

  • He/she is not tax resident nor resident in any other country within a tax year by spending more than 183 days in that country, that year;
  • He/she carries on business in Cyprus and/or is employed in Cyprus and/or holds an office in a Cyprus tax resident company at any time during the tax year; and
  • He/she maintains a permanent home in Cyprus that is either owned or rented.

If the employment/business or holding of an office as per the second condition is terminated during the fiscal year, then the individual shall cease to be considered a Cyprus tax resident for that tax year under these extended rules.

 

THE AMENDMENT OF THE SPECIAL DEFENCE CONTRIBUTION

According to the domicile rules introduced, an individual who is a tax resident in Cyprus under the provisions of the Income Tax Law (“the Law”) BUT is “not-domiciled” in the Republic of Cyprus, will be exempt from SDC.

For the purposes of the Law, the term “domiciled in Cyprus” is defined as EITHER:

a. An individual who has a domicile of origin in the Republic of Cyprus, according to the provisions of the Wills and Succession Law, which is the domicile of his/her father at the time of his birth;

OR

b. An individual who is considered a Cyprus tax resident, as per the Income Tax Law, for a period of at least 17 years out of the last 20 years before the relevant tax year, irrespective of his/ her domicile of origin.

The above definition WILL NOT apply:

a. Where an individual acquires and maintains a domicile of choice outside the Republic of Cyprus as per the Wills and Succession Law, provided that this individual was not a Cyprus tax resident as per the Income Tax Law for any period of at least 20 consecutive years before the relevant tax year.

According to the Wills and Succession Law, an individual acquires a domicile of choice by choosing to live in any place outside the Republic of Cyprus, with the intention of making it his/her permanent or indefinite home, but not otherwise.

Therefore, in order for a domicile of choice to be acquired, both must exist;

  • the intention to acquire a domicile of choice (animus); and
  • residence (factum),

OR

b. Where an individual has not been a Cyprus tax resident as per Income Tax Law for a period of at least 20 consecutive years immediately before the amendment of the Law came into effect, namely on the 16th July 2015.

Thus, even if an individual has a Cypriot domicile of origin, he/she may not be considered as domiciled in the Republic of Cyprus under this provision of the Law.

Some general points are:

  • an individual cannot be without a domicile at any given time;
  • any individual can only have one domicile at each particular time;
  • the existing domicile continues until a new one is acquired;
  • domicile is distinct from nationality, citizenship and residence status.

 

ADVANTAGEOUS TAX EFFECT OF THE SCHEME

A Cyprus tax resident who is not domiciled in Cyprus would be liable ONLY to Income Tax and would be exempt from SDC. Consequently that individual would be exempt from SDC regarding income from Dividends, Interest (which is not connected to the ordinary carrying on of a business) and Rent irrespective of whether these derive from sources in Cyprus or abroad.

International Comparative Legal Guide (ICLG) to Corporate Immigration 2018

Our Firm is pleased to announce that our Managing Director, Mr. Christodoulos G. Vassiliades, as well as our Head of Immigration, Ms. Marianna Pavlides, recently published an article in the ICLG Corporate Immigration Guide: A practical cross-border insight into corporate immigration law, 5th Edition.

To read the publication please click on the link below.

ICLG to Corporate Immigration 5th Edition