ANDREAS COUCOUNIS & CO LLC LAWYERS- LEGAL CONSULTANTS www.coucounis.com

1. ANDREAS COUCOUNIS & CO LLC LAWYERS- LEGAL CONSULTANTS www.coucounis.com The Legal Business of Establishing a Company in Cyprus Presented by Tasos Coucounis couclaw@spidernet.com.cy Moscow, June 2010

2. HOW CAN I USE CYPRUS TO CARRY OUT MY BUSINESS? • COMPANY • BRANCH OF A FOREIGN COMPANY • TRUST • INTERNATIONAL PARTNERSHIP • INTERNATIONAL COLLECTIVE INVESTMENT SCHEME (“PRIVATE EQUITY FUNDS”)

3. WHY DO WE NEED A COMPANY STRUCTURE? • Flexible & secure form of carrying out a business • Ability for many people to participate in a business through ownership of shares • Avoidance of personal liability • Tax benefits

4. WHAT IS THE LEGAL FRAMEWORK? • Legal System: Common Law tradition from UK • Companies Law, Cap.113: based on English Companies Law Act of 1948 • Private Limited Liability Company & Public Limited Liability Company • Amendments to accommodate EU entry in 2004 • Case law • Compliance with OECD and EU law • Impressive number of Double Taxation Treaties

5. DOUBLE TAXATION TREATIES QATAR ROMANIA RUSSIA SAN MARINO SERBIA SEYCHELLES SINGAPORE SLOVAKIA SLOVENIA SOUTH AFRICA SYRIA SWEDEN TAJIKISTAN THAILAND UKRAINE UNITED KINGDOM USA UZBEKISTAN ARMENIA AUSTRIA BELARUS BELGIUM BULGARIA CANADA CHINA CZECH REP. DENMARK EGYPT FRANCE GERMANY GREECE HUNGARY INDIA IRELAND ITALY KUWAIT KYRGYZTAN (CIS) LEBANON MALTA MAURITIUS MOLDOVA (CIS) MONTENEGRO NORWAY POLAND

6. WHAT TYPE OF ACTIVITY CAN A CYPRIOT COMPANY DO? • Ship-owning & Ship management Companies • Holding & Investment Companies • Real Estate Companies • Royalty Companies • Dividend Companies • Trading-Invoicing Companies • Finance Companies • Trust Companies • Internet and E-commerce Companies • Insurance Companies

7. HOW IS A CYPRIOT COMPANY FORMED? • “Know Your Client” documentation • Approval of preferred name or pre-approved • Shareholders: private or public company/nominees: no physical presence • Constitution of company: wide purposes, local & international activities • Articles of Association • No minimum share capital if private company

8. HOW DOES A CYPRIOT COMPANY OPERATE? • Full-fledged offices • Employment/Resident permits for foreign staff • Company Administration through use of local Directors • Satisfaction of Management & Control Test • Registered Office/Secretarial Services/Banking • Cypriot Company Advantages: lowest tax rate in Europe/no tax on disposal of shares

9. BRANCH OF A FOREIGN COMPANY • Registration with Cypriot Registrar of Companies • Production of Company Constitutional Documents • Local Management & Control • Same tax advantages to the branch as a Cypriot Company

10. INTERNATIONAL PARTNERSHIP • Formed by Non-Residents • Individuals or Companies • Tax Free Activities

11. CYPRUS INTERNATIONAL TRUST • “a legal relationship created inter- vivos or on death of a person, the settlor when assets have been placed under the control of a trustee for the benefit of a beneficiary for a specific purpose” • International Trusts Law of 1992, Law 69(I)/1992

12. CYPRUS INTERNATIONAL TRUST [1] Created by will or document by Settlor [2] Of benefit to one or more individuals: Beneficiaries [3] Many types (Express, Discretionary) [4] Its objects must be certain [5] Legal ownership of assets to the Trustee [6] Protector [7]Stipulation as to governing law

13. CYPRUS INTERNATIONAL TRUST Prerequisites: [1] Settlor (individual, company, partnership) must NOT be resident of Cyprus [2] At least one of trustees must be Cyprus resident [3] Beneficiaries must be non Cyprus residents [4] Trust property cannot include Cyprus immovable property

14. CYPRUS INTERNATIONAL TRUST Formality Stump duty on trust deed (Euro €430 approx.) Duration Up to 100 years

15. CYPRUS INTERNATIONAL TRUST Tax Treatment: [1] Income obtained from sources outside Cyprus subject to NO tax [2] Financial assets NOT subject to inheritance tax [3] Dividend interest and royalties received by an international business company, exempt from income tax in the hands of the trustee [4] NO tax on beneficiaries receiving dividend interest and royalties through the trust

16. INTERNATIONAL COLLECTIVE INVESTMENT SCHEMES • Law 47(I)/1999/Framework for operation of equity funds from Cyprus • International Fixed or Variable Capital Company International Unit Trust Scheme International Investment Limited Liability Partnership • Marketed to general public, experienced investors or private individuals • Investment income collection & Distribution of profits at zero tax • Legislative changes/favourable tax treatment

17. CYPRUS IS A PLACE IDEAL FOR BUSINESS • Reputable business destination • Competitive International Financial Centre with great potential • Business friendly with simple and effective procedures • Legal tools easy and comprehensive to use • Promotion of business, protect assets, earn money without paying it all out in taxes

18. ANDREAS COUCOUNIS & CO LLC LAWYERS- LEGAL CONSULTANTS www.coucounis.com THANK YOU! Presented by TASOS COUCOUNIS couclaw@spidernet.com.cy Moscow, June 2010