Month: March 2023

The Benefits Available Through the Incorporation of Nevis International Business Corporations and Limited Liability Companies

Posted on | by Hristina Georgieva

Nevis, a small island nation in the Caribbean, is known for its favourable business environment and strong asset protection laws.

Among the popular business entities available for establishment in Nevis are the Nevis Limited Liability Company (LLC) and the Nevis International Business Corporation (IBC). Historically they had marked differences, but the law has changed over time so that they now broadly offer the same thing. The main difference being that the LLC is owned by members and controlled by managers and the IBC is more similar to the traditional offshore company with shareholders and directors and has ‘Limited’ in the name.

Why incorporate a company in Nevis?

Tax Benefits: Nevis offers a favourable tax regime for companies, including no corporate income tax in most circumstances*, no capital gains tax, and no withholding tax on dividends or interest payments.

*contact advice.nevis@dixcart.com for further information

Asset Protection: Nevis has strong asset protection laws that make it an attractive jurisdiction for business owners who want to protect their assets from creditors and lawsuits. Nevis’ laws make it difficult for creditors to seize assets held in Nevisian entities, which can help to shield a business owner’s personal assets from business liabilities.

Privacy and Confidentiality: Nevis offers a high level of privacy and confidentiality for companies and their owners. Nevis has strong privacy laws that ensure the confidentiality of a company’s financial and ownership information. Nevis LLCs are not required to file annual reports or disclose any financial information to the public and there are no centrally held beneficial ownership or director registers.

Simplified Corporate Governance: Nevisian corporate law provides for a simplified corporate governance structure, which can make it easier and less costly for companies to operate. For example, Nevis allows for single-member LLCs, which do not require the appointment of officers or directors. IBCs allow a minimum of one director which can be an individual or a corporate.

Flexibility in Company Structure: Nevis offers a range of structures, including LLCs, corporations, and trusts, which can provide flexibility for business owners in terms of management, taxation, and liability. Additionally, Nevis allows for the formation of hybrid entities, such as a Nevis LLC that decides to transform to a Nevis Multiform Foundation, which can provide even more flexibility. See alternative notes regarding Nevis Multiform Foundations and Nevis Trusts for further information on these types of entities.

Fast incorporation: Once we have gathered all of the required due diligence, Nevis LLCs and IBCs can be incorporated within 48 hours, making them a convenient option for clients looking to set up corporate entities quickly.

Low maintenance costs: Nevis IBCs and LLCs have low annual maintenance costs, making them affordable options for small businesses.

How to set up a Nevis Corporate Entity

  1. Select a Company name
  2. Appoint a Registered Agent, such as Dixcart
  3. Provide the required due diligence to the Registered Agent on all parties to the Company
  4. Review / draft the company statutes
  5. Incorporation with the Nevis Registry by Registered Agent

Summary

In conclusion, both Nevis LLCs and Nevis IBCs offer a variety of benefits to individuals looking to establish a corporate structure in Nevis. It is also worth noting that both LLCs and IBCs are required to file an annual tax return with the Nevis Inland Revenue Department annually and that all corporate entities must be incorporated by a local service provider and must maintain a registered office and registered address in Nevis, Dixcart Management Nevis is happy to offer this service to our Clients.

Additional Information

If you require additional information regarding the jurisdiction of St Kitts & Nevis and the services offered, speak to Beth le Cheminant at the Dixcart office in Nevis: advice.nevis@dixcart.com.

Considering a Residential or Business Move to the UK? Read our Practical Guide to Residential and Commercial Property in the UK

Posted on | by Hristina Georgieva

Can foreigners buy property in the UK?

Yes. There is nothing stopping a non-UK resident individual or corporate body buying property in the UK (although an individual will need to be aged 18 years or above to own legal title to property and an overseas corporate entity must before acquiring a qualifying property firstly be registered at Companies House in compliance with the Economic Crime (Transparency and Enforcement) Act 2022).

Other than the above, different laws apply in Scotland and Northern Ireland as opposed to property in England and Wales.  We will focus below on property located in England and Wales. If you intend to purchase property in Scotland or Northern Ireland, please seek independent advice from a specialist in those areas.

The below guidance is focused on property located in England and Wales.

How do you begin your property search?

There are a number of online property search engines. Traditionally agencies either specialise in commercial or residential property but not both.  Start with a search engine to compare properties in your chosen city or other location and get in touch with the local agent advertising the property to arrange a viewing. Negotiating price below the price advertised is common.

Why is it important to view a property?

Once you find a property it is important to see it, carry out the usual pre-contract searches against it (a property solicitor or registered conveyancer will be able to assist you) or ask a surveyor to view it.  

The principle of caveat emptor (“let the buyer beware”) applies at common law. A buyer alone is responsible for checking a property. To purchase without carrying out a viewing or survey will in most cases be at the entire risk of the buyer. Sellers will normally not provide warranties or indemnities as to the suitability of the property. 

How do you finance the purchase?

The estate agent and any professionals involved in the sale will be interested to know how you intend on financing the purchase. This could be with cash, but the majority of property purchased in England and Wales is through a mortgage/property loan. There are no restrictions on foreigners securing a UK mortgage to help finance a purchase although you might encounter stricter requirements, the obligation to pay a larger deposit and higher interest rates.

What type of legal “estate” to the property are you intending on buying?

Generally, property is either sold with freehold title (you possess it absolutely) or leasehold title (borne out of freehold property which you possess for a number of years) – both are estates in land. A number of other legal interests and beneficial interests also exist but these are not covered here.

His Majesty’s Land Registry holds a register of all legal titles. If your offer price is accepted your legal advisor will review the relevant register of legal title for that property to see if the property you are buying is being sold subject to any incumbrances. Pre-contract enquiries will also normally be raised with the seller to ensure there are no over-riding third party interests in the property that may not have been obvious from your site visit.

If more than one purchaser wants to own the property, how will that property be held?

The legal title to property can be held by up to four legal owners. 

There may be tax advantages or disadvantages to how you decide to hold property as legal owner and whether that is by individuals or corporate entities or a combination of both. It is important to take independent tax advice at an early stage. 

Where the property is intended to be held by co-owners, consider whether the legal title should be held by the co-owners as “joint tenants” (the beneficial ownership of each pass on death to the other co-owners) or as “tenants in common” (the beneficial share owned, passes on death to their estate or dealt with under their will).

What happens next?

You have found a property and your offer price has been accepted and you have decided who will hold the legal title to the property. What happens next?

You will need to instruct a solicitor or conveyancer to carry out the relevant due diligence, raise enquiries, carry out the usual pre-contract searches and advise you on potential tax liability. You will need to pass the usual “know your client” due diligence before the legal work gets underway so be prepared to locate the relevant documents needed for the usual money laundering and other checks.

When purchasing a freehold or leasehold subject to a premium, a contract is usually drafted and negotiated between the parties. Once it is agreed, the contract is “exchanged” at which point a deposit is paid to the seller’s solicitor (usually around 5 to 10% of the purchase price). Once a contract is exchanged both parties are bound to perform the contract (sell and buy) pursuant to the terms of the contract.  “Completion” of the transaction happens on a date set out in the contract and is typically a month later but can be sooner or much later, depending on whether the contract is subject to conditions being satisfied.

Upon completion of the transfer of freehold or long leasehold property, the balance of the purchase price will become payable. For new short leases of both commercial and residential properties, once the new lease is dated, the matter has completed and the landlord will send the new tenant an invoice for rent, service charges and insurance as per the terms of the lease.

The buyers’/tenants’ solicitor will need to make an application to His Majesty’s Land Registry to register the transfer/new lease. The legal title will not pass until the registration is complete. 

What taxes need to be considered when taking a leasehold title or a freehold title?

The tax treatment from owning a freehold or leasehold in the UK will largely be dependent on why the individual or corporate entity holds the property.  A purchaser may buy or lease a property to reside in, occupy premises to conduct their own trade from, own to develop in order to realise a rental income or buy as an investment to develop and sell on for a profit.  Different taxes apply at each stage so it is important to speak with a tax specialist early on, depending on what plans you have for the property. 

One tax that is payable within 14 days of completion of a lease or property transfer in England  (unless one of the limited reliefs or an exemption applies) is stamp duty land tax (“SDLT”).

For residential properties see the following rates below. However, a surcharge of an additional 3% is payable on top if the purchaser already owns property elsewhere:

Property or lease premium or transfer valueSDLT rate
Up to £250,000Zero
The next £675,000 (the portion from £250,001 to £925,000)5%
The next £575,000 (the portion from £925,001 to £1.5 million)10%
The remaining amount (the portion above £1.5 million)12%

When buying a new leasehold property, any premium will be subject to tax under the above. However, if the total rent over the life of the lease (known as the ‘net present value’) is more than the SDLT threshold (currently £250,000), you’ll pay SDLT at 1% on the portion over £250,000. This does not apply to existing (‘assigned’) leases.

If you’re not present in the UK for at least 183 days (6 months) during the 12 months before your purchase, you are ‘not a UK resident’ for the purposes of SDLT. You will usually pay a 2% surcharge if you’re buying a residential property in England or Northern Ireland. For more information on this, please read our article: Overseas buyers thinking of purchasing a residential property in England or Northern Ireland in 2021?

On commercial property or mixed-use property, you will pay SDLT on increasing portions of the property price when you pay £150,000 or more. For a freehold transfer of commercial land, you will pay SDLT at the following rates:

Property or lease premium or transfer valueSDLT rate
Up to £150,000Zero
The next £100,000 (the portion from £150,001 to £250,000)2%
The remaining amount (the portion above £250,000)5%

When you buy a new non-residential or mixed use leasehold property you pay SDLT on both the purchase price of the lease and purchase price of the lease and the value of the annual rent you pay (the ‘net present value’). These are calculated separately then added together. The above referred to surcharges also apply.

Your tax professional or lawyer will be able to calculate your SDLT liability according to the rates that apply at the time of your purchase or lease.

Other useful links:

For more information or guidance on how to buy property, structure your business to save tax, tax considerations in the UK, incorporating outside the UK, business immigration or any other aspect of relocating or investing in the UK please contact us at advice.uk@dixcart.com.

Interview: Managing Director of Dixcart Cyprus on Life in Cyprus

Posted on | by Hristina Georgieva

Robert first moved to Cyprus in 2013, after living in Madeira for 12 years. Originally from South Africa, we ask him what prompted the move.

Why did you decide to move to Cyprus?

Before moving to Cyprus, I lived in Madeira. The opportunity to work for Dixcart came up, so I spent 12 years there as head of business development. I was then asked if I would like to head the Dixcart office in Cyprus and I have lived here now for 9 years.

What are the best aspects of living in Cyprus?

Accessibility (it is really easy to travel internationally). Low crime rates. Good schools. Great quality of life. And it sounds very obvious but the weather! Anybody moving to Cyprus for the first time is in for a real treat, as the temperature can reach highs of 33ᵒC in the summer months and it stays warm and mild during the winter – it also means you can enjoy the sea all year round as the water can be as warm as 27ᵒC. Having 320 days of sunshine per year has definitely ranked Cyprus amongst the regions with the healthiest climates.

Was it easy to find a property?

Yes – there are excellent housing options available across the island.

Non-EU nationals who are coming to Cyprus under the Permanent Residence Programme have several investment options. One of the options is to invest in a permanent privately-owned residence in Cyprus, the purchase price of which must be a minimum of €300,000 +VAT.

The appeal for many individuals and families moving to Cyprus is the array of tax incentives available to Cypriot non-domiciles and the fact that real estate prices continue to remain consistent.

Do you have any hobbies?

When I am not in the office, I love heading to the beach and swimming. I also enjoy the long relaxed evenings and range of restaurants in the old town; getting lost in the old town is still one of my favourite pastimes as the architecture and history is beautiful.

What advice would you give someone who is considering a move to Cyprus?

First and foremost, I would recommend visiting Cyprus and establishing where you would like to be based. Cyprus boasts one of the most appealing climates in Europe, so many people like to find real estate close to the beaches, however Nicosia (the capital city), Limassol, Larnaca and Paphos are also popular with high-net-worth individuals.

Another important piece of advice I would give, is to research and understand the Cyprus residence programmes. EU citizens can easily move to Cyprus, without restriction, but for non-EU citizens other criteria apply and I would recommend seeking professional advice early on.

Is there anything else you would like to add?

Cyprus is a beautiful Mediterranean island with an open market economy which continues to grow, predominantly lead by the service sector and real estate. Almost everyone speaks English, however, it is worth learning a few Greek words and phrases, and regardless of where you decide to settle, it is very easy to move around by car. Taxation in Cyprus is also quite low compared to most countries and there is a €19,500 set threshold before you have to start paying personal income tax which is another incentive.

As the Managing Director of the Dixcart Cyprus office, I can provide a detailed understanding of the Cyprus residence programmes to anyone who is interested in moving to Cyprus., and a summary of the obligations that need to be met. I am also available to meet should someone wish to visit Cyprus to get a better understanding of the island, a local perspective, or information on property and appropriate schools.

Please feel free to get in touch: robert.homem@dixcart.com

Financial Support for Existing Maltese Companies via a Soft Loan

Posted on | by Hristina Georgieva

Malta Enterprise currently offers a variety of diverse funding options, aimed at developing and enhancing small to medium sized businesses on the island. In this article we focus on the Soft Loan. It is designed to support existing businesses to; accelerate plans to establish new products, enter a new geographic market, address environmental concerns, and/or digitise processes.

Companies that meet the requirements can benefit from a Soft Loan covering part of the funding requirements, up to €1,000,000.

How Does it Work?

An eligible undertaking may be supported through a soft loan to:

a) facilitate a development or expansion project based on a business plan to develop a new product or enter a new geographic market

b) address environmental issues such as; water usage, water treatment, waste treatment, reduction, and reuse

c) optimise business processes through digitalisation and advanced technologies

d) projects aimed to achieve a high level of sustainability

Supported projects must have an implementation period which is not longer than eighteen months and the loan may cover up to 75% of the costs related to the proposed project, including the; procurement of assets, wage costs, know-how and other non-recurring costs.

Details About the Loan

It is important to note that the loan is by way of collateral, secured by a special ‘hypothec’ covering at least fifty percent (50%) of the loan amount. The loan amount cannot exceed:

a) €1,000,000maximum fundingthat must be repaid over a five year term. For organisations involved in road freight transport, the maximum funding is €500,000.

b) Alternatively, if the loan is to be re-paid over ten years, the maximum funding is €500,000, or €250,000 for organisations involved in road freight transport.

Interest Rate

Malta Enterprise charges a very competitive rate of interest that is not lower than 0.5%, established after considering the project and the prevailing European Central Bank reference rate.

The amount not covered by the loan issued by Malta Enterprise, must be financed through a loan issued through a commercial bank and/or through the reserves of the organisation, or other funds considered to be the organisation’s own funds, which must be specifically allocated to the project and deposited with a Commercial Bank.

The loan is repayable within a period of five years, or ten years as outlined above, and Malta Enterprise may agree a moratorium of a maximum twenty-four months for the loan to the relevant organisation, as long as the repayment remains scheduled to be completed within the five or ten year period, as applicable.

Additional Assistance in Malta

This support measure can be combined with the other assistance, such as: The Research and Development Grant: https://www.dixcart.com/setting-up-a-company-in-the-eu-malta-funding-solutions/

How Can We Help You?

Dixcart Malta have a wealth of experience across financial services, offering legal and regulatory compliance insight and helping to implement transformational technology and organisational change. 

Our team of professionals can assist you with the application process and make recommendations with regards to the funding being proposed, as well as preparing the relevant paperwork to ensure a smooth and seamless process, to obtain the relevant finance required.

We will guide you each step of the way and detail the specific criteria required, depending on the activity of the company.

Additional Information

For further information about Malta and the assistance available to companies, please contact Jonathan Vassallo, at the Dixcart office in Malta: advice.malta@dixcart.com. Alternatively, please speak to your usual Dixcart contact.

Cyprus – Routes to Residency

Posted on | by Hristina Georgieva

Individuals wishing to move to Cyprus can apply for a Permanent Residence Permit which is useful as a means to ease travel to EU countries and organise business activities in Europe.

The process is simple: applicants must make an investment of at least €300,000 in one of the investment categories required under the programme, and prove they have an annual income of at least €50,000 (which can be from pensions, overseas employment, interest on fixed deposits, or rental income from abroad).

If the holder of a Permanent Residence Permit resides in Cyprus, this may make them eligible for Cyprus citizenship by naturalisation.

Alternatively, in order to encourage new businesses to the island, Cyprus offers temporary visa routes as a means for individuals to live and work in Cyprus:

  • Establishing a Cyprus Foreign Investment Company (FIC): work permits can be obtained for relevant employees, and residence permits for them and family members. After residing for seven years in Cyprus, within any ten-calendar year period, third country nationals can apply for Cyprus citizenship.
  • Business Facilitation Unit: visas for highly skilled third country nationals – the Ministry of Finance announced in 2022, that they are introducing the Business Facilitation Unit to assist highly skilled third country employees with a minimum gross salary of €2,500 per month, to gain work permits in Cyprus. These permits will last up to three years.
  • Establishment of a small and medium sized Innovative Enterprise (Start-up visa): the core goal of the Cyprus start-up visa scheme is to allow talented, non-EU entrepreneurs from countries located outside the EU and outside the EEA to reap the benefits of residing and working in Cyprus, whilst the island benefits from the development of these innovative new businesses. There are two main schemes: (1) the Individual Start-up Visa Scheme; and (2) the Team Start-up Visa Scheme.

This visa is available for one year, with the option to renew for another year.

It is common for high-net-worth individuals to relocate to Cyprus for employment purposes. If the Permanent Residence Permit or the temporary permits are not the right route for you and/or your family, Cyprus offers another alternate way to live and work in Cyprus:

  • Digital Nomad visa: non-EU nationals who are self-employed, salaried, or on a freelance basis can apply for the right to live and work in Cyprus remotely, for up to one year. The visa can be renewed for another two years.

If you are considering relocating to Cyprus, please get in touch with Katrien de Poorter who would be delighted to speak with you: advice.cyprus@dixcart.com.

Live, Work and Explore Switzerland

Posted on | by Hristina Georgieva

Switzerland is a very attractive location to live and work for many non-Swiss nationals. It offers amazing scenery as well as a number of world-famous cities such as Berne, Geneva, Lausanne, and Zurich. It also offers an attractive tax regime for individuals as well as for companies, in the right circumstances.

It is an enchanting country, blessed with spectacular hiking and skiing trails, beautiful rivers and lakes, picturesque villages, Swiss festivals throughout the year, and, of course, the spectacular Swiss Alps. It appears on almost every bucket list of places to visit but has succeeded in not feeling over-commercialised – even with the tourists flocking to the country to try the world-famous Swiss chocolates.

Switzerland features almost at the top of the list of most attractive countries for high-net-worth individuals to live. It is one of the world’s wealthiest countries and is also known for its impartiality and neutrality. It offers an exceptionally high standard of living, first-rate health service, outstanding education system, and boasts a plethora of employment opportunities.

Switzerland is also ideally situated for ease of travel; one of the many reasons high-net-worth individuals choose to relocate here. Perfectly situated in the middle of Europe means moving around could not be easier, especially for individuals who regularly travel, internationally.

In Switzerland, four different languages are spoken, and English is well spoken everywhere.

Living in Switzerland

Although Switzerland has a variety of beautiful towns and alpine villages to live in, expats and high-net-worth individuals are mainly drawn to a few specific cities. At a glance, these are Zürich, Geneva, Bern and Lugano.

Geneva and Zürich are the biggest cities due to their popularity as centres for international business and finance. Lugano is located in Ticino, the third most popular canton, as it is close to Italy and has a Mediterranean culture many expats enjoy.

Geneva

Geneva is known as the ‘international city’ in Switzerland. This is due to the high number of expats, the UN, banks, commodity companies, private wealth companies, as well as other international companies. Many businesses have set up head offices in Geneva. However, the main attraction for individuals, continues to be the fact that it is in the French part of the country, has a well-looked-after old town full of history and culture and boasts Lake Geneva, with a magnificent water fountain which reaches 140 meters into the air.

Geneva also has fantastic connections to the rest of the world, with a large international airport and connections to the Swiss and French rail and motorway systems.

In the winter months, residents in Geneva also have very easy access to the Alp’s best ski resorts.

Zürich

Zürich is not the capital of Switzerland, but it is the largest city, with 1.3 million people within the canton; an estimated 30% of the residents in Zürich are foreign nationals. Zürich is known as the Swiss financial capital and is home to many international businesses, especially banks. Even though it gives the image of high-rise buildings and a city lifestyle, Zürich has a beautiful and historical old town, and an abundance of museums, art galleries and restaurants.  Of course, you are also never too far from the lakes, hiking trails and ski slopes if you love being outdoors.

Lugano and the Canton of Ticino

The canton of Ticino is the southernmost canton of Switzerland and borders the canton of Uri to the north. The Italian-speaking region of Ticino is popular for its flair (due to its proximity to Italy) and fantastic weather.

Residents enjoy a snowy winter but in the summer months, Ticino opens its doors to tourists who flood to its sunny coastal resorts, rivers and lakes, or sun themselves in the town squares and piazzas.

Working in Switzerland

There are three ways to be entitled to work in Switzerland:

  • Being hired by an existing Swiss company.
  • Forming a Swiss company and become a director or an employee of the company.
  • Investing in a Swiss company and become a director or an employee of the company.

When applying for Swiss work and/or residence permits, it is important to note that different regulations apply to EU and EFTA nationals compared to other nationals, so it is worth checking.

The most popular route is definitely individuals forming a company in Switzerland. This is because EU/EFTA and non-EU/EFTA nationals can form a company, be employed by it, reside in Switzerland, and benefit from the attractive tax regime.

Any foreign national can form a company and therefore potentially create jobs for Swiss nationals. The owner of the company is eligible for a residence permit in Switzerland, as long as he/she is employed by the company in a senior capacity.

For more information on forming a Swiss company, please read our following article: Moving to Switzerland and Want to Work? The Benefits of Forming a Swiss Company – Dixcart

Taxation is also a topic that needs to be considered.

  • Taxation of Individuals

Each canton sets its own tax rates and generally imposes the following taxes: income, net wealth, real estate, inheritance, and gift tax. The specific tax rate varies by canton and is between 21% and 46%.

In Switzerland, the transfer of assets, on death, to a spouse, children and/or grandchildren is exempt from gift and inheritance tax, in most cantons.

Capital gains are generally tax free, except in the case of real estate. The sale of company shares is one of the assets, that is exempt from capital gains tax.

Lump Sum Taxation – if not working in Switzerland

A non-Swiss national, who does not work in Switzerland, can apply for Swiss residency under the system of ‘Lump Sum Taxation’.

  • The taxpayer’s lifestyle expenses are used as a tax base instead of his/her global income and wealth. There is no reporting of global earnings and assets.

Once the tax base has been determined and agreed with the tax authorities, it will be subject to the standard tax rate relevant in that canton.

Work activities outside Switzerland are permitted. Activities relating to the administration of private assets in Switzerland can also be undertaken.

Third country nationals (non-EU/EFTA) may be required to pay a higher lump-sum tax on the basis of “predominant cantonal interest”. This will depend on several factors and varies case by case.

Additional Information

I hope this article has inspired you to visit Switzerland and to consider this incredible country as a place of residence. No matter which canton draws your attention, or which city you decide to settle in, the rest of the country, and Europe, is easily accessible. It may be a small country, but it offers; a diverse range of places to live, a dynamic mix of nationalities, is headquarters to many international businesses, and caters to a large range of sports and leisure interests.

The Dixcart office in Switzerland can provide a detailed understanding of the Swiss Lump Sum System of Taxation, the obligations that need to be met by applicants and the fees involved. We can also give a local perspective on the country, its people, the lifestyle, and any tax issues.

If you would like to visit Switzerland, or wish to discuss moving to Switzerland, please do get in touch: advice.switzerland@dixcart.com.

Dixcart attending Athens Alliotts Worldwide Conference 2023

Posted on | by Hristina Georgieva

October 2023

Athens, Greece

In-person events

Dixcart Directors from four offices – Nevis, Malta, Guernsey and Isle of Man, will be attending the Athens Alliots Worldwide Conference in October 2023.

If you are attending and would like to meet during the event, please get in touch: advice@dixcart.com

Alternatively, you can find a point of contact for each of the offices here.

Guernsey

Dixcart Security Trustee Services and Corporate Lending Arrangements

Posted on | by Hristina Georgieva

Introduction

As a reminder, a Security Trustee is a person or entity who holds security on behalf of lenders. They are appointed to safeguard and manage the assets that are put up as collateral for a loan. Security Trustees play an important role in providing comfort to lenders and ensuring that they are protected in case of a borrower default.

Dixcart Trust Corporation Limited operate a number of corporate security trustee arrangements, primarily for property development and acquisition lending, particularly loan note and alternative debt arrangements.

Role of Security Trustees

The primary role of a Security Trustee is to act as an independent third-party that holds security on behalf of lenders. This means that the Security Trustee is responsible for managing the security, ensuring that it is properly maintained and protected, and that any proceeds from the security are distributed to the lenders in accordance with the terms of the security agreement.

Security Trustees are typically appointed in situations where there are multiple lenders involved in a transaction or where the security being provided is complex or difficult to manage. In these situations, a Security Trustee can provide a single point of contact for all lenders and can help to simplify the process of managing the security.

Responsibilities of Security Trustees

The responsibilities of a Security Trustee can vary depending on the specific terms of the security agreement. However, some common responsibilities include:

1. Holding and managing the security: The Security Trustee is responsible for holding and managing the security on behalf of the lenders. This includes maintaining the security, ensuring that it is properly insured, and taking any necessary steps to protect the security.

2. Distribution of proceeds: In the event that the security is realized, the Security Trustee is responsible for distributing the proceeds to the lenders in accordance with the terms of the security agreement.

3. Monitoring the borrower: The Security Trustee may be responsible for monitoring the borrower and ensuring that they are complying with the terms of the security agreement. This can include monitoring financial performance, compliance with covenants, and ensuring that the borrower is properly maintaining the security.

4. Taking enforcement action: Should the borrower default on the loan, the Security Trustee may be responsible for taking enforcement action to realize the security on behalf of the lenders. This can include taking legal action, selling the security, or taking any other necessary steps to protect the interests of the lenders.

Conclusion

In conclusion, Security Trustees play a vital role in providing security to lenders and ensuring that their interests are protected. They are responsible for holding and managing security on behalf of lenders and distributing any proceeds in accordance with the terms of the security agreement.

Additional Information

For additional information regarding security trustee services, please contact the Dixcart office in Guernsey: advice.guernsey@dixcart.com. 

Dixcart Trust Corporation Limited, Guernsey: Full Fiduciary Licence granted by the Guernsey Financial Services Commission.

Tax Advantages for Expats in Cyprus and Administrative Support Available from Dixcart

Posted on | by Rebecca Beard

Have you just landed in Cyprus or are you planning to relocate to Cyprus and benefit from the numerous tax benefits Cyprus has to offer?

Tax Advantages Available to Expats in Cyprus

  • Under the Cyprus non-domicile programme new tax residents of Cyprus enjoy an exemption from taxation on; dividends, interests, capital gains*, AND capital sums received from pensions, provident and insurance funds, for a period of 17 years.
  • Cyprus has no wealth or inheritance tax.
  • 50% of the remuneration of employees with a first job working in Cyprus, is exempt from income tax for a period of 17 years. Annual remuneration must exceed €55,000 and employees must not have been residents of Cyprus for a period of, at least, 10 consecutive years, prior to the start of their employment in Cyprus.

How Can Dixcart Help?

Expats working in Cyprus need to apply for various documents. Dixcart can assist with this process and help ensure that it is as simple and timely as possible.

  1. Within four months of arrival in Cyprus EU – citizens need to obtain a Cyprus Residence Certificate.

For non-EU citizens other requirements apply, depending on the type of residence application. Dixcart can provide advice to non-EU nationals regarding the documentation that they need to provide.

  1. New residents need to apply for a personal Tax Identification Number.
  2. Each year a personal income tax declaration needs to be filed.

Finally, do not forget your driving licence, it may make sense to convert this to a Cypriot one.

Dixcart Contact Details

Dixcart Cyprus is happy to assist with all relevant administrative matters from your arrival in Cyprus and during your stay in Cyprus. Please speak to Robert or Katrien: advice.cyprus@dixcart.com

We also provide advice regarding the tax benefits available and how you can take steps to ensure that you are receiving these.

*Exception being capital gains from the sale of immovable property in Cyprus

Tax Efficiencies Available in Cyprus: Individuals and Corporates

Posted on | by Rebecca Beard

Background

Cyprus is a hidden European gem in terms of the opportunities and benefits available to individuals and corporates, moving there on a permanent basis and/or establishing residency through the ’60 Day Tax Residency Rules’.

EU and Non-EU Individuals

For non-EU nationals there are various programmes for individuals to enable them to move to Cyprus, with one option being to establish a company in Cyprus. EU nationals are free to move to Cyprus, as Cyprus is in the EU.

The ‘60 Day Tax Residency Rule’ is  a route for EU and non-EU nationals, to optimise the tax efficiencies available from Cyprus, without needing to reside there more than 60 days a year.

We will start by looking at the tax benefits available to individuals and to corporates.

Tax Benefits Available to Individuals

What are the Advantages of Becoming Cyprus Tax Resident?

Cyprus non-domicile status can be an effective means to optimise personal wealth planning. The advantages of becoming Cyprus tax resident, an option for individuals not previously tax resident in Cyprus, include the following:

  1. Non-Domicile Status

The non-domicile tax regime is particularly interesting for individuals whose main source of income is either dividend or interest income, as these sources of income are not taxed in Cyprus.

Individuals can also take advantage of the exemption from taxation of capital gains, other than on the sale of immoveable property in Cyprus.

In addition, there is an exemption from taxation on capital sums received from pensions, provident and insurance funds as well as several other tax advantages, including; a low rate of tax on foreign pension income, and no wealth or inheritance taxes in Cyprus.

The zero tax benefits, mentioned above, are enjoyed even if the income has a Cyprus source and/or is remitted to Cyprus.

  1. Employment Income Tax Exemption

There is a 50% exemption from taxation, for income for ‘first time’ employment in Cyprus, for individuals with an annual remuneration income of over €55,000.

This exemption is available for a period of  up to 17 years.

  1. Tax Exemption on Income from Employment Outside Cyprus

Individuals who are employed outside of Cyprus, for more than 90 days in aggregate in a tax year, by a non-Cyprus tax resident employer or foreign permanent establishment of a Cyprus tax resident employer, are exempt from income tax on this income.

Tax Benefits Available to Companies

  1. Corporate Tax Rate

Cypriot companies enjoy a 12.5% rate of tax on trading, and a zero rate of capital gains tax. In addition, Cyprus tax resident companies and Cyprus permanent establishments (PEs) of non-Cyprus tax resident companies, are entitled to a Notional Interest Deduction (NID), on the injection of new equity used to generate taxable income.

  1. NID

NID is deducted from taxable income. It cannot exceed 80% of the taxable income, as calculated prior to the NID, arising from the new equity. A company could achieve an effective tax rate as low as 2.50% (corporate tax rate 12.50% x 20%). Please contact the Dixcart office in Cyprus for further information: advice.cyprus@dixcart.com

  1. Increased Tax Deduction for Research and Development Expenses

Eligible research and development expenses can be deducted from taxable income equivalent to 120% of the actual spend.

Starting a Business in Cyprus as a Means of Relocation for Non-EU Nationals

Cyprus is an attractive jurisdiction for trading and holding companies and offers a number of tax incentives, as detailed above.

To encourage new business to the island, Cyprus offers two temporary visa routes as a means for individuals to live and work in Cyprus:

  1. Establishing a Cyprus Foreign Investment Company (FIC)

Individuals can establish an international company which can employ non-EU nationals in Cyprus. Such a company can obtain work permits for relevant employees, and residence permits for them and their family members. A key advantage is that after seven years, third country nationals can apply for Cyprus Citizenship.

  1. Establishment of a Small/Medium Size Innovative Enterprise (Start-up Visa) 

This scheme allows entrepreneurs, individuals and/or teams of people, from countries outside the EU and outside the EEA, to enter, reside and work in Cyprus. They must

establish, operate, and develop a start-up business, in Cyprus. This visa is available for one year, with the option to renew for another year.

Please see the Dixcart Article: Programmes to Move to or Become Tax Resident in Cyprus.

Additional Information

For further information about the attractive tax regimes available to individuals and companies in Cyprus, please contact Robert Homem or Katrien de Poorter at the Dixcart office in Cyprus: advice.cyprus@dixcart.com