Category: Corporate Services

How to Establish Your Business in Portugal

Posted on | by Megan Raguro

Portugal has emerged as an ideal destination for entrepreneurs and businesses seeking a stable, business-friendly environment within the European Union. With its strategic location, attractive tax regime, and vibrant economy, Portugal offers numerous opportunities for growth. If you are starting from scratch or considering re-domiciliation, this guide will walk you through the essential steps to establish your business in Portugal.  

1. Incorporation: Starting Fresh or Redomiciling

You have two primary options for establishing your business in Portugal:

  • Incorporation: This involves creating a new Portuguese company, adhering to all local legal and regulatory requirements. It is the most common approach for businesses entering the Portuguese market.  
  • Re-domiciliation: This process involves transferring an existing company’s legal domicile from another jurisdiction (e.g. France) to Portugal. This can help companies benefit from Portugal’s tax advantages and EU membership. However, it requires careful legal and tax planning to ensure compliance with both the original and new jurisdiction.

2. The Company Incorporation Process

The process of incorporating a company in Portugal generally involves these steps:

  • Choosing a Company Structure: The most common types are:
    • Sociedade por Quotas (Lda.): A limited liability company, suitable for small to medium-sized enterprises.
    • Sociedade Anónima (SA): A public limited company, typically used for larger businesses.
  • Obtaining a Company Name Approval: You must register your chosen company name with the National Registry of Legal Persons (RNPC – Registo Nacional de Pessoas Colectivas). Other than confirming uniqueness, it ensures the company’s name complies with Portuguese legal requirements.
  • Drafting the Company Statutes: These documents outline the company’s structure, objectives, and operational procedures – essential for establishing a clear and legally sound foundation for the company’s operations, governance, and roles and responsibilities of shareholder and directors. This serves as the company’s internal governance guide and is required for the registration of the company at the commercial registry.
  • Obtaining a Tax Identification Number: The Portuguese tax system necessitates two types of tax identification numbers – namely:
    • NIPC (Número de Identificação de Pessoa Colectiva), the corporate tax number, is automatically assigned upon approval of the company’s name. This enables the company to fulfil tax obligations, engage in legal and financial transactions (such as opening bank accounts), and operate legally within Portugal.
    • NIF (Número de Identificação Fiscal), individual’s tax number, for individuals associated with the company, including directors and shareholders. This NIF is for their individual tax liabilities and any financial dealings related to the company.
  • Opening a Bank Account: Essential for depositing the company’s share capital and managing financial transactions. Although it is not a prerequisite to have a Portuguese bank account, a bank account in Portugal is beneficial to transact with the Portuguese tax authorities (e.g. receive refunds from the tax authorities, for payment of employment social security amounts, etc.).
  • Registering the Company at the Commercial Registry: This formalises the company’s existence and grants the company its legal personality. A registration fee is payable.
  • Registering the Company with Social Security: Portuguese companies are required to register for social security (whether they have employees or not) – for which it will receive a unique social security registration number. This ensures, among others, compliance with labour laws.
  • Obtaining Necessary Licenses and Permits: Companies may be required to obtain specific licenses or permits to operate in Portugal or the EU, depending on the scope of business activities and sector-specific requirements.

3. Shareholder Registry of Beneficial Owners and Public Access

Company ownership information in Portugal is generally public. The Commercial Registry discloses shareholder details, for limited liability companies. However, the Central Register of Beneficial Owners (RCBE) is needed to identify UBOs (Ultimate Beneficial Owners) with significant ownership (over 25% ownership or control), although searches are by company name only. Listed companies also report ownership changes through the CMVM (Comissão do Mercado de Valores Mobiliários) – the Portuguese Securities Market Commission. Despite these registries, identifying the true UBO can be difficult with complex structures.

4. Tax Rates and Considerations

  • Corporate Tax (IRC): Portugal’s tax regime is a significant draw for businesses with a range of corporate rates applicable starting from 5% and depend on where the activity and company is based. See here for more details on specific rates applicable.
  • Value Added Tax (IVA): Standard rates are 23% in mainland Portugal, with reduced rates for certain goods and services. Reduced rates apply in Madeira and the Azores.
  • Personal Tax – Non-Habitual Resident (NHR) Regime: Offers significant tax benefits for individuals (such as employees, directors, and shareholders tax resident in Portugal who qualify), including potential tax exemptions on foreign-sourced income. See here for more information.

5. Obligations to Shareholders and Directors

  • Shareholders: Are entitled to dividends and have voting rights. They are also liable for the company’s debts up to their share capital.  
  • Directors: Are responsible for managing the company’s affairs, complying with legal obligations, and acting in the best interests of the company. They have fiduciary duties and can be held liable for breaches of these duties. Directors are required to act with reasonable skill and diligence.

6. Opening a Bank Account

Without a bank account, a corporate entity may have no use. Portuguese banks and authorities have strict KYC (‘Know-Your-Client’) requirements to prevent money laundering and terrorist financing. Expect to provide detailed information about your company’s ownership structure, business activities, and shareholder’s source of funds.

The following may be required as a starting point:

  • Company incorporation documents as detailed above
  • NIPC (company’s registration and tax number) of the company
  • Identification documents for directors and shareholders
  • Proof of address (the company’s individual shareholders)
  • Source of funds and wealth of shareholders and/or UBO

Although bank accounts may be opened remotely, it may be faster and more convenient to open in person.

7. Ensuring Company Substance

Demonstrating economic substance is critical for tax compliance in Portugal. Companies must maintain genuine economic activities and a physical presence within the country. Furthermore, to qualify for the 5% corporate income tax rate in Madeira’s International Business Centre, companies must meet specific substance requirements.

8. Reasons to Incorporate in Portugal

Lastly, various businesses have recently incorporated or redomiciled to Portugal. The reasons are vast and different, many of which have decided based on the following factors:

  • EU Membership: Access to the European single market to conduct business.
  • Stable Political and Economic Environment: Provides a secure base for business operations.
  • Strategic Location: A gateway to Europe, Africa, and South America.
  • Network of Double Taxation Agreements: Portugal has almost 80 double taxation agreements – some of which are unique like the agreement between Portugal and Angola. Click here for more information on double taxation agreements.
  • Skilled Workforce: A growing pool of talent that can speak several languages, including English.
  • Quality of Life: A desirable location for professionals and families.  
  • Growing Tech Hub: Lisbon and other cities are attracting tech companies and startups. Read here for more information.

Visa routes: Various visa options are available, including the golden visa. Refer here for more details.

Conclusion

Establishing a business in Portugal requires careful planning and adherence to local requirements. However, the potential rewards are significant. By understanding the incorporation process, tax implications, and regulatory obligations, you can successfully launch and grow your business in this dynamic and promising market. It is highly recommended to seek professional advice to navigate the complexities of Portugal which may be different to the jurisdiction you are accustomed to.

Please contact advice.portugal@dixcart.com for a free initial consultation.

Swiss company

Advantages of Holding Swiss Banking Assets Through a Swiss Company for Turkish Residents

Posted on | by Charlotte McGonigle

If you are a Turkish resident looking to hold investments in a safe and tax-efficient manner, using a Swiss company to manage a Swiss bank portfolio offers clear advantages.

Key Advantages

  1. Lower Taxes: Swiss corporate tax rates (12–14%) are significantly lower than Turkey’s 40% personal income tax. This structure can result in tax savings of up to 28%.
  2. No Tax on Currency Fluctuations: The Swiss company protects Turkish tax residents from taxation on foreign exchange fluctuations. Currency fluctuations are tax-exempt in Switzerland, unlike in Turkey, where they are taxed at rates up to 40%. This provides a high tax stability for companies dealing with multiple currencies.
  3. Double Tax Treaty: Switzerland and Turkey have had a double taxation treaty since 1 January 2013. This helps avoid being taxed twice on the same income.

1. Turkish CFC Rules and Swiss Corporate Tax

Under Turkey’s Controlled Foreign Corporation (CFC) rules, income from a foreign company may be taxed in Turkey, unless that company pays more than 10% corporate tax. Swiss companies offer an attractive tax opportunity, with corporate tax rates from 12% to 14%, depending on the Swiss canton. This means Turkish residents can legally avoid Turkish taxation on the Swiss company profit.

2. Withholding Tax vs Shareholder Loan

Should the Swiss company decide to distribute dividends to a Turkish shareholder, the effective withholding tax rate is 15% for individual shareholders and 5% for corporate shareholders.

A tax credit is available in Turkey against Turkish income tax.

The shareholder loan is an effective solution, offering flexibility for withdrawing funds from the Swiss company at any time without taxation.

Additional Information

For further details regarding the use of a Swiss company to hold portfolio investments owned by Turkish residents, please contact Christine Breitler or Thierry Groppi at the Dixcart Switzerland Office:  advice.switzerland@dixcart.com

Cyprus as a Gateway for Indian Cross Border Transactions

Posted on | by Megan Raguro

Introduction

Cyprus and India have long maintained close and friendly bilateral relations, progressively strengthening their economic, scientific, and technical cooperation.

On 18 November 2016, Cyprus and India signed a revised agreement for the avoidance of double taxation and prevention of fiscal evasion concerning taxes on income (Double Taxation Treaty “DTT”), replacing the previous DTT established in 1994.

With minor adjustments, the DTT agreement aligns closely with the OECD Model Convention for the Avoidance of Double Taxation on Income and on Capital.

Advantages of the Cyprus Corporate Tax Regime

Provided a company meets the economic substance requirements and is considered a tax resident in Cyprus then they will enjoy the favourable corporate tax regime on offer. Some of the many benefits a Cyprus company can enjoy include:

  • Corporate tax rate of 12.5%, one of the lowest in Europe. Thiscan be lowered to 2.5% through the use of the Notional Interest Deduction (NID). Please see our detailed article on the NID here.
  • Inbound dividends are not taxable (subject to conditions), and there are also no capital gains tax on the sale of securities and disposal of shares.
  • The revised treaty assigns taxing rights to the source country for capital gains from the alienation of shares. Gains from shares acquired before 1 April 2017 are taxable only in the seller’s country of residence, while gains from shares acquired on or after 1 April 2017 may be taxed by the source country.
  • There is no withholding tax on dividends, interest, and royalties paid from Cyprus, provided the royalty rights were exercised outside Cyprus.
  • The following are the maximum withholding tax (WHT) rates on inbound payments from Cyprus to India under the treaty (subject to possible lower rates or exemptions under domestic law provisions):
    • Dividends: 10%
    • Interest: 0%*/10%
      • NIL, if the beneficial owner of the interest is the Government, a political subdivision, a local authority of the other Contracting State, or specified financial institutions such as the Reserve Bank of India.
    • Royalties: 10%
      • A WHT rate of 10% also applies for payments of a technical, managerial, or consulting nature.
  • Cyprus has a vast network of Double Tax Treaties (DTTs) aimed at preventing double taxation.

Cyprus Holding Company

As a result of the above, Cyprus companies can be effective holding entities for Indian companies involved in international cross-border transactions. A Cyprus company can own 100% of an Indian company engaging in various investments. From a Cyprus perspective, no participation or holding requirements are necessary to obtain tax benefits. Incoming dividends from India are exempt from Cyprus corporation tax and will also be exempt from Special Defence Contribution (SDC) at a rate of 17%, provided that:

  • The Indian company paying the dividend engages directly or indirectly in more than 50% of activities generating non-investment income, or
  • The Indian tax burden on the income of the paying company is not significantly lower than the Cyprus tax burden (defined as less than 50% of Cyprus’s corporate tax rate, i.e., lower than 6.25%).

Additionally, a Cyprus entity can be used as an intermediary for channelling foreign direct investments (FDIs) into India or other countries or can be used to accumulate group profits which can be reinvested without triggering additional tax liabilities.

How Can Dixcart help?

For over 50 years, Dixcart has been a trusted partner, assisting clients with international structuring, company incorporation, and management. Our extensive local expertise and dedicated team have established us as leaders in the field.

We are committed to guiding you through every stage of the process, from setting up and registering a Cyprus company to providing management, accounting services, and fully serviced office space. Dixcart Cyprus is your comprehensive solution for incorporating a Cyprus entity and maximising the advantages it offers.

Our team will support you in gathering and organising all necessary documents while ensuring full compliance with local and international regulations. We will liaise directly with governing bodies on your behalf to streamline the process and safeguard regulatory adherence.

If you would like to explore the benefits of establishing a Cyprus company or have any questions about our services, please contact Dixcart Cyprus for further information at: advice.cyprus@dixcart.com.

Effective First Steps Towards Establishing a Company in Switzerland

Posted on | by Charlotte McGonigle

The jurisdiction of Switzerland offers numerous advantages.

Based in the heart of Europe, it has a long tradition as an internationally respected finance and banking hub. It is renowned as a centre for private wealth.

The Challenge

Switzerland is considered a top level jurisdiction, in terms of international standards.

This has an impact on the establishment and management of companies, as much as it affects other areas of life in Switzerland.

  • We are often asked by clients, if there might be an alternative, a first step towards setting up a company in Switzerland.

The answer is yes.

The Solutions

Non-Swiss companies often need Swiss based employees, particularly when they are expanding into the Swiss market for the first time. Quite often this is to carry out a business development role, but there are many other situations when a Swiss employee or employees are needed.

Frequently, a local representative is needed in Switzerland, but it might be a little early to establish a Swiss company.

Two Options

There are two options:

  • The non-Swiss company directly hires the employees and Dixcart Switzerland represents the company;

OR

  • Dixcart Switzerland opens a branch, in Switzerland, for the non-Swiss company and runs the branch. This offers the advantage of providing more substance in Switzerland.

What Advice and Support can Dixcart in Switzerland Provide?

We can provide advice as to the best solution to meet the particular circumstances and can help generate an effective business plan. In addition we can provide day to day administrative services to ensure the smooth running of this first step into the Swiss market.

Dixcart Switzerland services include:

  • Bookkeeping
  • Business plans
  • Payroll
  • Preparation of annual accounts
  • Preparation of annual returns
  • Swiss insurance expertise
  • Swiss social security expertise
  • Value added tax reporting and payment (VAT)

Payroll Services

Specific services in relation to the payroll function include:

  • Salary calculations
  • Social security calculations and payments
  • Payroll tax calculations and payments

Serviced Offices

Serviced offices are available in the same premises as Dixcart Switzerland. Desks with internet connection, are used by serviced office clients, with telephone lines and secretarial support available, if required.

What Additional Support is Available – When a Company is Established in Switzerland?

If the business in Switzerland expands and it becomes viable and beneficial to establish a Swiss company, Dixcart Switzerland can assist with:

  • Accounting

Working with clients at every stage of their business life cycle, we are able to set up the complete internal finance function, if required. 

  • Management Accounts

Dixcart frequently provide management accounts for a large variety of different companies. These can be generated monthly, quarterly or annually, to help make running the company as efficient as possible.

  • Provision of Directors

A number of the companies that Dixcart manage have a Dixcart professional on their Board of Directors. The technical professional expertise, impartial perspective and extensive experience at director level  that a Dixcart director can provide, is often of substantial benefit.

Additional Information

If you would like additional information regarding the first steps towards setting up a company in Switzerland, please contact Christine Breitler at the Dixcart office in Switzerland: advice.switzerland@dixcart.com.

Redomiciling Your Company to the Isle of Man

Posted on | by Charlotte McGonigle

Global mobility and the portability of Corporate Structures has become increasingly important to Clients and their Advisers, who often move corporate entities from one jurisdiction to another. A prerequisite to Redomiciliation is that both the jurisdiction of incorporation, and the new jurisdiction where the Company will continue, both make provision for this in their Company Law. Like many international financial centres, the Isle of Man’s Companies Acts enable Redomiciliation.

What Effect Does Redomiciliation Have on the Company?

The continuance of a Foreign Company in the Isle of Man does not create a new legal entity or prejudice or affect the continuity of that company, its assets, liabilities, and obligations.

If the Company undertakes a licensable activity, such as Banking, Insurance, E-gaming etc. it will need to contact the corresponding Regulatory Authority or Licensing Body to ensure that there are no issues.

Consideration must also be given to the name of the continuing company, ensuring that it complies with the relevant Companies Acts and any restricted words and phrases where prior permission will need to be sought, as detailed by the guidance provided by the Isle of Man Companies Registry.

Why are Companies Redomiciled?

Redomiciliation is carried out for a wide variety of reasons, which can include:

  • The facilitation of operational efficiencies.
  • To undertake restructuring.
  • Moving to a reputable jurisdiction to provide comfort to investors, lenders, and banking institutions.
  • To benefit from political and economic stability.
  • To change Trust & Corporate Service Provider for better service.

You can read more about the benefits of Isle of Man Companies here.

Why Redomicile Your Company to the Isle of Man?

The Isle of Man is a leading international financial hub that is globally recognised as well regulated and a reputable jurisdiction to do business from.

Those Foreign companies seeking to Redomicile to the Isle of Man have a choice of Companies Acts to register under – the more traditional Companies Act 1931, or the streamlined Companies Act 2006 – which provides a large degree of flexibility.

Once Redomiciled, the company can benefit from the Island’s tax regime, boasting rates such as 0% Corporate Tax, 0% Capital Gains Tax and no Withholding Tax on Dividends.

The Island is politically neutral and business friendly, meaning that the legislative environment is reliable and enduring, particularly as the Isle of Man makes its own laws. In addition, whilst the Case Law of England & Wales is persuasive, it is not binding.

The Isle of Man’s credit strength, diverse economy and ability to comply with global tax standards are all reflected in its Moody’s Credit Rating of Aa3 Stable, per their 01 November 2023 assessment.

How Can Dixcart Assist with Your Redomiciliation?

Dixcart Management (IOM) Limited is Licensed and Regulated in the Isle of Man to deliver Trust & Corporate services and has been in operation since 1989.

Our expert team of qualified professionals has been developed to administer clients’ Isle of Man Companies, Trusts and Foundations to an exceptional standard, delivering a tailored and dedicated service.

You can read more about how our Isle of Man office can support your Corporate Structuring here.

Contact Us

If you are considering Redomiciling your company to the Isle of Man or changing service provider, get in touch with Paul Harvey at Dixcart: advice.iom@dixcart.com

Dixcart Management (IOM) Limited is Licensed by the Isle of Man Financial Service Authority

Exciting Changes to the Cyprus Startup Visa Scheme and New Opportunities for Global Entrepreneurs

Posted on | by Megan Raguro

Introduction

At the end of 2024 a number of revisions to the existing Cyprus Startup Visa Scheme were approved. These changes make an already very attractive scheme more appealing and accessible.

Overview of the Scheme

The Cyprus Startup Visa Scheme allows talented entrepreneurs from non-EU and non-EEA countries, whether individuals or a team, to enter, reside and work in Cyprus while establishing, operating, or growing a high-potential Startup. The aim of the scheme is to create new job opportunities in Cyprus, promote innovation and research, grow the business ecosystem and consequently the overall economic development of the country.

For the purposes of the Scheme, Innovative Startups are defined as unlisted small enterprises registered within the last 5 years, with no profit distribution and have not been formed through a merger. The enterprise should develop or offer new products, services, or processes that create or disrupt markets. Such innovations are based on new technologies, should adapt existing technologies, and/or employ new business models.

Beneficiaries of the Scheme are categorised under either the ‘Individual Startup visa scheme’ or under the ‘Team Startup visa scheme’.  A team is considered as “a maximum of 5 individuals consisting of non-EU country nationals”. The Team should consist solely of the founders of an innovative Startup or of at least one founder and other senior executives. In both the Individual and the Team Startup visa scheme at least 25% of the company’s shares should be owned by one or more member(s) of the applicant or team of applicants.

What has Changed?

The revisions to the Cyprus Startup Visa Scheme include:

  • An extension to the residence permit offered to successful applicants from 2 to 3 years, with a possibility of 2-year renewals, instead of the original renewal for 1 year;
  • A reduction to the required percentage of equity third country applicants must have in the Cypriot company from 50% to 25%. It is noted that a start-up group applying for this specific visa may consist of up to five founders (or one founder and additional executive members), and must have a minimum of €20,000 capital or €10,000 if the founders are less than two;
  • The ability to increase the number of third country nationals employed from 30% to 50% of the company’s entire staff, with the option of hiring additional foreign personnel if the start-up investment in Cyprus is equal to, or exceeds, €150,000;
  • The implementation of different evaluation criteria for start-ups that have sales revenues of at least €1,000,000, and whose research and development expenditure amounts to at least 10% of the total operating expenses for one of the past 3 years.

While the updated programme offers greater flexibility to foreign entrepreneurs and investors, it also establishes more distinct and objective conditions for the renewal of the start-up visa after the initial 3-year period. Specifically, start-ups wishing to renew their relevant visas will be required to demonstrate either a minimum increase of 15% in their revenues or investments of at least €150,000 during the period of their operation in Cyprus. Additionally, the companies applying for a renewal visa will be expected to have either created at least 3 new jobs in Cyprus, or participated in a local innovation support scheme, or launched at least one product or service.

Tax Benefits

With an ever-expanding double tax treaty network of approximately 70 countries across the globe, Cyprus offers a number of tax benefits to start-ups and foreign investors of such start-ups, such as:

  • A non-Cypriot individual relocating to Cyprus to set-up their startup is exempt from tax on dividends, capital gains and most types of interest income, though they will still be subject to income tax on any income earned as a salary from their employment in Cyprus.
  • Investors in innovative start-up companies (which have been certified as such by the Ministry of Finance in Cyprus) can enjoy up to 50% tax exemption on their annual taxable income in Cyprus.
  • Corporate tax on net profits of Cypriot companies is currently set at 12.5%. Technology companies producing Intellectual Property can apply for an 80% tax exemption, reducing the corporate tax rate to an effective 2.5%.
  • Capital gains arising from the disposal of the qualifying IP are fully exempt from tax. Any gains earned by the entrepreneur from the disposal of his/her shares in a Cypriot tax resident company are generally exempt from tax in Cyprus.
  • Cyprus tax resident companies may carry forward tax losses incurred during a tax year over the following 5 tax years to offset future taxable profits, allowing startups, which are commonly loss making in their early stages, to benefit in the future.
  • Upon the introduction of new equity, a Cyprus tax resident company is entitled to claim a notional interest deduction (NID) as a tax-deductible expense. The deduction is available on an annual basis and may reach up to 80% of the taxable profit generated from the new equity. Depending on the level of capitalisation, a startup company may reduce its effective tax rate to as low as 2.5%.
  • Profits from disposals of corporate ‘titles’ are tax exempted from corporate income tax. However, capital gains on immovable property situated in Cyprus (on non-quoted shares directly or indirectly holding such Cyprus-situated immovable property) are taxed.
  • Special defence contribution is imposed only on non-exempt dividend income, ‘passive’ interest income, and rental income earned by Cypriot tax resident companies and Cypriot permanent establishments of non-Cyprus tax resident companies.

How can Dixcart Cyprus Help?

With over 50 years of expertise in the industry, we bring a deep understanding of supporting individuals, families, and businesses. Our teams combine extensive knowledge of the local regulatory framework with the global reach, resources and expertise of our international group, ensuring we deliver tailored solutions that perfectly meet your needs.

At Dixcart, we recognise that every client is unique, and we pride ourselves on offering personalised services. By working closely with you, we gain an in-depth understanding of your specific requirements, enabling us to provide bespoke solutions, recommend the most suitable structures, and support you every step of the way.

Our comprehensive range of services include company incorporation, management and accounting services, company secretarial support, and even providing a fully serviced office for your Cypriot company.

If you are considering how Cyprus can play a role in managing your wealth or business needs, we would be delighted to discuss your options. Please do not hesitate to contact us at advice.cyprus@dixcart.com.

2024 Overview: Key Articles and Insights from Dixcart Switzerland

Posted on | by Megan Raguro

Introduction

As we approach the end of 2024, we reflect on the key articles shared by our Switzerland office this year. Below are concise summaries of Dixcart Switzerland’s 2024 articles, offering practical guidance on Swiss residency, trusts, and business opportunities.

1. Swiss Regulation: 2023 Overview and What to Expect in 2024
Key regulatory updates for 2024 include VAT rate increases, a 15% minimum corporate tax for multinationals, and the removal of import duties to boost economic competitiveness. Reflections on 2023 cover the Swiss-UK financial treaty, updates to the Federal Act on Data Protection, corporate law reforms, and enhanced anti-money laundering measures.

2. Setting Up a Business in Switzerland
Comprehensive guidance on starting a business in Switzerland, including legal structures such as sole proprietorships, partnerships, and limited liability companies. Highlights include essential steps for registration, tax implications, and adherence to employment regulations.

3. Dixcart Gains Regulated Trustee Status in Switzerland – Understanding the Significance
Dixcart Trustees Switzerland (SA) attained regulated trustee status from FINMA, aligning with Swiss structural and business-conduct standards. Key advantages of Swiss trusts include confidentiality, tax efficiency, and enhanced wealth preservation opportunities.

4. The Role of a Swiss Trustee: Exploring How and Why They are Beneficial
Swiss Trustees play a pivotal role in estate planning, wealth management, and asset protection. Switzerland’s central location, leading banking infrastructure, and strong commitment to confidentiality make it an ideal jurisdiction for trustee services.

5. How to Become Swiss Resident by Working in Switzerland
Switzerland provides several routes to residency through work, including employment with a Swiss company, forming a business, or investing in one. EU/EFTA nationals benefit from easier processes, while non-EU/EFTA nationals have stricter requirements. Taxation differs by canton, and contributions through business activities often benefit local economies.

6. Introduction of Swiss Trusts
Swiss Trusts and Private Trust Companies (PTCs) offer secure asset protection, confidentiality, and succession planning options. Trusts under foreign laws are recognised in Switzerland, and taxation depends on the residency of the settlor and beneficiaries. FINMA-regulated Trustees uphold strict confidentiality and compliance standards.

7. Guide to Establishing and Managing a Swiss Company
Switzerland is an attractive location for businesses, offering low tax rates, political stability, and a prime European location. Incorporation typically takes three weeks, with options like SARL or SA structures. Flexible labour laws, VAT compliance, and favourable tax treatment for dividends and capital gains strengthen the benefits of operating in Switzerland.

Additional Information

For additional details on any of these topics or assistance with related services, please contact Christine Breitler at our Switzerland office: advice.switzerland@dixcart.com.

Malta Tech Startups

Malta: A Rising Hub for Tech and Innovation Startups

Posted on | by Megan Raguro

In recent years, Malta has become an increasingly popular destination for startups, particularly in tech, fintech, blockchain, gaming, and iGaming sectors. The island nation offers EU Membership, a business-friendly environment, strategic location, and strong government support, making it an attractive option for entrepreneurs looking to establish and scale their businesses.

A survey carried out by the Europe Startup Nations Alliance (ESNA) across 21 EU countries ranked Malta as the 4th best destination for innovative startups. Events and meetups are increasingly common, fostering connections with investors, mentors, and other entrepreneurs. Malta’s blend of business advantages, strategic positioning, and lifestyle benefits creates a conducive environment for startups to launch and scale successfully.

Why Malta?

As a member of the European Union (EU), Malta provides startups with seamless access to the single European market, which encompasses over 450 million consumers across 27 member states. Also, the EU’s single market policies help reduce costs and simplify logistics, allowing startups to expand rapidly into new regions.

Malta’s strategic location in the middle of the Mediterranean makes it the ideal gateway to access the African market. With English as one of the official languages, foreign entrepreneurs can easily navigate the country’s legal and business landscapes. Malta offers a mix of local talent and international professionals attracted by Malta’s quality of life. The island also encourages collaboration between innovative companies and the University, with the aim of boosting knowledge transfer and tailoring the offering of the education system with the needs of the jobs market.

Government Support to the Startup Ecosystem

Malta Enterprise, the Government agency tasked with attracting new foreign direct investment, has contributed to the development of a vibrant, engaging and talented startup community. The Startup Festival is now a yearly event for start-ups to exhibit their products and services, where attendees can engage directly with cutting-edge technology and innovative products. Malta Enterprise also offers a wide range of incentives not only to attract innovative startups to the island, but also ensuring that those that are already in Malta have the support needed to grow. For more information on incentives available in Malta, please read the article Supercharge your Company in Malta – A Guide to the Support Measures Available for Businesses.

In recent years, the startup ecosystem saw a significant increase in companies offering tech solutions in sectors such as Fintech (Malta is now home to many Electronic Money Institutions and Payment Solution Providers); Blockchain (not only related to cryptocurrencies, even though it should be underlined that Malta was the first country to adopt legislation to regulate Virtual Financial Assets), and Artificial Intelligence (with applications on many industries such as Tourism, Compliance and Medicine).

Attractive Conditions for Founders and Key Employees

The presence in Malta of incubators and accelerator programmes, such as Supercharger Ventures or the Visa Innovation Programme, are a testament to the progress that the jurisdiction has made over recent years to establish itself as a European Startup Hub.

Malta offers a wide array of favourable conditions to founders, co-founders and other key employees of the startup. These measures include attractive income tax, particular residency programmes and fast-track work permits. We have previously covered the Key Employee Initiative in detail.

How Dixcart Can Assist

The Dixcart office in Malta can assist startup founders since their very first steps on the island and for their entire journey in Malta. For further information, please contact Jonathan Vassallo, at the Dixcart office in Malta: advice.malta@dixcart.com. Alternatively, please speak to your usual Dixcart contact.

Cyprus: A Year in Summary – Private Wealth, Business, and Taxation in 2024

Posted on | by Megan Raguro

Introduction

Throughout 2024, we have shared various articles explaining and highlighting the benefits and routes available to those moving to Cyprus. We have also covered the corporate benefits and the required parameters for establishing a company in Cyprus.

In our final article for 2024, we highlight the key information from the last 12 months, with additional links for those looking for more detail. 

Individuals

Cyprus Tax Residency for Individuals

Cyprus tax residency rules are simple, there are only two rules. The 183-day rule and the 60-day rule. The 60-day rule means you could be considered tax resident after spending only 60 days in Cyprus each year, subject to further conditions.

It is also possible to receive a government issued tax residency certificate to provide to other jurisdictions to evidence your tax residency if required.

The Cyprus Non-Dom Regime

Cyprus has a very competitive Non-Domicile Regime which taxes an individual on their worldwide income at special rates. This means individuals can remit their income to Cyprus and use it, rather than keeping it ringfenced in a separate jurisdiction.

The special rates include 0% income tax on most Dividends, Interest, Capital Gains and Royalties. On top of this there is also no wealth or inheritance tax in Cyprus.

The Non-Dom Regime is available for 17 years in the first 20 years of tax residency and does not have a cost of participation like many others from across Europe.

Moving to Cyprus

There are a number of routes to gain residency in Cyprus, but they can be broken down into routes for EU and EEA nationals and routes for non-EU and EEA nationals, otherwise known as 3rd country nationals.

The route for EU and EEA nationals is simple. Due to EU directives, any EU and EEA national has the right to live and work in Cyprus, which is a member state of the EU. This means that the process is fast and straightforward and comes down to providing evidence to show that you will not become “a burden on the social security system of the Republic of Cyprus”.

For 3rd country nationals there are a number of options but the most common of them is through establishing a Foreign Interest Company (FIC) or through Permanent Residency by Investment (PRP). These both have individual specific advantages and requirements but the most notable is the right to work. Under the FIC method, 3rd country nationals have a residence and work permit, whereas under the PRP they do not have the right to undertake any form of employment within Cyprus.

Corporates

The Cyprus Corporate Tax Regime

Provided that a company has sufficient Economic Substance in Cyprus, it is considered Cyprus Tax Resident, and as a result can make the most of the fantastic Corporate Tax Regime available.

Some of these benefits include 0% Corporation tax on most Dividends, Interest, Capital Gains and Royalties as well as a standard rate of 12.5% corporation tax on revenues, which can be reduced to as little as 2.5% if your company is eligible to apply the Notional Interest Deduction (NID).

There are also no Withholding Taxes in Cyprus and over 60 double tax treaties making disbursing funds and receiving funds highly tax efficient.

The above benefits make Cyprus the perfect place for a Holding Company or a Family office, as it is a fantastic place to manage your investments from.

How Can Dixcart Cyprus help?

With over 50 years of experience in the sector, we have a wealth of knowledge in assisting families, and our teams offer in-depth expert knowledge on the local regulatory framework along with the backing of our international group of offices to help us find the perfect solution for you.

At Dixcart we know that every individual’s needs are different, and we treat them as such. We work very closely with our clients and have an in-depth understanding of their needs. This means we can offer the most bespoke services possible, propose the most appropriate structures, and support your specific requirements every step of the way.

We offer services raging all the way from company incorporation, Management and accounting services, and company secretarial services all the way to providing a serviced office for your Cypriot company.

Get In Touch

If you are interested in discussing your options and how using Cyprus to manage your wealth could help you, please contact us. We will be happy to answer any questions you have and assist in any way we can: advice.cyprus@dixcart.com.

Guide to Establishing and Managing a Swiss Company

Posted on | by Megan Raguro

Switzerland stands out as an ideal location for setting up a business, due to its economic and political stability, favourable tax rates, and central European location.

This article provides an overview of the essential steps involved in forming, operating, and, if necessary, dissolving a Swiss company.

Incorporating a Swiss Company

Choosing a Legal Structure

When establishing a business in Switzerland, entrepreneurs have several options:

  • Sole Proprietor: Owned by one individual who is personally liable.
  • Limited Liability Company (SARL/GmbH). Minimum share capital CHF 20,000 and partner(s) names are publicly disclosed.  
  • Limited Company (SA/AG). Minimum share capital CHF 100,000, with shareholder names kept private.
  • Branch: An extension of a foreign company that adheres to Swiss regulations with no initial capital requirement.

Selecting the appropriate structure depends on factors such as business scale, liability preferences, and taxation.

Key Steps in Incorporation

Setting up a Swiss company generally involves:

  1. Selecting and registering a unique business name.
  2. Opening a Swiss transitory bank account to deposit share capital.
  3. Preparing essential legal documentation.
  4. Holding a founders’ meeting with a public notary.
  5. Registering the company with the commercial register and tax authorities.
  6. Ensuring at least one director resides in Switzerland.

The entire process takes approximately three weeks.

Operational and Day to day Support

Accounting & Audit

Companies must maintain accurate financial records and comply with Swiss accounting standards. A statutory audit is required if specific thresholds are met, which are relatively high

Taxation

Corporate tax rates vary between 12% to 14% in most regions. Additional tax considerations include:

  • Value Added Tax (VAT): Mandatory registration for businesses earning over CHF 100,000 annually.
  • Dividend Withholding Tax: Eliminated or reduced between 5% and 15% for EU and treaty-based jurisdictions.
  • Zero tax regime for capital gains and dividend income.
Employment Regulations

Swiss labour laws emphasise flexibility and protection. Employment contracts should be detailed, and foreign employees require work permits. Additionally, while there is no national minimum wage, certain regions implement wage regulations.

Administrative Services

For smooth day-to-day operations, comprehensive administrative support is available. This includes:

  • Bookkeeping and Payroll Services
  • Business Plan Development
  • Management Accounts: Prepared monthly, quarterly, or annually, to aid strategic decision-making.
  • Regulatory Compliance: Expertise in Swiss insurance, social security, VAT and anti-money laundering (AML) reporting.

Liquidation and Company Dissolution

If the time comes to dissolve a Swiss company, the process must be carefully managed. The steps include settling all liabilities, distributing remaining assets to shareholders, and deregistering from the commercial register. Proper management throughout the liquidation phase is important to ensure all legal and financial obligations are met.

Additional Information

If you require additional information relating to Swiss companies and the advantages they can offer, please speak to Christine Breitler at the Dixcart office in Switzerland: advice.switzerland@dixcart.com.