The phrase fiscal residence or tax residence is commonly agreed to mean the place where a business is subject to unrestricted tax liability. Cyprus tax planning resident persons or companies are subject to tax in Cyprus on their global income although non tax local persons / companies are subject to tax only on their income derived in Cyprus.

At the corporate level there are a number of different domestic-law tests that regulate residency. Registration in Cyprus is not itself enough to get residence in Cyprus for tax purposes. A business will only be resident for tax purposes if it is managed and organized from Cyprus. Although no characterization of management and control is provided in the law, it is accepted as being the place at which major resolutions and decisions are taken and where the directors meet and most of the time reside.

It is highly suggested that in this mobile world neither the company formation nor the management test are ideal fundamentals upon which to build a corporate tax system, but a deeper understanding of real and effective administration as established in Lord Loreburn’s speech in De Beers Consolidated Mined Ltd ν Howe: A company resides where its real business is carried on and the real business is carried on where the central administration and control really abides.

To ensure the permanence of the organized operations it is vital to identify the distinction among cases where management and control of the company is implemented over its own constitutional organs i.e the directors and cases where the tasks of those constitutional organs are ‘usurped’ in the logic that management and control is exercised individualistically of or deprived of regard to those constitutional organs.

In cases which fall within the former class, it is crucial to recognize the difference between the role of an ‘outsider’ in advising and influencing the decisions which are to be taken. In that context, an ‘outsider’ is a person who is not himself, a participant in the formal process through which the relevant constitutional organ accomplishes its purpose.

About the author: PM Cyprus Law Firm has an extensive practice in supporting clienteles with the registration and management of a Cyprus international business company. Their professional corporate lawyers can take on the complete procedure of incorporating your company in Cyprus. For further information you can visit the above site.

Cyprus is the ideal location for establishing and operating a holding company because of Cyprus extensive network of double tax treaties and access to the EU directives along with its attractive tax system and its strategic position connecting Europe, Middle East and Asia.

A prospective client usually chooses Cyprus for setting up a holding company for the following reasons:

• lowest fixed corporate tax rate in Europe, only 10 %;

• all expenses incurred for the production of the income are deducted before arriving at the taxable income;

• losses can be carried forward indefinitely; Group tax less relief is available for companies forming part of a group, as defined under the law, thus allowing losses of one company to be set off against profits of another company;

• assist international groups seeking for low tax jurisdictions on dividend income. Such dividend income is tax exempt in most cases. The exemption from tax also applies to profits of a PE the Cyprus Company has in another jurisdiction.

• assist local groups paying dividends outside Cyprus to minimise their tax liability. There is no withholding tax liability;

• take advantage the favourable Double Tax Treaty Network ofCyprus and the EU directives;

• benefit from the favourable repatriation provisions of Cyprus tax law from payments of dividend, interest and royalties without the need to pay any withholding tax;

• exemption from capital gains tax on any disposal of the holding in an underlying company;

• flexible reorganization rules enabling rapid restructuring with minimum tax implications;

• Redomiciliation is permitted;

• Cyprus does not have any controlled foreign company legislation (CFC);

• Cypriot tax legislation does not contain any thin capitalisation regulations.

The Oxford Team consists of accountants, international tax consultants, lawyers, bankers and other professionals who shall be pleased to assist you with any of your queries.

Ready-made shelf companies are available so that you can establish your business and start utilising the Cyprus tax benefits immediately.

• Avoidance of permanent establishment in Russia by making sure that no services are provided in Russia by employees of the Cyprus company.
• Avoidance of having mind and management in the investors’ country.
• Maintenance of office in Cyprus where administrative services are provided.
• Employment of personnel in Cyprus either expatriate or local.
• The majority of the Board of Directors are residents of Cyprus.
• Bank accounts are maintained and operated from Cyprus.
• Keeping of accounting records is carried out in Cyprus and all documents are kept in Cyprus.

Advantages off­ered by Cyprus to companies establishing offices in Cyprus

• Availability of office and housing accommodation at very competitive rates and of high standard.
• Telecommunication facilities rank amongst the best in the world.
• Air connections with Europe, Russia and the Middle East.
• Qualified personnel at very competitive rates. Salaries are about 60% of rates in Europe.
• Excellent climate and very high standard of living and education facilities.
• Duty free goods of a capital nature for the company and the expatriate employees.
• Working permits are easily granted to expatriate employees.
• Low taxation for expatriates working in Cyprus.
• There are no payroll taxes for expatriate employees.

The above is intended to provide a brief guide only. It is essential that appropriate professional advice is obtained.

In the 21st century, regulation of offshore banking is all agedly increasing, although critics maintain it remains largely insufficient. The quality of the regulation is monitored by supra-national bodies such as the International Monetary Fund (IMF). Banks are generally required to maintain capital adequacy in accordance with international standards. They must report at least quarterly to the regulator on the current state of the business.

Is offshore banking safe and secure

Offshore jurisdictions are politically stable countries with strong economies and developed financial sector. Financial sector is tightly regulated to eliminate risk of bank failures and ensure a good image of a jurisdiction making offshore banking highly secure.

Offshore bank account setup steps:

The documentation that may be required when setting up offshore bank accounts includes:

1. Application forms with original signatures
2. Valid passport copy or driver’s licence
3. Banking references
4. Corporate legal documents

Offshore bank account services

It is possible to obtain the full spectrum of financial servicesfrom offshore banks, including:

• deposit taking
• credit
• wire-and electronic funds transfers
• foreign exchange
• letters of credit and trade finance
• investment management and investment custody
• fund management
• trustee services

• greater privacy
• low or no taxation
• easy access to deposits
• protection against local political or financial instability

Myths

• The public mistakenly links offshore banking to criminal activities, terrorism-financing and money laundering.
• Secondly, people think that offshore banking services areonly for high-income class, since ordinary people cannotafford them.

Offshore Banking Advantages

• All operations conducted through the account is protected by the legislation.
• Offshore banks provide access to politically and economically stable jurisdictions.
• Offshore banks may operate with a lower cost base and can provide higher interest rates than the legal rate in the homecountry due to lower overheads and a lack of governmentintervention.
• Interest is generally paid by offshore banks without tax deducted
• Offshore finance is one of the few industries, along with tourism, that geographically remote island nations cancompetitively engage in.
• Offshore banking is often linked to other structures, such as offshore companies, trusts or foundations
• Account is protected from creditors, tax authorities and other interested parties.

Offshore Banking Disadvantages

• Offshore banking has been associated with the underground economy and organized crime, through money laundering.
• The existence of offshore banking encourages tax evasion, by providing tax evaders with an attractive place to deposit their hidden income.
• Offshore jurisdictions are often remote, so physical access and access to information can be difficult.
• Developing countries can suffer due to the speed at which money can be transferred in and out of their economy as “hot money”.
• Offshore banking is usually more accessible to those on higher incomes

• Greater privacy (see also bank secrecy, a principle born with the 1934 Swiss Banking Act)
• Low or no taxation (i.e. offshore tax havens)
• Easy access to deposits (at least in terms of regulation)
• Protection against local political or financial instability

While the term originates from the Channel Islands being “offshore” from the United Kingdom, and most offshore banks are located in island nations to this day, the term is used figuratively to refer to such banks regardless of location, including Swiss banks and those of other landlocked nations such as Luxembourg and Andorra. Offshore banking has often been associated with the underground economy ando rganized crime, via tax evasion and money laundering; however, legally, offshore banking does not prevent assets from being subject to personal income taxon interest. Except for certain persons who meet fairly complex requirements, the personal income tax of many countries makes no distinction between interest earned in local banks and those earned abroad. Persons subject to US income tax, for example, are required to declare on penalty of perjury, any offshore bank accounts —which may or may not be numbered bank accounts —they may have. Although offshore banks may decide not to report income to other tax authorities, and have no legal obligation to do so as they are protected by bank secrecy, this does not make the non-declaration of the income by the tax-payer or the evasion of the tax on that income legal. Following September 11, 2001, there have been many calls for more regulation on international finance, in particular concerning offshore banks, tax havens, and clearing houses such as Clear stream, based in Luxembourg, being possible crossroads for major illegal money flows. Defenders of offshore banking have criticised these attempts at regulation. They claim the process is prompted, not by security and financial concerns, but by the desire of domestic banks and tax agencies to access the money held in offshore accounts. They cite the fact that offshore banking offers a competitive threat to the banking and taxation systems in developed countries, suggesting that Organisation for Economic Co-operation and Development (OECD) countries are trying to stamp out competition. Offshore banking is one of the most sought after banking solutions in today’s world. Offshore banking denotes the banking options opted by an individual outside the country of residence. The term offshore banking has been inspired from the fact that these banks are mostly located in the island nations – offshore. However, with numerous exceptions to the fact, like countries like Switzerland, Luxembourg etc, this term is now used in global context as well. Offshore banking is blessed with a number of features
The most significant ones are:

• Offers higher level of privacy as opposed to the local banks
• No taxation
• Protection against financial insecurities and instabilities in the local economy
• Less restrictive regulations
• Easy access deposits
• Except for the developed nations that offer for complete financial stability, individuals from the various undeveloped countries that are surrounded with instability may opt to resort to offshore banking for better steadiness in assets and resources
• Offshore banks offer better rate of interest
• Offers features that banks in the domestic realm may not possess like unspecified bank account etc
• Offers investment opportunities far greater and better invariety and quality than the ones available locally
• Exceptionally preferable for international workers

Finland is not a traditional international financial center, however, banks in Finland are permitted to open account for non-resident foreigners. However, in most cases, banks will insist on opening any accounts in person. The banking system in Finland is monitored and regulated by the Finnish Financial Supervisory Authority, or FIN-FSA (http://www.finanssivalvonta.fi/eng/).

This agency was newly created in 2009 and replaced the previous Finnish Financial Supervision Authority (please note a different form of the word “supervise”). The old Finnish Financial Supervision Authority Website is no longer  being updated; however, the list of banks presented on the website at http://www.rahoitustarkastus.fi/Eng/About_us/Supervised_entities_and_notifications/commercial_banks.htm is being updated. Most likely as the Financial Supervisory Authority matures, this list will migrate to the new website. The Finnish Deposit Guarantee Fund provides the depositor compensation plan for Finland. In 2008, the coverage limit was raised from €25,000 to €50,000 per institution. This level of coverage will remain in effect at least until the end of 2009. For more information on the Finnish deposit guarantee program, visit http://www.fin-fsa.fi/Eng/Customer_protection/Funds/etusivu.htm.

Liechtenstein exists to protect the stability of the financial system as well as its clients and to ensure the reputation of the banking system in the global community. Banks operating in Liechtenstein will offer any of the services of a major banking system from deposit accounts, to credit cards and lines of credit. Some of these banks will offer deposit boxes as well as precious metal deposit services.

You do need to understand that the banks in Liechtenstein are primarily investment banks and will tend to focus on their core business of asset management. Licensed banks operating in Liechtenstein can be found on the website of the Liechtenstein Banker’s Association atwww.bankenverband.li. This site is very user friendly and is available in English. All of the member banks (there are 15 as of this writing)are listed with full contact information. While German is the official language all of the websites are accessible in English as well. Liechtenstein has established a deposit guarantee scheme through the Liechtenstein Banker’s Association. This plan is known as the “Deposit Guarantee and Investor Protection Foundation of the Liechtenstein Bankers Association”. The plan currently provides up to €20,000 in protection. For the most current information about the plan, visit the website of the Lichtenstein Banker’s Association.

In Middle Ages Uzbekistan was the cultural and economic center of the enormous empire stretched through the Central Asia to India and Iran, and a key site of trading crossroads between China and the West. Today it is the most industrialized republic in Central Asia, which promises to become the economic center connecting Europe with the Western China, the Central and Southern Asia.

It has everything for that. Uzbekistan possesses an extensive transport network and the large urban population. Its capital, Tashkent, is the biggest city in the Central Asia with the population of 2.1 million people and the only city having system of underground in Central Asia. The national transport airline, Uzbek Air Ways, connects Tashkent with the largest cities and capitals of Europe, Asia and USA.

After the declaration of the independence September, 1, 1991 Uzbekistan is quickly gaining its place on a world scene. It is a member of the United Nations Organization, the International Currency Fund, the World Bank, the European Bank of Reconstruction and Development, the Asian Development Bank; has concluded bilateral agreements with leading world powers. Already more than thirty countries have opened the embassies in Tashkent.

Uzbekistan started coordinated program of political liberalization and economic reforms. With the purpose of stage-by-stage transition to market economy the program is guided by several paramount priorities. The basic among them is maintenance of social stability and minimizing economic declines at the transition to market system.

Diversified economy

The agriculture constitutes almost half of the production of net material product of Uzbekistan. Uzbekistan is the fourth, largest producer of cotton, but only 16 % of a crop of a cotton is domestically processed. The target is to increase this parameter up to 40 % in the near future. At the same time, improvements in efficiency of cultivation of a cotton will allow growing wider range of foodstuff.

Uzbekistan has significant industrial potential, it is the main producer of textiles, fertilizers, machines, planes and the aviation equipment in the Central Asia. Among the youngest industries are petrochemical substances, energy, metallurgy and construction materials, and the big centers of the chemical industry on production and processing of a cotton. There are huge opportunities for investment in these areas.

Services

Recently privatized branches of retail trade and services represent interesting prospects for commercial development. Bakeries; public catering; construction; the enterprises producing carpets and processing a leather, among others, are also privatized. Licensing, franchise and conclusion of subcontracts might provide foreign business by a basis for expansion of operations whole country before modernization of local production and opportunities of marketing.

There are also many opportunities for foreign investments in development of the tourism industry. Uzbekistan is the native land of some of the world’s famous monuments of medieval Islamic architecture. On east mountains of Tjan’-Shan provides an opportunity for winter kinds of sports and skiing.

Conditions of investments

Investors may repatriate profit to their countries, import and sell the goods in the local market, rent the ground and buy buildings and the equipment. They are protected from nationalization, for these purpose Fund of insurance of investments is created. Foreign firms may buy securities and shares of the Uzbek enterprises by direct contracts or on the Tashkent stock exchange through commercial banks and the broker companies.

Geography and resources

Uzbekistan is situated in the center of the Central – Asian steppe which was native land of Amir Temur (Tamerlane). Uzbekistan borders with Kazakhstan, Afghanistan, Turkmenistan, Tajikistan, and Kyrgyzstan. Despite that Uzbekistan has no common borders with China, Pakistan and India, these large markets are at distance less than 600 kilometers. The area of Uzbekistan equals to 447,400 sq. kilometers. Syr-Darya and Amu Darya – two biggest rivers of the Central Asia – form borders in the north and the south. In their fertile valleys the cotton, fruits and vegetables are grown. About 3/5 of the countries constitute deserts. The mountains of Tjan’-Shan separating the Central Asia from China, and fertile Fergana valley are situated in the east. Aral Sea forms a part of the western border.

Uzbekistan possesses richest mineral resources, including precious metals. There are huge deposits of gold in desert Kyzyl – Kum that makes the country seventh biggest manufacturer of gold. Copper, zinc, lead, aluminum and molybdenum were found in the area Kuramina. There are also large deposits of feldspar, fluorine, clay, phosphate, asbestos and kaolin in the area. These deposits are significant, and development of deposits of minerals is not completed yet. Hence, there are huge potential for expansion, modernizations and export.

How It Works

Accepting credit card payments through your web site actually requires multiple components. Between a paying customer and your bank account, three layers exist:

Payment Gateway – This is the code that will transmit a customer’s order to andfrom an internet merchant account provider. The payment gateway provides you theability to accept customer billing information (credit card number, credit card type, expiration date, and payment amount) and the necessary validation steps thatmust be followed before the credit card is actually billed.

Internet Merchant Account – A Merchant Account is an account with a financial institution or bank, which enables you to accept credit card payments from yourclients. The payment gateway actually transmits the billing information to theinternet merchant account provider. Unfortunately, most local banks do not provideinternet merchant account capability.

The main reason why most local financial institutions or banks do not want toprovide online merchant accounts is because transactions conducted over theInternet are totally different from face to face transactions where a signature is required to authorize the purchase. This makes online transactions prone to creditcard fraud. Fraud protection should be one of your primary considerations when choosing an internet merchant account provider.

Web Site – Regardless of which merchant provider and gateway service you choose,your web site will need to integrate with your service providers. Most providers include detailed web integration instructions.

How Much Does It Cost ?

Understanding the total costs of your merchant provider can be tricky. Remember my Google example – there are more merchant account providers than there are peoplelooking for internet merchant accounts so ask questions and be picky! Typically, an internet merchant account will have three types of costs:

- Up Front ApplicationFees

- On Going Fixed Fee

- Discount Rate

- Fixed Transaction Fee

- Termination Fees

- Miscellaneous Fees

Let us discuss each type of cost:

Up Front Application Fees

Many internet merchant accounts will require an up front application fee. Thisfee, supposedly, is to cover their costs for processing your application. In caseyou choose not to open an internet merchant account, they still cover theirinitial costs. Although common, many providers waive these fees and I recommendthat you choose a provider that does not require an up front fee.

On Going Fixed Fee

Most all internet merchant providers require a monthly fixed fee or “statementfee” as it is commonly named, which is simply another way to cover their costs andmake money. You will be hard pressed to find a provider that does not require thistype of fee on a monthly basis. However, do not choose an internet merchantaccount that requires more than $10 per month. Additionally, most internetmerchant providers require a monthly minimum (usually $25). The bottom line isthat you will be paying at least $25 per month (on top of the monthly statementfee) for your account.* Discount RateUsually, the discount rate will be between 2 and 4 percent. The discount rate isthe sales commission the provider earns on each sale. For example, if the discountrate offered is 3%, and you receive a sale over your web site for $20, you willowe 60 cents to your internet merchant provider.

Fixed Transaction Fee

Usually between $0.20 and $0.30, the fixed transaction fee is the fixed feeportion of each sale. Unlike the discount rate, the fixed transaction fee is thesame for every transaction. Whether you get a $1 sale or a $100 sale, the transaction fee will be the same.

Termination Fee

A bit more hidden in the small print, a termination fee can apply if you cancelyour merchant account within a specified period of time (usually within one year). But beware, some merchant providers require a three year commitment!

Miscellaneous Fees

If a customer requests a refund and they want their credit card credited, aninternet merchant provider will charge you a separate fee (usually between $10 -$20). Read the contract carefully, as other special fees may apply.

Putting It All Together

Now that the different fees have been explained, let us look at an example set oftransactions to help understand what an internet merchant account may cost your business on a monthly basis.

I have created a simple formula to help you calculate your monthly charges:

Total Charges = Statement Fee + Number of Transactions x (Average Sale x DiscountRate + Fixed Transaction Fee) + (Number of Chargebacks x Chargeback Fee)
For example, let us see you sell widgets over the internet. The sales price foreach widget is $10. You typically have 100 sales per month and about 5 peoplerequest refunds (chargebacks). For this example, let us assume you have signed up with Jones&Jones internet merchant account services and have the following terms:Discount Rate – %2.5Statement Fee – $10Fixed Transaction Fee – $0.30Chargeback Fee – $15Using my formula above, your monthly Jones&Jones charges will be:Total Charges = 10 + 100 x (10 x .025 + 0.3) + (5 x 15) = $140

You can calculate your monthly sales revenue by multiplying your sales volume byyour price:Monthly Sales Revenue = 100 x $10 = $1000

Your internet merchant provider is costing you 14% of your total sales.

Making Your Decision

Before you choose and internet merchant provider, understand all of the costcomponents. Use your current or projected sales data to forecast what yourinternet merchant account costs will be. Planning ahead can save you time and money.