The Need For Substance

Establishing and maintaining adequate substance in Cyprus, is considered an important aspect in order to minimize the risk of denial of double tax treaties and of potential challenges from foreign tax authorities who might seeking to question a company's tax residency status and try to tax it locally. In view of the above, we set out some practical recommendations of several measures and actions to be implemented in order to ensure that sufficient substance is maintained.

Practical steps to enhance substance

In practice, the creation of substance in Cyprus would primarily require, amongst others:

• acquisition or renting of office premises located in Cyprus, from where a company will or be deemed to carry out its activities;