UNITED KINGDOM. History and Government. Legal System. Geography

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1 UNITED KINGDOM

2 UNITED KINGDOM Cyprus was a colony of the British Empire until 1960 when it gained its independence. Thus, the Cyprus Legal System is fundamentally based on the English model. Cyprus Companies are governed by the Companies law, Cap The law was enacted on and is based on the English Companies Act of The most recent amendment of the English Companies Act was in 2006 introducing a comprehensive code of company law for the United Kingdom, and made changes to almost every facet of the law in relation to companies. As a result of that, UK and Cyprus companies share the same fundamentals and are very similar to their use. History and Government Britain is a parliamentary democracy with a constitutional monarch, Queen Elizabeth II, as head of the State. The British constitution, unlike those of most countries, is not set out in a single document. Instead it is made up of a combination of laws and practices which are not legally enforceable, but which are regarded as vital to the working of government. The stability of the British government owes much to the monarchy. Its continuity has been interrupted only once (the republic of ) in over a thousand years. Parliament, Britain's legislature, is made up of: the House of Lords, the House of Commons and the Queen in her constitutional role. Geography The United Kingdom of Great Britain and Northern Ireland, or UK, is in Western Europe. It comprises the island of Great Britain (England, Scotland and Wales) and the northern one-sixth of the island of Ireland (Northern Island), together with many smaller islands. The mainland areas lie between latitudes 49ÆN and 59ÆN (the reach to nearly 61ÆN), and longitudes 8ÆW to 2ÆE. The Royal Greenwich Observatory, near London, is the defining point of the Prime Meridian. The United Kingdom has a total area of approximately 245,000kmÇ. The UK lies between the North Atlantic Ocean and the North Sea, and comes within 35km (22 miles) of the northwest coast of France, from which it is separated by the English Channel. Northern Ireland shares a 360 km international land boundary with the Republic of Ireland. The Channel Tunnel, bored beneath the English Channel, now links the UK with France Legal System Although Britain is a unitary state, England and Wales, Scotland and Northern Ireland all have their own legal systems, with considerable differences in law, organisation and practice. However, a large amount of modern legislation applies throughout Britain. The law is divided into criminal law and civil law; the latter regulates the conduct of people in ordinary relations with one another. The distinction between the two branches of the law is reflected in the procedures used, the courts in which cases may be heard and the sanctions which may be applied. The legal system of England and Wales comprises both a historic body of conventions known as common law and equity and Parliamentary and European Community legislation; the last of these applies throughout Britain. Common law, which is based on custom and interpreted in court cases by judges, has never been precisely defined or codified. It forms the basis of the law except when superseded by legislation. Equity law consists of a body of historic rules and principles which are applied by the courts. The English legal system is therefore distinct from many of those of Western Europe, which have codes derived from Roman law.

3 UK NON-RESIDENT COMPANY (CYPRUS TAX RESIDENT BRANCH) A UK non-resident Company is effectively a UK Company that has transferred its tax residence from the UK to Cyprus via a Branch in Cyprus (under Section 347 of the Cyprus Companies Law). Procedure A registration certificate of the UK Company is submitted to the Income Tax Office in Cyprus in order to register the Branch and get a TIC Registration (Tax Identification Code) and Taxisnet registration. Once the Branch obtains the TIC number, all relevant documents are submitted to the HMRC (Her Majesty's Revenue & Customs) and a tax Clearance Form is issued. By registering the Branch of a UK Company in Cyprus its world-wide income will be taxed in the same manner as if the company was a Cyprus registered company. This means that the UK Company will be liable to 12.5 % corporate tax on its net world-wide income. In order to obtain the benefit of this tax regime it is essential that the UK Company's business is genuinely managed and controlled from Cyprus, and that its place of effective management is in Cyprus. 'Control' for the purposes of deciding whether a UK company is managed and controlled from Cyprus does not mean control of the company through voting rights but control of the company's business. Therefore, one must look at where control is vested, and this will normally be in the hands of the directors. Based on the above, in order to establish a Cyprus based 'Management and Control' of a company, the following conditions must be satisfied: I. The majority of the Board members must be residents of Cyprus (this majority should be an adequate number to form a quorum for Board meeting purposes); II. Board meetings must be held in Cyprus; III. General policy of the company (as demonstrated by internal records) should be formulated in Cyprus; IV. Day-to-day management of the company should be exercised in Cyprus; V. Company bank accounts must be controlled by the Cyprus Directors and preferably be located in Cyprus. UK - NON RESIDENT Articles of Association The Articles of Association of a UK non-resident Company has specific clauses that differentiate from a UK company Articles of Association. Specifically the differentiate clauses are: Appointments of Directors Alternate Directors Disqualification of Directors Proceedings of Directors

CHARACTERISTICS OF A UK NON-RESIDENT COMPANY (Cyprus tax resident Branch) Statutory description of company A UK and a Cyprus Private Limited Company Governing corporate legislation Cyprus tax

4 CHARACTERISTICS OF A UK NON-RESIDENT COMPANY (Cyprus tax resident Branch) Statutory description of company A UK and a Cyprus Private Limited Company Governing corporate legislation Cyprus tax resident branch: Companies Law, Cap 113, as amended UK Company: Companies Act 2006 as amended (the 2006 Act ) Time-scale for incorporation Cyprus tax resident Branch: About two weeks although a reduction in this time scale is possible in cases where there is urgency UK Company: Companies are incorporated within two (2) working days from the moment you provide all the required documents and information Availability of ready-made companies Cyprus tax resident Branch: Available UK Company: No The regulations governing availability of names Names identical or similar enough to create confusion, offensive or otherwise undesirable are not permitted. Minimum and maximum number of shareholders Cyprus tax resident Branch: Minimum of one, maximum of 50 nominee shareholders are permitted as is holding shares on trust. UK Company: Every limited company must have at least one shareholder. There' s no maximum number. Directors can be shareholders Statutory minimum paid-up capital requirements Cyprus tax resident Branch: One share must be subscribed to at the date of incorporation but there is no requirement that this be paid up. There is no minimum share capital requirement under statute. UK Company: None

5 Standard authorised capital Cyprus tax resident Branch: Usual capital is 15,000 UK Company: None Classes of Share Available Cyprus tax resident Branch: The following classes of shares are available: registered (nominative) shares, preference shares, redeemable shares and shares with special (or no) voting rights. It is not permissible to have shares of no par value or bearer shares. UK Company: Share capital may be divided into different classes. Redeemable shares and share warrants to bearer may be issued. No par value shares are not permitted. Are details of shareholders publicly accessible?. The annual return provides details of shareholders and is kept publicly at the Registrar of Companies in Cyprus.. The annual return provides details of shareholders and is kept publicly at Companies House. Minimum and maximum number of director(s) Sole directors are allowed. There is no statutory maximum number of directors although the articles may impose a limit. Nature of the power of Director(s) A director of a company is bound to act honestly and in good faith in the best interests of the company. Directors are bound by law to promote the well-being of the company and are responsible for: (a) the general governance of the company and its proper administration and management; and (b) the general supervision of the company's affairs Are corporate directors permitted? Cyprus tax resident Branch:. UK Company: but a company must have at least one director who is an individual. UK - NON RESIDENT Are details of directors publicly accessible? Cyprus tax resident Branch:. The details of directors are filled at the Registrar of Companies in Cyprus and are publicly accessible. UK Company:. The details of directors are filled at the Companies House and are publicly accessible. Must Accounting Records be kept and filled? Must Accounting Records be audited? Cyprus tax resident Branch: UK Company: unless the company falls within one of the exceptions. Must the company have a registered presence in the territory of incorporation?

CHARACTERISTICS OF A UK LIMITED (LTD) Governing corporate legislation Companies Act 2006 as amended (the 2006 Act ) Time-scale for incorporation Companies are incorporated within two (2) working days

6 CHARACTERISTICS OF A UK LIMITED (LTD) Governing corporate legislation Companies Act 2006 as amended (the 2006 Act ) Time-scale for incorporation Companies are incorporated within two (2) working days from the moment you provide all the required documents and information. The regulations governing availability of names Names identical or similar enough to create confusion, offensive or otherwise undesirable are not permitted. Minimum and maximum number of shareholders Every limited company must have at least one shareholder. There's no maximum number. Directors can be shareholders. Statutory minimum paid-up capital requirements None Classes of Share Available Share capital may be divided into different classes. Redeemable shares and share warrants to bearer may be issued. No par value shares are not permitted. Are details of shareholders publicly accessible?. The annual return provides details of shareholders and is kept publicly at Companies House. Minimum and maximum number of director(s) Sole directors are allowed. There is no statutory maximum number of directors although the articles may impose a limit.

general supervision of the company's affairs Are corporate directors permitted? but a company must have at least one director who is an individual. Are details of directors publicly accessible?

7 Nature of the power of Director(s) A director of a company is bound to act honestly and in good faith in the best interests of the company. Directors are bound by law to promote the well-being of the company and are responsible for: (a) the general governance of the company and its proper administration and management; and (b) the general supervision of the company's affairs Are corporate directors permitted? but a company must have at least one director who is an individual. Are details of directors publicly accessible?. The details of directors are filled at the Companies House and are publicly accessible. Must Accounting Records be kept and filled with the Companies House? Must Accounting Records be audited? unless the company falls within one of the exceptions. Must the company have a registered presence in the territory of incorporation? UK - LIMITED (LTD)

CHARACTERISTICS OF A UK LIMITED LIABILITY PARTNERSHIP (LLP) Governing corporate legislation LLP Act 2000 and the applicable provisions of the Companies Act 2006.

8 CHARACTERISTICS OF A UK LIMITED LIABILITY PARTNERSHIP (LLP) Governing corporate legislation LLP Act 2000 and the applicable provisions of the Companies Act Time-scale for incorporation Two working weeks plus one week for the issuance of the certification Availability of ready-made companies Available Statutory description of LLP Company An LLP company has organizational flexibility but it is taxed as partnership. The regulations governing availability of names Names identical or similar enough to create confusion, offensive or otherwise undesirable are not permitted. Minimum and maximum number of members A minimum of two members are required. The members have equal responsibility. Information published relating to members Details of all members should be recorded with the Companies House and they are available to pubic.

LLP taxation The members of an LLP are exempt from UK tax only if there is no business or trade carried out with or within

9 Minimum and maximum number of director(s) No limit Nature of the power of Director(s) Two of the Directors are responsible for the affairs of the company. LLP taxation The members of an LLP are exempt from UK tax only if there is no business or trade carried out with or within the UK. Accounts It is a requirement to prepare, audit and file accounts (small companies are excepted) Requirement to file annual returns Must the company have a registered presence in the territory of incorporation? UK - LLP

10 Information required to register a UK non-resident/ UK Ltd/ UK LLP 1. Certified copy of the passport of each beneficial owner(s) by either a lawyer or a notary public or a bank. 2. Bank reference for each beneficial owner(s) or a professional reference letter by a lawyer or an accountant. 3. A recent copy of utility bill (not more than 6 moths old water or electricity bill) that verifies home address of each beneficial owner 4. Personal details: Full name; Address business and private; Nationality; Occupation; Telephone and telefax numbers (private, home and mobile); . Corporate Documents The corporate documents that are delivered to the shareholders of a UK non-resident/ UK Ltd/ UK LLP are as follows: Certificate of Incorporation; Memorandum and Articles of Association; A certified copy of the resolution appointing the first Director; A certified copy of the first minutes of the Board of Directors; Share certificates; Company s seal.

DELAWARE. History and Government. Legal System

DELAWARE. History and Government. Legal System DELAWARE DELAWARE Delaware has developed over the last few years into a very popular location for corporate tax planning. An increasing number of businesses choose Delaware for their corporate headquarters,