Leading Professional Services ... across South East Europe

1. Leading Professional Services ... across South East Europe Taxes in 2010: Trends and Opportunities Sheraton Sofia Hotel Balkan, April 13, 2010 – Serdika Hall

2. Our Profile • formed in 1987 • professional services Group operating in South East Europe • over 175 people in Cyprus and the Balkans. • Eurofast is administered by a single management team based in Cyprus and Greece which travels extensively around the Region addressing all client needs in every one of these countries in the Region in one single meeting, using one single language for all the countries involved.

3. Our Services • Taxation • International Tax • Cross Border Structuring • Real Estate • Tax & Financial Due Diligence • Corporate and Fiduciary Services • Trust & Management • Registration of companies and other entities • Corporate and Fiduciary Services • Trust Creation and Administration • Payroll & Accounting

4. Our Mission We do not seek merely to satisfy our clients, We seek to delight them!

5. Our Philosophy Our philosophy is delivering distinctive service to our clients by going to extraordinary lengths to delight, not just satisfy.

6. Partner Led from Start to Finish • One Management Team • Western European philosophy • One reference point • One meeting handles all!

7. Our Offices Cyprus Greece Bulgaria Romania Albania Serbia Montenegro FYROM Local Knowledge, Global View

8. Our Offices

9. OurAwards & Milestones

10. Our Publications Company Profile Cyprus & Russia Tax Facts 2009 South East Europe Newsletter

11. CYPRUS:Corporate & Tax Update Sofia, 13th April 2010

12. Agenda • General Corporate and Tax Remarks • Recent Corporate Changes: - Cyprus companies law amendments - Redomiciliation of a foreign company to Cyprus - European companies • Recent Tax Changes: - Income Tax Circular 2009/6 - Income Tax Law (4)110(I)/2009 - Special Defence Contribution law (4)111(I)/2009 • Benefiting via the use of Cyprus Companies CYPRUS: Corporate & Tax Update SOFIA, April 2010

13. General Corporate & Tax Remarks • Cyprus Companies Law based on UK’s Companies Act 1948 • Cypriot legal framework promotes both corporate and tax planning • Tax and legal systems in full compliance with EU and OECD requirements • Well established international financial center • Transparent legal system • World class professional services CYPRUS: Corporate & Tax Update SOFIA, April 2010

14. General Corporate & Tax Remarks • Lowest corporation tax in EU (10%) • Inbound dividends • Corporate income tax relief • May be exempt from SCDF • No capital gains tax on disposal of shares where imm. property outside CY or non CY situated property • Immediate implementation of all EU Directives • No inheritance tax • Extensive network of Double tax treaties CYPRUS: Corporate & Tax Update SOFIA, April 2010

15. CORPORATE UPDATES CYPRUS: Corporate & Tax Update SOFIA, April 2010

16. Recent Corporate Updates: Cyprus companies law amendments • Use of corporate seal: • No longer obligatory as to validate the execution of documents by and on behalf of a Cyprus Company • Listing of Securities of Cypriot companies abroad: • Prospectus can be filed in any widely accepted language, not only in Greek • Prohibition of financial assistance: • Exception (subject to conditions) to the general rule introduced • Issue of redeemable preference shares: • Preference shares issued may be redeemable either at the option of the company or at the option of the shareholder CYPRUS: Corporate & Tax Update SOFIA, April 2010

17. Recent Corporate Updates: Cyprus companies law amendments • Registration of amendments to registered charges: • Obligatory and possible to register amendments to or assignments to third parties of a registered charge • The pledge of shares or other rights held by a Cypriot company in other CyCo and financial collateral arrangements need not be registered • Cyprus may keep a share register in abroad • part of the basic register kept in Cyprus CYPRUS: Corporate & Tax Update SOFIA, April 2010

18. Recent Corporate Updates: Redomiciliation of a foreign company to Cyprus • Foreign companies may transfer their seat in Cyprus and continue their existence under the laws of Cyprus • Condition: should be permissible under the jurisdiction of incorporation of the foreign co • Cost efficiency! No liquidation and re-registration costs • Enhances the freedom of establishment • Tax benefits • Migrating company NOT deemed to be liquidated, hence no taxable disclosure of its hidden reserves where applicable. CYPRUS: Corporate & Tax Update SOFIA, April 2010

19. Recent Corporate Updates: Redomiciliation of a foreign company to Cyprus Redomiciliation example (subject to various assumptions) BVI CY Co • Disposal of shares in • Ukrainian Co: • tax exempt in Cyprus • No CIT • No CGT Redomiciliation RUS Co RUS Co CYPRUS: Corporate & Tax Update SOFIA, April 2010

20. Recent Corporate Updates: European Companies • A European public limited company (Societas Europaea - SE) can be established in any EU member state • Real seat principle has application – the place of registration is also the place of central management and administration • Subject to formation requirements - formation by merger available only to public ltd companies from different member states - formation of an SE holding company available to public and private ltd companies having subsidiaries or branches - formation of a joined subsidiary available under the same circumstances to any legal entities governed by public or private law • Minimum share capital 120.000 euro • Ideal for multinational entities with activities and operations throughout the EU • Community legal personality • Freedom of movement - can be easily transferred to another member state • Fully benefits from the single market • Reduced administration costs • Cyprus: ideal location! Benefiting from tax incentives available CYPRUS: Corporate & Tax Update SOFIA, April 2010

21. Recent Corporate Updates: European Companies (1) Cyprus • Main company transformed into an SE by applying the relevant provisions of the regulation • Subsidiaries be transformed into single branches • A network of branches may be seen as a strategic and efficient choice • Minimization of structural costs • May be efficient for insurance companies • The SE can freely migrate to another EU jurisdiction. CYPRUS: Corporate & Tax Update SOFIA, April 2010

22. Recent Corporate Updates: European Companies (2) Cyprus • Main company transformed into an SE by applying the relevant provisions of the regulation • SE subsidiaries are formed in line with the relevant regulatory framework • The SE subsidiaries adjust to the domestic regulations of their country of residency • Preserve the protection of their parent company • The SE can freely migrate to another EU jurisdiction CYPRUS: Corporate & Tax Update SOFIA, April 2010

23. Recent Corporate Updates: European Companies (3) • Group reorganisation: • Main company transformed into an SE by applying the relevant provisions of the regulation • SE Operating Subsidiaries are also established to undertake the functioning of the different product lines • Branches of the operating subsidiaries may also be established in other jurisdictions • May be efficient for multinational companies • The SEs can freely migrate to another EU jurisdiction. CYPRUS: Corporate & Tax Update SOFIA, April 2010

24. TAX UPDATES CYPRUS: Corporate & Tax Update SOFIA, April 2010

25. Recent Tax Updates:Income Tax Circular 2009/6Investment Instruments considered as ‘securities’ • Cyprus: profits deriving from the disposal of securities are exempt from taxation. • The term ‘securities’ has been extended to include: -Ordinary shares -Founder’s Shares -Preference Shares -Option on titles -Debentures -Bonds -Short positions on titles -Futures and forward titles -Swap on titles -Depositary receipts on titles – ADR + GDR CYPRUS: Corporate & Tax Update SOFIA, April 2010

26. Recent Tax Updates:Income Tax Circular 2009/6Investment Instruments considered as ‘securities’ • Rights of claim on bonds and debentures • Index participations only if they (result on) represent titles • Repurchase agreements or Repos on titles • Participation / shares in companies like Russian OOO, OAO and ZAO, the American LLC provided (taxed on their profits), the Romanian SE and SRL and the Bulgarian AD and OOD. • Units in both, open and closed end collective investment schemes founded, registered and are operating according to the provision of the specific and relevant legislation of the country in which they have been founded. • Promissory notes and bills of exchange are NOT securities - extensively profits deriving from their disposal shall be taxable. CYPRUS: Corporate & Tax Update SOFIA, April 2010

27. Recent Tax Updates:Income Tax Law (4)110(I)/2009 • Abolished income tax for interest income earned outside the ordinary course of business of a CyCo: -Provisions in place for 10% SDC still apply • Interest received by CIS deemed to be active business income - taxed with 10% • Securities extended include units in Collective Investment Schemes (CIS) • Changes applicable from 2009 • applicable to all tax resident companies and CIS CYPRUS: Corporate & Tax Update SOFIA, April 2010

28. Recent Tax Updates:Special Defence Contribution law (4)111(I)/2009 • Abolition of 1% participation exemption on dividends • the remaining provisions still in place. >50% of activities income leads to investment income and foreign tax amounting to <5% (15% SDC) • Reduction from 15% to 3% on • Deemed dividend distributions from collective investment schemes • Proceeds on the liquidation of a collective investment scheme The aforementioned provisions are not applicable to resident beneficiaries. • Interest received by CIS exempt from SDC – treated as income • No SCD on redemption of units or participations in collective investment schemes • It does not constitute a reduction of capital CYPRUS: Corporate & Tax Update SOFIA, April 2010

29. Cyprus Int’l Holding Company Invests in C. E. & the Balkans Ultimate American, EU or other corporate ownership, or Int’l Trust or physical persons • Paid to parent: 0% WTT • Dividends received in Cyprus: 0% CIT Cyprus Int’l Holding Company • No participation requirements • No holding requirements Ukraine Cyprus Russia FYROM India Serbia, Montenegro Romania Albania Bulgaria CYPRUS: Corporate & Tax Update SOFIA, April 2010

30. Thank you !