Trading companies can be used for the invoicing or re-invoicing of goods and services, as well as for the receipt of trading commissions from any jurisdiction to any destination, and for transit trade activities.

A Cyprus International Business Company (IBC) is one of the most popular and effective methods of tax planning for trading activities.

The entry of Cyprus to the European Union (EU) gives added value to Cyprus IBCs, as there is no distinction between local companies and (offshore) IBCs; all companies have a European status and still enjoy substantial fiscal advantages:

- no substance requirements;

- no stamp duties on normal trading activities;

- no withholding tax on distributions of dividends;

- VAT system not applicable on offshore activities;

- no capital gain tax on the liquidation of subsidiaries;

- no capital gain tax on the liquidation of the trading company;

- full exemption from tax on dividends received from
   participating subsidiaries;

- no tax on profits from the operation or management of
   a Cyprus registered vessel;

- international business branches that are managed and controlled
   from abroad and international business partnerships are totally
   exempt from corporate income tax.