Technology & software companies in today's everchanging world
When starting a software company, there are many things to consider. Determining the legal structure of your software company, is amongst the first.
Technology these days advances at warp speed with new technologies evolving by the nanosecond. Tech start-ups, as well as early-stage technology companies, pop up at every corner. Unique software and videogames are being worked on in garages, basements, high rises, and deluxe offices on every continent. Undoubtedly, the tech world evolves at a frenetic pace, and it takes plenty of vision, hard work, and skill to stay ahead of the game in this sector. In such a fast moving sector, having a team of tech lawyers that have a deep understanding of the technology world is vital.
A team of tech lawyers that will provide you with practical, commercial guidance and legal advice. At every step of the way. From starting up your software company, to scaling and finally exiting.
Why you should seek specialized legal advice for your tech company
When delving into the world of tech, it is crucial for any investor like yourself to seek assistance from specialized tech lawyers equipped to help you with the ins and out of this complex yet utterly rewarding world.
There is plenty of legal and contractual minutia that must be considered by software and technology companies developing new products and services.
- Deciding upon the legal structure of your software company
- Determining the modus vivendi of your company and putting in place the shareholders agreements
- Protecting your company’s intellectual rights
- Adding value to your company’s intellectual assets
- Structuring your corporate structure, in a tax efficient manner and taking advantage of tax planning opportunities
- Putting in place employee agreements and incentivising your most valuable personnel with share option schemes
- Raising funding, either through private equity or venture capital funding, to help grow your software company
- Acquiring, leasing or disposing assets
- Having in place the necessary licensing and other commercial agreements that will protect your rights and assets
- Preparing for Exit
Cyprus. An excellent location for starting your software company
Cyprus has put in place a whole range of incentives aimed at encouraging tech and software companies to take the leap and set up on the island. And has done so, successfully.
The Cyprus IP Box Regime
Used throughout the world to provide incentives to research and development (R&D) activities in particular jurisdictions, the Cyprus IP Box Regime applies lower tax rates on revenues generated from licenses, royalties, patents, and the sale or transfer of qualified IP assets.
In Cyprus' case, this patent or innovation box, as it is also referred to, offers investors the following benefits:
- 80% of the profits made from the intangible assets involved are deducted for tax purposes. This means that companies under this regime are effectively taxed at 2.5% instead of at the island's standard rate of 12.5%.
- Expenses related to IP development or acquisition may be amortized for up to 20 years.
- Capital gains made from the disposal of intangible assets are exempted from taxation.
- Cyprus IP Box Regime complies with EU standards as defined by the EU Code of Conduct, the international tax treatment of IP income, and any pertinent guidance issued by the OECD.
Other incentives to software companies
Starting in early 2022, the Cypriot government launched its Action Plan for Attracting Companies to Operate and Expand their Activities in Cyprus, a bold initiative aimed at promoting the island as an international business center and attracting both more investors and talented, highly skilled professionals.
Among the changes highlighted by the plan, the following stand out:
- A push to increase the number of highly skilled and university-trained, third-country nationals employed locally by offering them easy-to-acquire works permits.
- A simpler process by which to procure a work permit and social security benefits. This includes extending the permit's validity to three years, issuing it within a month, and allowing spouses to also work in Cyprus. Furthermore, via bilateral agreements, social security will be guaranteed and can be transferred back upon return to their home country.
- A newly minted Digital Nomad visa that allows remote workers to set up their homebase in Cyprus for a period of up to three years. This visa is available as long as the individual is making more than 3,500 Euros per month and has both a clean criminal record and valid health insurance.
- Tax exemptions extending to 17 years for high-skilled foreign employees (provided that they were non-residents in Cyprus prior to the start of their employment). This would result in 50% tax exemption to new residents – employees, with an annual remuneration of over EUR 50,000 per year and current eligible residents -employees, to extend the benefit from 10 to 17 years.
- Eligibility to become a Cypriot citizen is dropped from seven to five years, or four years if the individual can show good command of the Greek language.
How Meridian Trust can help you
Setting up a new company regardless of industry, in a foreign jurisdiction, can be a challenging task.
Meridian tech lawyers, will help you with the start-up and scale-up of your company, as well as developing and executing an efficient and affordable exit strategy whenever the time is right.
We are here to make things as uncomplicated as possible from the start, helping you navigate the local regulations and modus operandi to get your business up and running in no time.
We will help you with company incorporation, bank account opening, handling founders and shareholders agreements, GDPR assessment, protecting your valuable IP assets and putting in place an IP strategy, structuring your company in a tax efficient and drafting employment and consultancy agreements and dealing with all things immigration.
Next up, it is time to ramp up your business and reach for the stars. Again, this entire process can be challenging, but our team of specialists can lead you along the way, offering you support when it comes to raising funding, switching to larger offices, hiring new employees and retaining talent, or considering the possibility of merging with another company to scale up. Whatever you decide, Meridian Trust can help fuel your growth.
Sometimes an exit strategy is exactly what's needed. As part of this process, Meridian Trust will guide you step by step until the company finds its new family. From preparing the business for sale to setting up an initial public offering (IPO) to ensuring your personal protection once all is said and done, our team of tech-savvy lawyers will make this journey as smooth as possible. You'll be left with plenty of time to reminisce on your company's heydays.
Let's talk! Fill in the form below and schedule your 30 minute free consultation with one of our corporate lawyers, to discuss any questions about setting up a technology or software company in Cyprus.