Real Substance Service

The most important issue faced by companies all over the world is Substance.
Our team of professionals will guide and assist you through every step of the process in order to help you in the best possible way.

Why is economic substance important?

Since the introduction of BEPS (Based Erosion Profit Shifting) by OECD, companies must focus on substance and transparency in order to avoid a high(er) tax burden and to prevent serious tax-disputes arising with tax authorities.

What needs to be in pace to have economic substance?

Tax authorities focus on the following in determining if a company has economic substance:

1. Who is the decision maker?
2. Where the decision maker is based?
3. Does the company have a real office?
4. Does the company have registered employees?
5. Does the company have telephone line, email address and mail box?

How we can assist at PHS & Partners 

PHS & Partners provides virtual and physical office spaces in a professional business structure. We provide fully furnished and equipped workspaces with high quality furniture, communication infrastructure and facilities, to meet your company needs, specifically in relation to their physical presence in Cyprus.

PHS & Partners can provide you with a dedicated employee with basic decision-making responsibilities, acting on your company’s behalf and solidifying economic substance.

Why Virtual Office?

A virtual office is deal for small-sized international companies in order to fulfil the substance criteria with minimum cos. A virtual office has additional incentives such as complimentary use of a private office or conference area. The virtual office is set up in the PHS & Partners building area.

Why Physical Office?

A physical office, referred to as an executive suite, is an actual office that’s rented out by PHS & Partners in a different building area. A physical office offers the same advantages of having your own office space, without the fees associated with renting traditional office space. A physical office space is the right choice if you want to meet clients, have access to conference rooms with state-of-the-art technology and have a flexible lease with no long-term contract.

The Benefits

While both forms of office environments have their own unique benefits, the common benefits of both are:

1. Fully comply with the substance and transparency action introduced by OECD and BEP.
2. Fully comply with Article 5 of the OECD Model Treaty; and
3. Fully comply with Cyprus Income Tax Law of 2022 No. 118(I) as amended
4. Reduce overheads since you are leasing the office executive suite or virtual office services
5. You do not need to invest in property
6. You do not need to pay a deposit for renting an office and sign a rental agreement
7. You can cancel the lease at any time provided that 30 days’ notice is given
8. You have most of office facilities available other than your own computer
9. You just sign a Management Contract between PHS & Partners and your company