CYPRUS
HISTORIC CASTLE AND HARBOUR IN KYRENIA
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BRIGHT LISTED
Maria Jackson reports
WHEN Russia and Cyprus signed a new tax deal in October 2010, the agreement politi- cally cemented a deep-rooted partnership
that has existed since the 1990s. Although, yet to be
signed in to law, the treaty effectively takes Cyprus off a
Russian ‘black list’ of jurisdictions and blocks loopholes
in Russia’s attempts to tackle tax evaders.
‘The signing of the Protocol on Amendments to the
1998 Double Taxation Treaty (DTT), simply ratified a
long-lasting relationship between the countries and has
washed away any doubts,’ says Pavlos Aristodemou.
Managing partner of the Cypriot office of Harneys
Aristodemou Loizides Yiolitis (“Harneys”), Aristodemou
was was one of the three founding partners of legacy
firm Aristodemou Loizides Yiolitis, which merged with
Harney Westwood & Riegels in December 2009 to give
the leading offshore firm a Cyprus platform. ‘There has
been no dramatic noticeable effect, just a continuing
steady stream of work, which would have been impact-
ed if the changes weren’t effected.’
Cyprus investment accounts for $53.8bn, or around
20.5%, of the $262.6bn that has been invested in the
Russian economy since the fall of the Soviet Union in
1991, according to Russian statistics. The island houses
thousands of registered Russian companies, attracted by
its headline 10% corporate tax rate and its tax treaties
with around 50 countries, and those companies then
re-invest profits back into Russia. To illustrate the close-
ness of this relationship, Cyprus has about 60,000
Russian speakers in a population of less than 1 million.
Essentially, this means that Cyprus law firms are heavily
dependent on Russian clients for work, with top-flight
firms averaging a 70 – 80% Russian-generated case load
– in some of the larger firms it goes up to around 90%.
