Two More for the €uro

As I write this on New Year's Day, the value of one euro [€] compared to the U.S. dollar is US$1.46007, meaning the dollar is comparatively only worth abiut US$69 cents, far less than the European Union's official currency.

Small wonder that there were celebrations in both the Republic of Cyprus and in Malta today, as the euro became the official currency of two more EU member nations. That now makes a total of 15 nations using the euro, including Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal, Slovenia and Finland.

The euro rose more than 11% against the dollar during 2007, and nine East European countries are planning to convert to the euro.

The adoption of the euro by Cyprus and Malta went smoothly, as citizens lined up at banks to exchange pounds and lira for the new currency without many problems. The small Mediterranean islands, both former British colonies, scrapped the Cyprus pound and Maltese lira at midnight, converting to the currency that has increasing clout over the slumping U.S. dollar.

Both countries welcomed the euro with outdoor celebrations, including a fireworks display in Valletta. The Maltese prime minister, Lawrence Gonzi, said joining the euro zone made Malta more attractive for investors. "The risk of currency fluctuation disappears completely, so an investor now knows that he is investing in an economy which is strong that has the potential for growth and where the risk and the costs have disappeared completely," Gonzi said. "We're sorry to say good-bye to our pound, but happy to welcome the euro," the president of Cyprus, Tassos Papadopoulos, said moments after midnight.

Cyprus - Lowest Tax in Europe

Once part of the Byzantine Empire, Cyprus was, until recently, a great place to make things disappear. This nation has long been a way station for international rogues and scoundrels, where officials have traditionally been willing to look the other way. Just 150 miles from Beirut, closer to the Middle East than to Europe, Cyprus has been a mecca for cigarette smuggling, money laundering, arms trading, and such. The site of secret meetings between Israelis and Palestinians, it has also been a refuge and way station for the Russian mafia transporting wealth of immense size and dubious provenance.

Cyprus is also a popular low tax haven for international public and trading companies, which can find significant advantages in the double taxation treaties network available to offshore companies. It is otherwise expensive and subject to significant disclosure requirements.

The offshore regime in Cyprus has changed as part of the island’'s accession to the EU, which occurred in 2004, and as a result of agreements with the Organization for Economic Cooperation and Development (OECD). The island now has a uniform 10% corporate tax rate, to apply to both onshore and offshore companies.

The 10% corporate tax gives Cyprus the lowest rate in the EU, after Ireland (12.5%), with the exception of the Isle of Man, Jersey and Guernsey, all of which now have a zero corporate tax rate.

Malta

Malta is an ancient nation, but one with a thoroughly modern outlook. In recent years, the Maltese government has actively courted foreign capital with an attractive program of incentives aimed at investors and entrepreneurs. It includes generous tax incentives and inducements such as soft loans, training grants, and customized facilities at subsidized costs. This pro-business policy seeks to build on Malta’s many existing strengths: favorable trade relations with countries around the world; a strategic location on world shipping lanes; a high quality, productive, English-speaking workforce; an excellent climate and quality of life; and modern health care and educational systems.

The Maltese government has enacted legislation to increase the islands’ role as a leader in international finance services. These provide a variety of tax and financial incentives to banks, insurance companies, fund management firms, trading companies, trusts, and investment companies. These laws have been amended to confirm to the anti-tax haven requirements of the EU that Malta joined in 2004.

These sunny Mediterranean islands cater to expatriates looking for a second or retirement home. There are no property taxes and permanent residents pay a 15% income tax on offshore income remitted to the country. Malta has three types of taxes: income, corporate, and estate taxes; the latter applies only to property located on the island. Income tax rates for foreign residents range from 2% to -30%. A permanent resident is not taxed on capital gains paid from offshore unless the person also is domiciled in Malta.

If you want to know more about Cyrpus, Malta and a host of other nations suitable for tax-advantaged location of your personal residence or corporate business, you can read all about them in The Passport Book which I have authored, now in its sixth edition. Click here http://web-purchases.com/190SGOPS/W190H721/