Subsequent to the developments in the world in the recent years, and especially in Cyprus and Latvia, all the banks in the said countries will refuse cooperation with offshore companies or companies, which do not have physical presence in the country of registration – the so called “shell” companies.
What it the definition of а “shell” company? Any offshore company, for example, registered in Belize, but not having a physical office in the country of registration (in this case in Belize), or employing fewer than two employees in the country of incorporation, and having no obligation to prepare and submit audited financial statements, will be considered a “shell” company. Moreover, in the presence of any of the above factors, companies registered in non-offshore jurisdictions, such as Cyprus, will also be considered “shell” companies, especially if they do not have a physical presence in the country of registration.
Furthermore, it was observed that some banks in various countries, including banks in Cyprus, developed a tendency to refuse conducting any business with companies that in some way have a history of cooperation with Latvian banks, or with business activities related to Latvia.
In continuation to the above, companies which have bank accounts with Cyprus banks, but will fail to satisfy the criteria of the Central Bank's regulations regarding “shell” companies, are at risk of losing existing bank accounts and, consequently, the ability to conduct their business in normal mode. Following similar trends, such companies, in order to be able to continue operating their business, will encounter much more difficulties to open a bank account elsewhere in the future.
Based on the assumption of experts it can be deduced that other minor EU countries will also follow the destiny of Latvia and Cyprus and would implement measures alike to those implemented in the said countries.
Taking into account the above, we offer you several existing and tried solutions that will help companies maintain their business and bank accounts – re-domiciliation (change of jurisdiction) and/or the establishment of physical presence of the company.
If your business has previously encountered any of the described issues or if you are concerned of possible difficulties in the future, and you are interested in the solutions we propose, please write us an email and we will be glad to assist you immediately and give an offer for one of the above proposals.