Cyprus has strategically established itself as an attractive jurisdiction, both within the EU and globally. The competitive, modern, and transparent legal, financial and regulatory framework along with the highly skilled and multilingual workforce that Cyprus possesses has established Cyprus as a credible and highly reputable financial center. The country’s stable and advantageous tax policy has made Cyprus attractive for all types of businesses and individuals.
As Cyprus is a European Union member, all companies will enjoy all the advantages of operating in an E.U. country.
Quality of life
When considering where to launch a business or move your family, it is vital to consider the quality of life that Cyprus has to offer. Cyprus is also centrally located between 3 continents (Asia, Europe, Africa) making it easy for international clients to commute back home or for business purposes
Choosing Cyprus ensures clients visiting or moving to Cyprus are able to enjoy a Mediterranean island that provides a very safe and high standard of living that includes:
- One of the EU’s best all-year climates and one of the best worldwide
- Over 65 Blue Flag status beaches for all tastes (highest % per capita) sports, entertainment, etc
- High level public & private healthcare services
- Short distances – can travel from one side of the island to another in 2 ½ hours
- One of the world’s safest countries with one of the lowest crime rates in E.U.
- Reasonable cost of living
- Real Estate available to cater to all needs – city center, beach, countryside, etc
- High Level of Education – many private schools and private institutions offering a high level of education in English
- Low corporate tax rate of 12,5% on profit, one of the lowest within the EU with the possibility to enjoy a much lower effective tax rate
- Simple, transparent and EU harmonized tax system following recommended OECD practices
- Anti-money laundering legislative framework which is in full compliance with EU and American standards
- No withholding tax on dividends, royalties, and interests paid to non-resident shareholders, whether corporate or individuals
- Tax exemption when a Cyprus company receives dividends from another Cyprus company
- Tax exemption on dividends received by a Company as a shareholder of other subsidiaries situated abroad
- Tax Exemption on any income arising from trading in securities such as shares, bonds, etc
- No withholding tax on royalties paid from Cyprus based companies in respect of intellectual property exploited outside of Cyprus
- 80% tax exemption on any qualifying profits generated by intellectual property owned by a company in Cyprus
- Group relief laws allowing for a Company to carry forward losses
- No Capital gains tax from the disposal of any immovable property held by a Cyprus Company outside of Cyprus or disposal of shares in a company situated outside Cyprus
- 20% capital gains tax on immovable property that is located in Cyprus, and on any gain from the sale of shares in companies that own, directly or indirectly, immovable property in Cyprus
- Extensive Tax Treaty network with more than 60 countries
- Cyprus holding companies can receive tax-free dividends from their EU subsidiaries in cases where the Parent-Subsidiary Directive applies, subject to any anti-avoidance provisions in the jurisdiction of the paying company. Interest and Royalties can also be free of withholding taxes through the application of the Interest and Royalties Directive.
- There is no general Controlled Foreign Corporation (CFC) legislation
- Losses can be offset against other sources of income and can be carried forward for five years
- Losses of a company can be set off against profits of another company of the same Group
- Being considered non-domiciled in Cyprus for a maximum of 17 years once they relocate to Cyprus
- No Special Defence Contribution Tax for non-domicile individuals who become tax residents
- Tax exemption on dividends and interests earned by non-domicile individuals
- The first €19,500 of taxable income is tax-exempt
- No Capital Gains Tax on the sale of immovable property located outside Cyprus
- No Wealth-tax for High Net Worth Individuals
- Taxes withheld abroad can be credited against corresponding Cyprus tax
- Income Tax: The first €19.500 is taxed at 0% and then progressively on a scale from 20-35% with the below exemptions applying to:a. 20% of the earnings from any employment exercised in Cyprus by an individual who was resident outside Cyprus before the commencement of his employment, or €8.543, whichever is the lower. This exemption applies for a period of five years.b. 50% of the earnings of non-resident individuals taking up employment in Cyprus and earning over €100.000 will be exempt from tax for 10 years.
The European Union has a well-developed and regulated banking sector, thus opening a bank account with a Cyprus bank will allow clients to have a swifter process when opening bank accounts in other E.U. nations.
Furthermore, with companies incorporated in Cyprus and abroad, we will be able to support and provide the opening of bank accounts in the United Kingdom, Germany, Belize, St. Lucia, Lichtenstein, Austria, Switzerland, and Cyprus, etc.
- Bank transfers or payments from any E.U. bank account can be transferred to any other country in the world without any restrictions or limitations.
- A Cyprus and international company will be able to trade and open a bank account in various currencies as there are no exchange control limitations.
- European Union directives are fully transposed into Cyprus legislation and E.U. regulations have direct effect and full application in Cyprus.
European Union Member
At the core of the E.U. is the single market – the programme of freeing up the trade of goods and services and the movement of people between EU countries.
The aim of the E.U. is that doing business with other EU countries is like doing business within your own country. Cyprus has access to 40 + EU trade agreements with countries outside the E.U along with full access to European Markets with free movement of goods, services, the capital.
Brexit and the British Connection
With English being a predominant language spoken between businesses, when setting up your business you can benefit from the island’s high percentage of English-speaking citizens:
- 73% of Cypriots speak English – official language due to British Colonization
- English widely accepted for business transactions, government services, contracts, banking, and other day-to-day functions you’ll be undertaking
- UK-Cyprus trade relations existed before the E.U. and will continue strongly after Brexit as Cyprus belongs to the Commonwealth and has sovereign British Bases on the island
- Cyprus being an ex-British colony, the judicial and legal system is very much aligned with that of the United Kingdom.
- Key legislation such the Companies law, Contract law, and Tort law are modeled on the British legal system
- Cyprus courts follow the precedents of the English courts
Choosing Cyprus to set up your Company reduces your overall set-up costs compared to other EU countries:
- Lower labor costs than other E.U. countries
- Lower office rentals costs than most E.U. countries, thus making setting up fees lower than other E.U. countries
- Highly skilled support services such as legal and accounting services at lower costs than other E.U. countries