Whether it be its strategic location, the favorable tax system, the sophisticated infrastructure, or the highly-educated workforce, Cyprus has a great deal to offer for businesses. Find out more through this article!
Cyprus In Brief
Location: Cyprus is situated in the corner of the eastern Mediterranean Sea at the crossroads of three continents – Europe, Asia, and Africa. It covers an area of 9251 sq. km and has a pleasant Mediterranean climate.
Population: The population of Cyprus is approximately 1,191,752 according to the latest 2018 United Nations estimates.
Language: Greek and English are the official languages. English is spoken by most of the population and is widely used in commercial and governmental sectors.
Political Structure: Cyprus became an independent republic in 1960.
Accession to the European Union: Cyprus became a full member of the European Union on 1st May 2004.
Economy and Infrastructure: The island has excellent telecommunications, air and port connections. There are two international airports in Larnaca and Paphos, whereas the major port facilities are those of Limassol and Larnaca. Excellent banking facilities are also available with a number of onshore banks, offshore banking units and specialised financial institutions operating on the island.
Fiscal Advantages: Under the current tax legislation, Cyprus has one of the lowest tax regimes in Europe and its role as an international financial center is greatly enhanced. Cyprus clearly stands as a prestigious tax-incentive EU country and is free from suspicions usually associated with “tax havens” which have zero tax.
Legal System: The Cyprus legal system is fundamentally based on English Law and practice which Cyprus inherited from the UK as a result of the British Colonial rule of Cyprus through to 1960.
Currency: Since 1st January 2008, the Republic of Cyprus as a member of the European Monetary Union, introduced the Euro as its official currency, replacing the Cyprus Pound (£1CYP = 0.575284 EURO).
Company Registration In Cyprus
Cyprus is a long-established reputable International Financial Centre, having one of the lowest tax rates (12,5%) in the EU.
Tax costs play a significant role in investment decisions. Investors aim in maximising after-tax return on investments; therefore investment structures which have the least tax leakage are preferred by investors and are recommended by advisors.
As such, a Cypriot company can be utilised in structures exploiting local tax legislation and can collect income which is taxed at lower rates. Withholding tax is eliminated or reduced under double tax treaties or under EU directives. The income can then be repatriated in any form the investor wishes without withholding tax.
A Cypriot company is suitable for both EU inbound and outbound investments. There are no investment activities which are inappropriate for the Cypriot tax environment. However, there are investment activities which are indeed ideally suited to the Cypriot tax environment such as:
- Holding Company
- Trading Company
- Securities Trading Company
- Foreign Permanent Establishment
- Finance Company
- Employment Company
- Royalty Company
- Real Estate Company
- Strategic Location
- Member of the EU
- Member of the Eurozone
- Efficient and Comprehensive Tax System
- Corporate Tax Incentives
- Personal Tax Incentives for newcomer Executives
- Business Friendly
- Human Talent
- Quality of Life
- Value for Money Services
- Robust Legal and Regulatory Framework
Great Quality Of Life:
- Security and safety
- Excellent Educational Institutions
- High quality tourist & leisure facilities all year round
- Millennia of culture, history and art
- Fabulous weather
- World renowned hospitality
- Quality of air and sea
Cyprus is a member of the European Community, a member of the United Nations, the Commonwealth, the World Bank, and the International Monetary Fund.
Double Tax Treaties
The list of countries with which Cyprus maintains Double Tax Treaties (DTTs) currently stands at over 60 which is a significant number for such a small island as Cyprus. The tax treaties are a legal and very useful tax-planning instrument that actually protects legal persons and individuals against the double taxation of income earned in other countries. Thus, international businesses operate with stability and minimize uncertainty.
As evident, there are plenty of advantages associated with doing business in Cyprus! But navigating the complex regulatory environment can be challenging without any expert on board.