An attractive international base for a wide range of businesses.
Cyprus is an island situated in the eastern Mediterranean, at the crossroads of Europe, Asia and Africa. Cyprus is part of the EU since 1 May 2004 and part of the EMU (Eurozone) since 1 January 2008. It has a solid banking sector as well as business oriented highly skilled professionals. The commercial banks of Cyprus have strong international connections and provide global banking services.
Cyprus has excellent climatic conditions. There is also political and economic stability. There is a high standard of telecommunication services as well as frequent air connections to and from the island. Cyprus offers a wonderful environment with a very high standard of living. Living and working in Cyprus is combined with fabulous weather, beautiful nature, art and culture, safety, security, and above all, hospitable people. The legal system in Cyprus is based on English Law and English is widely spoken and used in official business and commerce.
Doing Business in Cyprus
Cyprus has established itself as a primary international business centre, with a growing number of international businesses choosing it for setting up branches, subsidiaries and holding companies. The existence of an increasing number of Double Tax Treaties with other countries, the favourable corporate tax system, the skilled, highly educated, experienced and flexible labour force, make Cyprus an attractive international base for a wide range of businesses.
Cyprus has a stable tax system regime. Cyprus companies are required to submit audited financial statements to income tax authorities and the Registrar of Companies using the International Financial Reporting Standards (IFRS) and International Standards on Auditing.
- Lowest corporate tax rate (12.5%) in the European Union
- Extensive network of Double Taxation Treaties
- Tax losses can be carried forward for five years and also Group loss relief applies for Cyprus companies subject to certain provisions
- Non-resident companies are taxed only on the income derived in Cyprus
- Dividends received from abroad are wholly exempt from income tax
- Withholding tax in respect of dividends, interest or royalties paid into Cyprus from other countries, can be minimized due to the wider applicability of treaties for the avoidance of double taxation
- There is no capital gain tax on profits made on the disposal of assets of a capital nature (except for immovable property situated in Cyprus)
- Capital gains tax is payable on the sale of immovable property in Cyprus and on the sale of shares in a company that owns immovable property in Cyprus
- No inheritance taxation.
- No taxes for the repatriation of profits from Cyprus companies to non-residents
- Non Cyprus domicile individuals are exempted from special defence contribution on dividends, interest and rents.
- VAT rate for acquisition of residential property can be as low as 5%.
- Dividends paid to non-resident shareholders are not subject to any withholding taxes.
- There is no corporation tax on the income from buying and selling shares and other securities
- Individuals’ taxable income up to €19,500 is tax free, and the tax rate is scaled from 20% to 35%
- Remuneration from rendering services outside Cyprus to a non-resident employer or an overseas permanent establishment of a resident employer for more than 90 days in a tax year is fully except from tax in Cyprus
- 50% exemption on income from employment in Cyprus of a person who was not previously a tax resident in Cyprus. The exception applies for seventeen years from first year of employment, provided that the income from employment in Cyprus exceeds Euro 55,000 p.a. starting from year 2022 under certain conditions.
- 20% with maximum €8550 exemption on income from employment in Cyprus of a person who was not previously a tax resident in Cyprus. The exception applies for seven years, starting from 1st of January following the year of first employment, under certain conditions.
- Probably the most favourable holding company jurisdiction in Europe
- Lump sum received by way of retiring gratuity, commutation of pension, or compensation for death or injuries is not taxable
- Re-organizations, amalgamations, mergers and acquisitions of companies can be effected without any tax implications
- Advantageous tax system for pensioners (option for overseas pensions to be taxed at 5%) and expatriates