Cyprus Overview
Cyprus offers many incentives for businesses and new establishments, with a wide array of international companies setting up their entities on the European island. While its prime location, good climate, culinary scene and hospitality industry are the most evident of reasons, there are many additional incentives for businesses and individuals.
Cyprus is an attractive location to establish business presence for a diverse number of industries, such as the creation of IP holdings, research and development companies, shipping, creative industries and consultancy services, to name a few. It offers special tax regimes, both for personal and legal entities, resulting in efficient tax rates, but also legal protection by EU member states.
The incentives that Cyprus’ regulatory and tax framework offers businesses are wide ranging. Here is a summary of the key highlights:
A flat corporate tax rate of 12.5%, which is considered one of the lowest Corporate Tax rates within the EU.
Cyprus has entered double tax treaties with over 65 countries worldwide. This is an extremely attractive factor, for multinationals and cross-border transactions.
Cyprus is an EU Member State.
The country offers very attractive Personal tax regimes, especially for Non-Cypriot tax residents taking up employment or tax residency in Cyprus
No tax on dividends payable to non-Cypriot tax residents or Cypriot Tax residents who are non-domiciled of Cyprus
No withholding tax on interest payable to non-Cypriot tax residents
No tax on dividend income (some exemptions apply)
Capital gains from the disposal of securities, such as shares, bonds etc. are fully exempt from taxation in Cyprus, unless the shares being sold are linked to an immovable property situated in Cyprus.
Tax credits for tax payments suffered abroad (double tax relief)
Notional interest Deduction on new capital invested in Cyprus tax resident Companies and PE’s.
The Cyprus IP regime which allows up to an 80% deemed deduction on qualifying profits from the exploitation of qualifying intangible assets. With a corporate tax rate of 12.5%, this can result in an effective tax rate of as low as 2.5%.
Excellent infrastructure
Excellent communications
Availability of free zone
Highly educated work force
Profits from a permanent establishment maintained outside of Cyprus are exempt from taxation in Cyprus, subject to conditions.
The above is just a summary of the key highlights. Please contact us for professional advice at info@caccountingtax.com
