CYPRUS

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Cyprus, officially the Republic of Cyprus, is the third largest island in the Mediterranean with an area of 9.251 sq. kms, with population less than 1 million and history among the oldest in the world. The capital city of Cyprus is Nicosia. Nicosia is the only divided capital in the world.

Cyprus has a strategic geographical position in the Eastern Mediterranean as it is at the crossroads of three continental zones acting as a vital gateway to Europe, the Middle East, Africa and Asia. The strategic location of Cyprus, its favourable tax environment, educated work force, excellent telecommunications and modern banking and legal infrastructure make the country an ideal business bridge for the European Union and the Middle East.

Cyprus is an established member of the EU since 2004, is a respected international jurisdiction for business.

Cyprus has more than 30 years’ experience as an international business hub, distinguished by the development of a wide range of sophisticated legal, professional and financial services. Cyprus has a multilingual and highly educated workforce. In 2014, international financial services employed 12,800 people, with over 2,500 licenced lawyers who are members of the Cyprus Bar association actively practicing in Cyprus, and over 4,000 certified accountants and auditors.

WHY CYPRUS

  • International business hub with more than 30 years’ experience, with excellent infrastructure.
  • Multilingual, diversified and highly skilled workforce.
  • Competitive tax regime based on international standanrds and an extensive double tax treaties network.
  • 12,5% Corporate tax rate. One of the lowest in the EU.
  • No witholding tax on dividends.
  • Solid legal system, in line with EU and International Legislation.
  • Transparent regulated banking system governed by practices aligned with the comprehensive EU legislative framework.

CYPRUS LEGAL FRAMEWORK

This legal system is in line with EU legislation which consists of EU Directives and Regulations. Cyprus also possesses close ties to the United Kingdom and is therefore aligned to the UK legal structure and legislation.

Cyprus is a member of the  World Trade Organisation (WTO), Organisation for Security and Cooperation in Europe (OSCE), the Commonwealth, the Council of Europe (CoE), the United Nations (UN) and its specialised agencies, the World Bank, the International Monetary Fund (IMF) and several other conventions worldwide.

CYPRUS BANKING SYSTEM

Cyprus offers a transparent regulated banking system governed by practices aligned with the comprehensive EU legislative framework.

Following the agreement and signature of the Memorandum of Understanding (MoU) between Cyprus with the international lenders, the Cyprus banking sector has succesfully been restructured and recapitalised; and well exceeds the minimum capital adequacy ratios.

FINANCIAL REPORTING FRAMEWORK FOR CYPRUS ENTITIES

Cyprus Generally Accepted Accounting Principles (GAAP) form part of the International Financial Reporting Standards (IFRS) as adopted by the EU, which positively affects the procedure for formation of companies in Cyprus.

CYPRUS TAX REGIME

Cyprus has one of the most competitive tax regimes that is fully aligned with EU and international regulations. In addition, the tax system in Cyprus attributes its worldwide recognition to its large network of double tax treaties with a total of over 53 countries. Cyprus is in OECD’s White List of juristictions. Furthermore Cyprus’s association to the OECD guarantees its adherence to the internationally agreed tax standards.

Furthermore, significant benefits exist for IP, royalties, dividends and interests and many more, all of which allow foreign investors to gain a competitive advantage on their overseas ventures.

Corporation tax
Cyprus corporation tax is calculated at a flat rate of 12.5%, one of the lowest in the EU.

Value Added Tax (VAT)
Cyprus also has the lowest permissible EU VAT rate (19%).

Tax on Dividends and Interest received
Defence tax on dividends received – Dividends received in Cyprus are taxed at 20%. Foreign sourced dividends are exempt from tax under easily met condition.
No withholding tax on dividends or payments from Cyprus.
Defence tax on Interest received – Interest received by a Cyprus company is subject to defence tax at rate 30%.

Capital Gains Tax
No tax on gains from disposal of shares, bonds and other financial instruments; Capital gains tax is charged at 20%.

Intellectual Property tax
Cyprus offerd one of the most attractive Intellectual Property tax regimes in Europe. No withholding taxes on royalty payments for IPs utilized out of Cyprus; and beneficial 80% notional deduction on qualified IP income.