Why Ciprus?


Cyprus Facts Matter

  1. 1. Geography and demographics

Strategic location

Cyprus is located in the crossroad of three continents. It is natural trading and international business hub linking busy trade routes of Europe with the Middle East, Russia, Central Asia and the Far East.

Small yet efficient

The population counts for approximately 1189 000, mainly spread between three major cities: Lefkosia, the capital approximately 336 000, Limassol, the major port 241 000, Larnaca and Pafos, the major airport facilities of the island.

  1. 2. Political: Stable and democratic

Cyprus is Presidential Democratic State. The legislative authority of the Island is exercised by the House of Representatives and the administration of Justice is exercised by a separate and independent Judiciary. The Government is endorsing Foreign Direct Investment as a national economic development policy.

  1. 3. Legal system: Internationally effective
  • Legal system is based on United Kingdom principles of common law and equity.
  1. 4. Infrastructure: Supporting the dynamic needs of business people
  • Modern road network, exclusive port facilities, two new international airports and telecommunication hub.
  1. 5. Education: Pool of talents with high quality education
  • 47,8% of Cypriots in the 30-34 age group have acquired higher education higher than the EU28 average of 36.8%, and one of the highest in the world.
  1. 6. History: Rich in history of all times
  • From Ancient History (8200-326 B.C.), Hellenistic Period (325-30 B.C.), Roman rule (30 B.C.-336 A.D.), Byzantine Era (330-1191 A.D.), Frankish Period (1192-1489), Venetian Rule (1489-1571), Ottoman Rule (1571-1878), British Rule (1878-1960) to The Liberation Movement (1960) and independency with Archbishop Makarios being the first President.
  1. 7. International relations: European member state with strong international presence
  • 40 diplomatic missions worldwide
  • Member of: European Union (2004) and Eurozone (2008); The World Trade Organization (1995); The International Monetary Fund (IMF) (1962); The World Bank (1962); The Commonwealth (1961); The Council of Europe (1961); The United Nations (1960).
  1. 8. Business environment: The growth sectors reaching higher skies

Cyprus Shipping:

  • 10th largest merchant fleet in the world.
  • 3rd largest merchant fleet in the EU.
  • 2nd largest Ship Management Centre in the world.
  • Largest third party Ship Management Centre in the EU.
  • Excellent tax Benefits under Tonnage Tax System.

Energy:

  • The implementation of development programmes related to the use of energy conservation, technologies, the utilization of ingenious RES and the protection of the environment from industrial pollution.
  • The promotion of oil products and other sources of environmentally-friendly energy.

Investment Funds:

  • Cyprus is evolving as a favorable investment funds jurisdiction, providing solutions for Alternative Investment Funds and UCITS and fund managers.
  • Legislation for transposition of the Undertakings for Collective Investment in Transferable Securities (UCITS) IV Directive in 2012 and the Alternative Investment Funds Managers Directive (AIFMD) in 2013.
  • European passport to the fund management industry and cross-border and global fund distribution.
  • More than 50% of recognized International Collective Investment Schemes and growing interest in the establishment of both UCITS Management Companies and UCITS funds.

Banking and financial services:

  • Favorable for financial products and services such as fund registration, administration and management.
  • Excusive opportunities for cross-border and international transactions of private as well as public investment funds through reliable infrastructure and low costs.

Professional services:

  • More than 3,699 active registered accountants.
  • Top international accounting firms.
  • Follows the International Financial Reporting Standards (IFRS).

Information & Communication Technology:

  • ICT Ecosystms.
  • Large number of highly skillful human resources.
  • EU Research Fund supportive framework.

Research and Development:

  • Strategic & Multi-thematic Research and Development.
  • Growth of National Scientific & Research Human Capital.
  • Applied Research Development and Enterprise Innovation.
  • Research Infrastructure Development and Large Scale Investments.
  1. 9. Investor incentives: Benefits which only Cyprus can offer

Corporate tax

Uniform tax rate of 12.5%, one of the lowest corporate tax rate in the European Union. Tax exemptions:

  • in respect of dividends received from other companies.
  • in respect of interest income under special conditions.
  • on profits earned from permanent establishments abroad (upon conditions).
  • on capital gains derived from the disposal of securities.
  • on profits from company reorganisations.
  • on Foreign Exchange gains or losses.
  • tax relief of foreign tax paid.
  • favourable tax treatment of losses.

Personal Tax

The lowest top statutory personal income tax rate at 35% (Eurostat).

Tax exemptions:

  • in respect of dividends (subject to certain conditions).
  • no tax on interest income (subject to certain conditions).
  • on profits earned from permanent establishments abroad (subject to certain conditions).
  • on capital gains derived from the disposal of securities.
  • on remuneration by services rendered abroad.
  • on specific type of income such as compensation for injuries, provident fund, pension fund or other approved funds.
  • no payment of Special Contribution for Defense on Income for non-domiciled individuals.
  • favourable tax treatment of losses.

Double Taxation Treaties. Please see the link below: http://www.mof.gov.cy/mof/mof.nsf/page26_en/page26_en?OpenDocument

International Trusts

  • Income and gains of a Cyprus International Trust, derived from sources outside Cyprus are exempt from any tax imposed in Cyprus (subject to certain conditions).
  • Dividends, interest or other income received by a Trust from a Cyprus international business company are neither subject to tax nor to withholding tax.
  • No capital gains tax is charged on the disposal of assets of an International Trust.
  • Exemption from taxation in the case of an alien who creates an International Trust in Cyprus and retires in Cyprus (subject to certain conditions).

Value Added Tax

  • Cyprus has the lowest rate permitted in the EU standard VAT rate of 19%.

Intellectual Property (IP): Tax benefits of Cypriot IP companies:

  • 80% income tax exemption on worldwide royalty income (net of direct expenses) generated from IP.
  • 80% income tax exemption of profits generated upon disposal of IP (net of direct expenses).
  • No recapture system for previously generated losses.
  • Gross IP income reduced by expenses incurred for the production of such income.
  • Competitive amortization provisions over a 5 – year period.