Cyprus is ideally suited for international business due to the numerous benefits it has to offer including the following:
- EU and European Monetary Union Member State.
- Strategic geographical location - island at the crossroad of three continents, ideal for expansion in Europe, Asia and Africa.
- Extensive network of Bilateral Investment Treaties, with approximately 30 countries.
- Broad range of quality financial and business services - legal, tax, accounting and investment.
- Highly educated, qualified and multilingual workforce.
- Low set up and operating costs.
- Efficient business environment, accompanied by simple administrative procedures.
- Advanced transport and telecommunications network.
- High standard of living.
All the above, coupled with the numerous tax advantages that Cyprus offers, make the island, the perfect place for investors and business people.
Key advantages of the Cyprus tax system include the following:
- A Corporate Income Tax rate of 12.5% and a standard VAT rate of 18% (19% from 13.1.2014).
- An extensive network of Double Tax Treaties, with 49 countries.
- Exemptions from tax:
- Dividend income received (subject to conditions).
- Profits of foreign branches of Cypriot companies (subject to conditions).
- Profits from the disposal of securities (including shares, bonds and debentures).
- No tax on capital gains from sale of property located outside Cyprus.
- Profits from the exploitation and/or disposal of intellectual property rights (80% exempt).
- No withholding tax on:
- Dividends paid to non-resident shareholders.
- Interest and most royalties paid from Cyprus.
- Cyprus implements internationally agreed tax standards - part of OECD’s “white list”.
- The Cyprus tax legislation and its regulation is stable and straight forward.
- Relations between the business community and the tax authorities are excellent and ensure the efficient taxation of the commercial and financial sector.
The recent financial crisis poses a challenge which Cyprus has the potential to overcome. The ingredients for a robust recovery are all present: a government committed to succeed, the business acumen of the private sector and the strong will of the Cypriot people.
With the backing of the IMF, the European Commission and the European Central Bank, Cyprus is already rebuilding the soundness of the Cyprus banking sector, controlling its public finances through cost cutting and supporting a sustainable and balanced growth.
For all of these reasons, Cyprus is equipped to remain as one of the best international financial centres.
Deloitte can assist with all aspects of conducting business in Cyprus. Our Tax team can advise on tax efficient structures and our Integrated Services team can assist with the on-going administration and management of your entity as well as payroll and bookkeeping services. In addition Deloitte can arrange for the formation of a Cyprus company, partnership or trust.