About Cyprus
Cyprus has more than 3000 thousand years of history and culture and many of the island’s treasures are on the revered UNESCO Word Heritage List. The country is one of the most beautiful islands of Eastern Europe, offering sunny beaches and is a great place for a family to reside mainly due to the genuine local hospitality, low crime figures and high quality of life.
Cyprus is a well-established business location known for its neutral tax regime, investor friendly business culture, highly educated work force, solid banking system and legal system.
The Cyprus Republic is a state member of the European Union since 2004 which offers the country a great prospective in all aspects of quality of living, stable health care system, internationally recognised education system and a liberal economy. Cyprus population is counted in 2017 to be 847.000. The vast majority of residence are Greek Orthodox (78%) and around 18% of Muslim.
Some of the reasons organizations and entrepreneurs choose Cyprus.
- People in Cyprus are amongst the most educated individuals in the world, specializing in accounting, legal and other business professions with studies in well-known Universities in UK and the US.
- The Cyprus legal system is fundamentally based on the English legal system, which is one of the most efficient and reliable legal systems in the world. The legal system has some minor influences from the continental European legal system but its foundation is based on the Anglo-Saxon judicial system.
- The Cyprus Company Registrar is based on the UK’s Companies House system, its legal aspects and is fully computerised.
- Cyprus Companies are obliged to fully implement and follow the International Financial Reporting Standards of Accounting in accordance with all the provisions of International Accounting Standards Board.
- The country is a member of the United Nations and Organisation for Economic Cooperation and Development. It fully adopts the UN charts as well uses OECD recommendations for economic governance and development.
- Furthermore, the Cyprus banking system is also based on the Anglo – Saxon system where its foundations are based on the colonial era of 1887 to 1960. The period in which Cyprus was a British Colony. Nowadays, Cyprus banks follow the world banking standards and are monitored by the European Central Bank.
Cyprus’ unique geographical location positions itself at the entry point of three continents, Europe, Africa and Asia and plays a vital role in the Eastern Mediterranean region. The island is an ideal investment gateway to the European Union, a portal for investment outside the EU, particularly the Middle East, India and China.
- One of the lowest corporate income tax rates in the EU at 12.5%
- Dividend participation exemption
- Exemption on disposal of securities (e.g. shares, bonds, debentures)
- No withholding taxes on dividend, interest and royalty payments abroad
- No capital gains tax (except for disposal of real estate in Cyprus or shares of company holding real estate in Cyprus to the extent gains are attributable to the real estate holding)
- No succession taxes
- Attractive IP regime
- Tonnage tax for shipping companies
- National interest deduction for investments into Cyprus companies
- Personal tax exemptions for new residents and non-domiciled individuals
- More than 60 double tax treaties
Cyprus’ comprehensive and robust legal and regulatory framework is based on the English Common Law principles. The Cyprus legal system is recognised as business-friendly, very effective and ensures transparency and reliability in business practices. Cyprus offers foreign businesses a familiar and reliable framework within which to operate. The Cyprus legal system is also fully compliant with the EU, the Financial Action Task Force on Money Laundering (FATF), OECD, FATCA, the Financial Stability Forum laws and regulations and EU AML directives.
The high level of skilled human talent constitutes one of Cyprus most compelling advantages, complemented by a broad range of high quality professional services. As a dynamic business center, Cyprus offers an abundance of highly educated and skilled individuals, multilingual and ready to serve the needs of any business. Cyprus ranks amongst the top countries in Europe for tertiary education per capita.
Cyprus offers a sophisticated road; air and sea transport solutions and services, which are widely recognised as an important competitive advantage in attracting foreign direct investment. Cyprus has two multi-purpose deep-sea ports and are located in the coastal cities of Limassol and Larnaca. The Limassol port handles both passenger and freight cargo while offering logistic solutions through advanced facilities for cost-effective transport and processing. In addition, the Limassol port is a renowned cruise liner hub and a popular “stop-over” for international cruise ships. Cyprus has two modern international airports in Larnaca and Paphos, which offer services to approximately 10 million visitors per year, connecting the island to the most popular transit hubs throughout the world. Considerable investment has also been made to transform the island into a major telecommunications hub in the region, connecting Cyprus via submarine fiber optic cable and satellite to other networks in the Eastern Mediterranean basin and beyond.
Cyprus offers a very high quality lifestyle with high living standards in a safe, clean and healthy environment.
The government’s commitment to the continuous introduction of progressive measures for reform and growth has resulted in the impressive recovery of the Cypriot economy much earlier than expected. Cyprus constitutes today a success story for the EU, a fact enhanced by continuous upgrades from credit rating agencies such as Standard & Poor’s, Fitch and Moody’s. Cyprus’ key economic sectors are constantly being developed and improved including introducing structural changes and important reductions in expenses and operational costs. This evolvement has been instrumental in Cyprus regaining its credibility and reinforced its competitiveness as an attractive investment destination offering numerous opportunities and potential.
Cyprus Growth Sectors
Cyprus is one of the largest and widely known shipping centres in the world, accommodating both ship owning and ship management companies. Many ship management companies operating on the island, rank amongst the largest of their kind in the world and it is estimated that they manage about 20% of the world’s third party managed fleet.
Cyprus Shipping Center is the home to some leading names in the global shipping industry, such as the Italian MSC Mediterranean Shipping Company, the German-owned Bernhard Schulte Ship management and the Russian Unicom Management Services.
The Register of Cyprus Ships ranks amongst the top registries in the world with a merchant fleet exceeding 23 million gross tonnage and 3rd in the European Union with a percentage of about 11% of the total fleet of the European Union member states.
Cyprus maintains a wide range of competitive advantages through a high-quality maritime cluster, offering efficient, quality services and benefits including:
The latest EU-approved Tonnage Tax System (TTS) with no direct link to corporate tax
Competitive ship registration costs and fees
No crew/officer nationality restrictions
28 Merchant Shipping Bilateral Agreements
Signatory to all international maritime conventions on safety, security and pollution prevention
Full protection for financiers and mortgagees
White List of Paris and Tokyo MoUs
The ship owner companies and management companies are taxed according to the net tonnage of the ship and not on the basis of the local corporate tax (12.5%)
The tax obligations of the company are controlled by the Department of merchant shipping and not the Tax registrar
Ensures the total exemption of the profits from the corporate tax and the tax arising from the sharing of the profits (dividends)
Allows the operation of a variety of activities to a company/group of companies, as well as the taxation of the shipping activities on the tonnage tax law and any further activities based on the corporate tax at 12.5%
Provides the transparency of the registered corporations and vessels list
Learn more about Cyprus Merchant Shipping
Tourism has traditionally been a major source of income and a driver of economic growth in Cyprus, with a significant contribution to the country’s GDP. Being one of Cyprus’ most resilient and strong economic sectors, tourism continuously experiences substantial growth, translated into a number of more than 2.5m tourists visiting Cyprus every year.
Cyprus is well known for the hospitality of its people, the delicious Mediterranean gastronomy, its rich history and culture, and extraordinary natural beauty. With its golden sandy beaches and clear blue waters, as well as its pleasant Mediterranean climate with almost year-round sunshine, Cyprus has been a popular tourist destination for decades. The island’s famous beaches have been awarded with 57 Blue Flags in 2015, ranking the island first in the EU for the tenth consecutive year, including three records:
- most Blue Flags per capita in the world
- most dense concentration of Blue Flag Beaches
- most Blue Flag beaches per coastline
Cyprus tourism industry has gained several prestigious awards, including the Sustainable Destinations Global Top 100, VISION on Sustainable Tourism and Totem Tourism and Green Destination titles presented to Limassol and Paphos in 2014. But there is much more to Cyprus than just sun and sea. Cosmopolitan and culturally rich, Cyprus offers a variety of tourism options that cater to all tastes and desires, whether it be sports, historical and cultural attractions, luxury resorts, wine routes, nature trails and agrotourism. The island has all the prerequisites to further develop this industry and offers great potential for investments in niche areas such as Health & Wellness, Sports, Luxury and Lifestyle. In the last decade new projects completions include golf courts, sea front resorts and spa and since last year, casino resorts are now licensed and operating for the first time in Cyprus.
“One of Cyprus’ most resilient and strong economic sectors with a significant contribution to the country’s GDP.”
The Deputy Ministry of Tourism has been focusing lately to rebrand Cyprus Touristic product and developing upgrades to all sectors involved. Cyprus attracts besides traditional tourism, attracts athletic tourism, business visitors, Food and beverage professionals, wine enthusiasts and many more. Incentives and funds are given to professionals in an effort to upgrade the product.
Acquiring property in Cyprus, either as an investment or as home, has always been a popular choice among foreign investors. A combination of high quality of lifestyle, year-round sunshine and natural beauty, ease of doing business and investment incentives, low criminality, are some of the reasons investors choose to reside in the island.
Property sales have increased significantly in 2016, with the construction industry intensifying its activities island-wide. Cyprus continues to offer unique options for beautiful holiday homes and represents a popular destination for permanent residency and retirement.
At the same time, a wide range of prestigious Large-Scale Development opportunities are available, ranging from residential and commercial developments, to luxury tourist attractions, such as marinas, golf courses, tourist resorts.
Real estate is a sector that currently attracts most of the investors in Cyprus and one reason is the Cyprus Investment program. The program allows investors and families to relocate by investing not only in real estate but also on local companies and start-ups.
The discovery of hydrocarbons in Cyprus’ Exclusive Economic Zone (EEZ) has created new and exciting prospects for Cyprus to become an energy hub in the Eastern Mediterranean. Prospects in the energy sector are all the more promising thanks to the island’s geostrategic location, connecting Europe and the Black Sea with markets in the Middle East and Asia and its role as a pole of stability and security in the region of the Eastern Mediterranean.
Recent developments have attracted worldwide interest and significant investments from leading international energy giants, such as Noble Energy, Delek, Total, ENI and KOGAS, ExxonMobil as well as renowned international providers operating in the oil and gas auxiliary services sector. Comprehensive strategies are being developed to exploit the country’s wealth not only for local needs, but also for export purposes.
- Ideal regional base for serving Eastern Mediterranean region A rising fuel hub
- World-class natural gas discoveries
- Ε&P contracts granted to ExxonMobil, Shell, Total, ENI, Noble Energy, Delek, KOGAS and Qatar Petroleum
- Multi-billion infrastructure projects: EASTMED Pipeline and EusoAsia Interconnector
- New opportunities in the renewable energy utilization
- Regional cooperation and synergies for gas exploitation and export
Creating value through ideas and having the potential of becoming a key driver of economic growth, the development of the Start-Ups sector is deemed of great importance for Cyprus. In this direction, significant incentives have been introduced by the Cyprus government in order to boost innovation and entrepreneurship, such as the approval of a package of tax incentives of investment into start-ups, as well as the introduction of the Start-up Visa for third country nationals.
Also, the Intellectual Property Box allows such companies to reduce tax expenses and investment cost under a special tax treatment. The Cyprus IP Box is in compliance with various international agreements and treaties, protecting companies that own Intellectual Property rights. Some advantages that make Cyprus a great place for start-ups and tech companies.
- Access to talents in Europe but also locally. Cyprus’s workforce with tertiary degree is one of the highest in Europe. In addition under the Startup-visa scheme, professionals from third countries can also relocate.
- English language is widely spoken in the whole country. Other languages besides Greek, is Russian, Arabic, Turkish and French.
- Low business costs to launch and low running costs. Labor costs and office space costs can be kept low in Cyprus, allowing companies to invest more funds on research and development.
- Low tax regime for corporations and individuals.
- Wide range and high quality of business service providers.
- Access to local and European funds, grands and incentives programs.
