Relocation of Business in Cyprus
A lower corporate tax framework for Intellectual Property.
Save tax on revenues generated from licenses, royalties, patents, and the sale or transfer of qualifying intellectual property assets, as opposed to standard commercial revenues.
80% exemption on the qualified profit
0% tax on the gain from the disposal of IP assets
20 years amortization period
Reduce the tax exposure on your Intellectual Property company.
What is IP Box?
The IP Box Regime, also known as a patent box or innovation box is a corporate tax framework introduced by numerous countries to encourage research and development activities.
This is achieved by applying a lower tax rate to revenues generated from licenses, royalties, patents, and the sale or transfer of qualifying intellectual property assets, as opposed to standard commercial revenues.
Main Features of the Cyprus IP Box.
Cyprus IP Box Overview
The Cyprus IP Box Regime offers a maximum tax rate of 2.5% on income derived from IP assets. This rate is significantly lower compared to other countries that offer IP Box Scheme like Belgium (4.44%) or Luxembourg (5.2%) ,Netherlands (7%), France and United Kingdom (10%).
Unlike many other European IP Box schemes, which often restrict benefits to income from patents and supplementary patent certificates, the Cyprus IP Box Regime applies to a broader range of income.
In addition to these advantages, companies benefit from Cyprus’s strategic location within the EU and its double tax treaties with approximately 50 countries. This allows IP owners to leverage their rights across multiple jurisdictions.
80% exemption on the qualified profit generated from the exploitation of IP assets.
80% of the profit earned from the use of intangible assets is deducted for tax purposes. Consequently, only 20% of the IP income, after deducting the costs associated with earning that income, is considered for taxation. This results in an effective tax rate of 2.5% out of the standard corporate tax rate of 12.5% of Cyprus legislation.
0% tax on the gain from the disposal of IP assets when classified as capital nature transactions.
When the disposal of intangible assets is considered a capital nature transaction, the resulting capital gain is not taxable.
20 years amortization period
Capital expenditures for acquiring or developing IP can be deducted starting in the first tax year the expense occurs and in the following years. These expenses are amortized over a period of up to 20 years.
Qualifying Assets - QA (Intangible)
A Qualifying Asset is an asset acquired, developed, or utilized by a person in the course of their business that results from research and development (R&D) activities, and includes intangible assets for which only economic ownership is held.
Qualifying intangible assets include:
• Patents, as defined by the Patents Law
• Computer software
• Other legally protected IP assets that fall into the following categories:
- Utility models, IP assets providing protection to plants and genetic material, orphan drug designations and patent protection extensions.
- Assets that are non-obvious, useful, and novel, provided that the entity utilizing them does not generate annual gross revenues exceeding €7,500,000 from all intangible assets (€50,000,000 for a group of companies) and that these assets are certified by an appropriate authority, either in Cyprus or abroad.
The definition of intangible assets specifically excludes business names, brands, trademarks, image rights, and other intellectual property used for marketing products and services.
Qualifying Persons (QPs) or establishments
• Cypriot tax residents
• Tax resident permanent establishments (PEs) of non-tax residents
• PEs from foreign countries that have agreed to be subject to tax in Cyprus
How to Register and Benefit from the IP Regime
Establish a company in Cyprus. Registering a company under Cypriot law is generally straightforward and a fast prοcedure. This process can be completed remotely with the assistance of legal representation.
Transfer the ownership of the IP assets to the newly established Cyprus company, or create a new IP asset under the new company.
The Cyprus company can then license the rights to use the IP to other companies as needed.
Set up the patent box structure and prepare the necessary legal agreements to ensure compliance with the regime’s requirements.
Lean more about Cyprus company formation
The formation of Cyprus company procedure is fast and easy if you have the proper professional guidance. Start operating in a very short time under Cyprus regime and benefit from the significant tax advantages of Cyprus corporate tax. In this page you will find everything you need to know related to Cyprus company formation.
Register your company without visiting Cyprus.
- Get Cyprus Tax id number and benefit from the low-income tax
- Operate worldwide with your Cyprus Company
- Company bank account in 5 days
- Fast and easy process. No fuss. Sent us the paperwork and we do the rest.
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