Starting a business in Cyprus with the formation of a company is a smart choice entrepreneurs from all around the world do. Cyprus as a full EU member uses Euro for currency and has the lowest corporate tax rate on the EU (1,5%). The local tax legislation along with the simplified procedures make the Cyprus company a very attractive base to operate. Cyprus is a home for some international colossal companies as well as for new startup due to the incentives announced in 2017.
In addition some other parameters are working for the benefit of enterprises. The infrastructure, the solid and safe banking system, the low company registration fees, the free movement of capital, the based on Anglo-Saxon principles legislation, the high educated personnel and many more.
The most important aspects though for business owners are the attractive tax regime and incentives as well as the income tax exemptions.
What are the tax advantages of a Cyprus company?
- Low corporate tax rate 12,5% on profit
- 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 is attributable to the real estate holding)
- No succession taxes
- Attractive IP regime
- Tonnage tax for shipping companies
- Notional interest deduction for investments into Cyprus companies
- Personal tax exemptions for new residents and non-domiciled individual
- More than 60 double tax treaties
Other advantages of a Cyprus.
- Low formation fees
- Secure bank system
- Free move of capital
- Use of English and Greek language
- Full member of European Union
- Member of United Nations
- Legal framework attuned to the European Acquis Communautaire
- Attuned legal legislation in accordance with OECD regulations
- Stable legal and tax environment (based on the Anglo-Saxon law)
- Double tax treaties with more than 55 countries
- Modern infrastructure
- Stable and modern public administration
- Friendly and stable business environment for investors
- High level of education and professional expertise