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Cyprus advantages for new businesses and startups. How the country has managed to attract foreign tech giants?

In the last few years many additional incentives are given to startups and professionals who choose to relocate and operate from Cyprus. Member of the EU since 2004 Cyprus is a perfect hub for businesses having a very efficient and established regulatory structure that offers fast and easy business establishment, IP protection (along with International agreements), investment opportunities, schemes to promote entrepreneurship and many more.

Start with a low cost.

Launching a business in Cyprus does not require big amount neither huge maintenance fees, allowing entrepreneurs to invest in growth and development.

Low labor, affordable premises and professional support.

The cost for technical and professional talents is lower in Cyprus than in other major European country. Average hourly rate is approximately €15.80 which is significantly lower than the rest of the Europe ( UK = €26.70, Netherlands = €33.30 ). Non-wage cost of the employer to government, social contributions etc. is at 17% of the total cost of employment, compared to the average 26% of the European Union.

Office rental rates are very affordable although at the last few years due to high demand the prices went significantly up. A recent report places Cyprus as the second cheapest location in Europe for office rental space. Nicosia and Limassol have a range of offices and co-working spaces in a budget, some of which are designated for startups. Incubators also exist for that matter.

Last but not least we need to mention the affordable business support services such as accounting, legal advice, Information Technology, Marketing and advertising services.

 

Low tax.

The attractive tax regime has been the key feature of Cyprus as a business center. The country offers some of the lowest tax burdens in Europe and some highly competitive tax incentives for businesses and individuals.

Corporate tax rate is 12.5% – One of the lowest in the EU.

In addition, tech companies owning Intellectual Property are eligible to apply for an 80% tax exemption. Corporate tax in Cyprus also offers many other deductions and exemptions. Learn more about Corporate Tax here. You can also download the Corporate Tax Guide here.

 

Personal Tax.

Some of the privileges of the personal tax are:

  • No income tax is required on the first €19,500 of personal income.
  • Non-domiciled tax residents don’t need to pay tax on dividends, interest or rental income earned abroad.
  • Investments in innovative small businesses can be deducted from taxable income, up to an annual limit of €150,000.
  • Dividend payments are exempt from taxation, enabling most tech entrepreneurs to minimize their overall tax burden.

Learn more about Personal Tax in Cyprus here.

 

Double tax avoidance.

Cyprus has 62 tax treaty agreements with other countries, to help ensure that individuals and companies avoid double taxation and can structure efficiently.

 

 

Funding Programs in Cyprus.

Different funding programs exist in Cyprus for newly formed tech companies, but also others may be eligible to apply. Incentives and employment programs provide funding for businesses.

Check out the Government Funding Portal.

Innovative small businesses can apply to the European research and development program Horizon 2020 and benefit for grands up to 2.5 million. Check out here the EU Horizon 2020 program.

 

Cyprus Entrepreneurship Fund.

The Cyprus entrepreneurship fund is established by the Republic of Cyprus to support and strengthen entrepreneurship in the country by enhancing access to finance to small and medium-sized enterprises (SMEs). Cyprus Entrepreneurship Fund provides access to finance for SMEs through the provision of Financial Risk-Sharing Products and more specifically, through the provision of loans with favourable financing terms.

Check out the official fund website here.

 

Talent and Labor in Cyprus.

Cyprus has one of the youngest workforce in the EU and almost half of it (46%) has a tertiary degree. The level of education is growing since 2000 and local Universities of high standard education attracting thousands of students from abroad. Many locals also choose to strengthen their knowledge by studying abroad. Other great advantage regarding the workforce is that Cyprus as a part of the EU offers the opportunity to look for talent all around Europe. A workforce of 240 million people is available. Last but not least Cyprus offer the Startup Visa program which allows entrepreneurs from countries outside the EU to come in Cyprus and establish their startup. Work visas are also available to non-Europeans so companies are enabled to hire from outside the EU. Note that high paid employees can benefit from the attractive personal tax in Cyprus and the 60 days tax residency program. Here is a full guide for the Cyprus Startup Visa Scheme. Also have a look to the Cyprus Tax Resident in 60 days.

 

More about the country.

Cyprus at the moment has a developing economy with many growth sectors and opportunities are available for various industries. Learn more about Cyprus profile and the growth sectors here.

 

Our firm KTC Business consultants, is equipped with the expertise and tools to offer an all-round support to businesses and entrepreneurs who wish to develop and operate in Cyprus. Our experts will design the company structure and take care of the registration as well as all the matters related to accounting, compliance and tax. You will have a full support at your early stages and assistance ensuring all the operations will work smoothly. Having access to expert advice and tools will help your company avoid costly breaches and waste of time, allowing you to focus on the operations of your company.