Cyprus is a low tax jurisdiction, as opposed to an offshore one. As a result there are certain compliance requirements, such as the compulsory submission of audited annual financial statements and taxation, even though the tax regime is extremely favourable. On the other hand, being a white list jurisdiction with over 40 double tax treaties and excellent infrastructure, it offers a reputable and prestigious tax efficient base for your international business.
Cyprus at a Glance
- The third largest island in the Mediterranean
- An EU member state
- Political system: Presidential Republic
- Capital city: Nicosia
- Total area: 9,250 km²
- Population: 0.8 million
- Climate: Mediterranean, with mild, wet winters and hot, dry summers
- Currency: Euro
- Economic Sectors: Tourism, financial services, real estate, shipping, industry
- Official language: Greek. English is also widely spoken
- Over 9,000 years of history
Jurisdiction Advantages
Cyprus is one of the most favoured jurisdictions for corporate structuring, offering a well structured regulatory system, wide range of financial services and professionals to establish and operate corporate solutions.
Cyprus tax resident corporate strucutres enjoy the following tax advantages(*):
• One of the lowest tax regimes in Europe
• 12.5% corporation tax on net profits
• Dividend income received from abroad is tax exempt
• Profits earned from a permanent establishment abroad are tax exempt
• Profit from the disposal of shares and other securities is tax exempt
• Interest received not arising from ordinary activities is exempt from corporation tax
• Zero tax withheld on payment of dividends, interest and royalties to non-resident individuals or companies
• Tax losses can be carried forward for up to five years to be offset against future profits
• Losses from a company can be offset against profits of other companies in the same group during the same financial year
• Group reorganisations are possible without any tax implications.
• Over 40 double tax treaties
• Possibility to obtain a European VAT number for intra-European trading
Please note that non Cyprus tax resident companies are only subject to corporation tax on income derived from a permanent establishment or immovable property in Cyprus. However, they cannot profit from most of the above advantages.
Cyprus also offers a number of non tax related advantages such as:
• A prestigious low tax jurisdiction
• Excellent infrastructure, banking and legal systems
• Confidentiality and anonymity of beneficial owners
• Easy migration of legal entities into and out of Cyprus from and to other jurisdictions
• Work permits granted for staff of Cyprus companies with foreign shareholders
• Access to EU directives
• The possibility to combine a Cyprus company with companies based in other jurisdictions to optimise tax planning*
(*) Certain conditions might apply