why Cyprus

Cyprus provides an attractive destination for investor immigration. The strategic location of the island has played an important role in establishing Cyprus as a business hub since antiquity and as a very popular tourist destination. Cyprus has been a member state of the EU since 2004 and a member of the Eurozone since 2008. The combination of high quality of life, highly educated professional workforce, business infrastructure and availability of investment opportunities continue to make it the ideal business hub in the region.

The island’s legal and tax regime, location and infrastructure make it an ideal investment gateway to the European Union, as well as a portal for investment outside the EU, into the Middle East, Asia and Africa.

legal system

The legal system of Cyprus is modelled on the English Common Law principles and it is widely acknowledged as a business-friendly and efficient system that ensures transparency and reliability in business practices.  Offering foreign organizations, a familiar and steady framework within which to operate, Cyprus’ legal system is also fully compliant with the EU legislation, the Financial Action Task Force on Money Laundering (FATF), OECD, FATCA, the Financial Stability Forum laws and regulations and EU AML directives.

corporate tax

Cyprus offers an attractive, modern and transparent tax system, fully aligned with the EU, the OECD and international laws and regulations while providing access and benefits to an extensive and growing network of more than 60 Double Tax Treaties. Cyprus’ corporate tax rate of 12.5% is one of the lowest in the EU with some of the main features included below:

  • Tax exemption on foreign-sourced dividends.
  • Exemption on disposal of securities and other qualifying titles (e.g., shares, bonds, debentures)
  • No withholding taxes on payments made abroad.
  • No succession taxes
  • 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)
  • Attractive IP regime which can be utilized to achieve an effective tax rate as low as 2.5%.
  • Tonnage tax for shipping companies

personal tax

Personal income tax rates are progressive and reach a top marginal tax rate of 35% on taxable income exceeding income of €60,000. Income of up to €19,500 is not subject to tax.

Significant exemptions are also in place for non-domiciled individuals and non-resident persons who take up residence in Cyprus:

  • No tax on dividends and interest for non-domiciled individuals
  • 50% exemption on income from employment in Cyprus of a person who was not previously resident in Cyprus. The exemption applies for period of ten years, provided that the income from employment in Cyprus exceeds €100,000 per annum.

Setting up in Cyprus

Registering a Company with the relevant authorities in Cyprus is straightforward and can be completed within 3-5 days, while the timeframe for ready-made shelf companies is even lower.

Financial reporting and filings

  • Financial reporting

The Company must prepare a full set of Financial Statements that gives a true and fair view in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and the requirements of the Cyprus Companies Law, Cap. 113.  IFRS constitute the local Generally Accepted Accounting Principles (“GAAP”) in Cyprus and form the basis for the computation of taxable income.

Under the Cyprus Companies Law, all companies must have their Financial Statements audited and signed by a Cyprus registered auditor.

  • Tax filings

Every Cyprus tax resident company must annually file a Tax Return (TD4) 15 months following the end of its financial year. The Tax Department accepts tax returns which are electronically submitted by the company’s auditors or tax advisors.

  • Annual return

All Cyprus registered companies are required to file an annual return accompanied with their annual financial statements (together with the auditor’s report) to the Registrar of Companies.