Advantages of Cyprus

Cyprus has been and continues to be an attractive place for setting up an international business. Numerous factors and incentives have contributed to the development of Cyprus as a key and successful international business centre.

KPSA undertakes the responsibility of setting up various types of an International Business Company as well as International Trusts.

Using a Cyprus entity in International Tax Planning offers the following advantages:

  • Reduction of the tax burden when and where the income is generated therefore increasing the return on investment of an operation
  • Mitigation of the withholding tax on expatriation of funds
  • Offers the ability to use the wide network of Treaties for the avoidance of double taxation
  • Provides the confidentiality of the company's shareholders
  • There are no exchange control restrictions on international business activities
  • Security of property rights
  • The availability of sophisticated banking facilities and many more.

The incentives given by the Cypriot legislation to the International Business Entities and to the foreign employees include:

  • An established wide network of Double Tax Treaties
  • The lowest corporate tax rate in Europe at the rate of 12.5%
  • Non-resident company's profits are tax exempt
  • Profits from sale of securities are tax exempt
  • No withholding tax is imposed on the payment of dividends, interest or royalties made from Cyprus to any country in the world
  • Tax exempt dividend and interest income subject to certain criteria
  • Dividend income received by the non - resident shareholders of the International Business Company (IBC) is not subject to any income tax in Cyprus
  • IBCs are outside the scope of VAT whilst they are given the opportunity to reclaim their VAT suffered on expenses
  • Cyprus tax is imposed on residents of Cyprus on their worldwide income
  • Completely tax free interest from bank deposits held by non-residents in Cyprus and many more.

The non-tax advantages enjoyed from setting an IBC in Cyprus include:

  • Excellent geographical position for clients operating within Europe and the Middle East
  • The Republic of Cyprus is a member of the European Union (EU) from 1st May 2004
  • Excellent climatic and living conditions
  • Low set up and maintenance costs of IBCs
  • The plentiful supply of highly qualified and skilled human capital
  • The availability of sophisticated banking, accounting and legal facilities
  • Confidentiality of the ownership of Cyprus companies can be maintained
  • Foreign employees and their family members can easily obtain work and residence permits
  • The IBCs and their expatriate employees are given the opportunity to buy immovable property in Cyprus
  • No import duty is imposed on cars and certain equipment purchased for use by the IBC and its foreign employees and many more.