Advantages of CyprusCyprus 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 / attractive location for the establishment of an IP holding and development company
- 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.